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Tuesday, September 22, 1998 Published at 10:35 GMT 11:35 UK


Business: Your Money

Online store wars

Are supermarket queues a thing of the past?

UK supermarket store wars have escalated in recent years.

Ferocious price promotions, loyalty cards and a new breed of superstores, offering anything from laundry services to bank machines, have been introduced.

Now the battle ground is changing.

Shopping via the Internet is becoming big business.

More and more customers are ordering goods from the comfort of their own home and getting them delivered to their front doors.

Retail analysts expect electronic shopping to demonstrate explosive growth over the next few years.

And competition for those customers is hotting up.

The UK's two biggest supermarkets, Tesco and Sainsbury's, have already set up their own Internet shopping service and others look set to follow.

So will the Internet really change the way we shop for ever?

BBC News Online decided to go Internet shopping with Tesco and Sainsbury's to see what they had to offer.

Tesco

Tesco has an Internet superstore set up on its web site.


[ image: Tesco]
Tesco
Shopping is straight forward, with goods divided into different product categories so the health conscious can home in on the fruit and vegetables, while those with a sweet tooth can head straight for the chocolate biscuits.

There is also a search facility to find specific items, which on the whole works fairly well, although not perfectly.

You then simply click on the items you want to purchase, which get added to your shopping list.

Each item has a detailed description, although there are no pictures of products. Neither are there details of ingredients or the number of calories products have.

The bill is calculated at the check-out and a £5 delivery charge added.

Customers can choose for the goods to be delivered during a two hour time slot.

Although next day time slots are not normally available, other delivery times, including weekends, did not pose a problem.

Payment can be made with a Visa, Switch or Store card.

Quality of service

Good points

  • Everytime we tried the service, the food was delivered within the allotted time slot.

  • Products are put through the till before being delivered, so any discounts available in the stores are also available for Internet customers.

  • Any unavailable goods were substituted with comparable goods.

  • Frozen goods were kept in freezer compartments and had not defrosted.

Bad points

  • The Internet site did not appear to have up-to-date information on offers available in the store, so customers could miss out on bargains.

  • Several items were completely unavailable, which can be frustrating.

  • At first the whole process is time consuming, taking about an hour to do an average shop. However choices are kept in a personal list, which makes the second shop much faster.

  • At the moment the service is limited to London, so many people around the country are missing out.

  • There were a few technical difficulties with the site, with certain product categories inaccessible, although this happened infrequently.

Conclusion

On the whole the site could be improved to include more product details and offers.

However the range of goods on offer was good and shopping was far easier than struggling to get to the nearest store.

Sainsbury's

Sainsbury's has taken a different approach.


[ image:  ]
Details of its service are found on its web site at Sainsbury's Orderline.

However customers have to visit a local store to create a catalogue of goods they may want to buy in the future.

This involves walking around the store and scanning goods.

Customers can then choose goods from the catalogue on the Internet. Once again a £5 charge delivery charge is added to the bill.

Good points

  • Customers are able to see at first hand the goods that are available.

Bad points

  • The process of scanning the goods is very time consuming, taking at least two hours.

  • Only one two hour slot is available per day to a particular area, and on some days no delivery time is available.

  • The goods were delivered late, with some products missing and some of the substitutions made unsuitable.

  • Only selected stores offer the Internet service.

Conclusion

From our experience Sainsbury's Internet service is suffering from some teething problems.

The future

Verdict, the retail consultancy, casts doubts on whether the Internet can transform our shopping patterns, pointing out that customers are still sceptical about not being able to see goods before they splash out more on them.

And from our survey of supermarket Internet sites, it seems that there is still plenty of room for improvement.

However Verdict acknowledges that Internet shopping is set to grow rapidly.


[ image: Supermarket sweep: home shopping is catching on]
Supermarket sweep: home shopping is catching on
And despite some initial drawbacks Sainsbury's and Tesco are still leading the way, with both claiming their services are proving very popular.

As the technology improves, so will the performance of supermarket Internet shopping sites.

And other chains are now waking up to the potential market available.

Asda plans to start selling some goods such as electrical appliances,CD's, and books, via the Internet by early next year. If successful it could extend its offer to food.

Waitrose is exploiting the Internet in a different way, offering companies software which will enable employees to order shopping at their desks and pick it up after work.

One thing seems certain, the Internet presents a huge opportunity and a huge challenge for supermarkets.

It is set to become a vital weapon in the fight for customers.



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