Seasonal spree for online shoppers

29 Jan 2004

It is certainly amazing to look back and see for how long was practically the only successful example of an online business trotted out by the pundits. Not that it was actually making money, of course, but the model was working and the concept proven. Here in Ireland we all gleefully pointed to our home-grown — and profitable — Kennys Bookshop of Galway, which had its catalogue online before Amazon and customers submitted credit card numbers by email.

What the web hypesters were not grasping was that books were a special case, with a long tradition of mail order and book clubs in many markets. It soon became obvious that business-to-business (B2B) transactions were actually leading the way in e-commerce, with technically savvy partners and win/win cost and efficiency gains.

For business-to-consumer (B2C) transactions, the combination of traditional retailing and established brands (both products and retailers) was where e-tailing was going. When you order a book, you know what you want and what you are buying. Flowers were another similar case in point, since the Interflora system had long since proven its reliability around the world. In travel and more recently in theatre and event ticket booking, the real service is the booking, not the actual flight, hotel or show.

So the step from telephone and helpful agent to web self-help was an easy one. To this day, these are still the most successful internet B2C e-commerce categories, with CDs and DVDs as obvious companion products to books, and the only products actually deliverable online so far are software, games and gambling.

For the supermarket sector, the web has begun to come into its own as a complementary channel. It is all so very simple you could be forgiven for wondering what all the debate was about. You look up what you want, order over the web and your trolley load is delivered to your hall door. You can order from wherever you are — the office is probably the commonest, but the well-equipped can do it from foreign airports as their flights are called. The online complications are minimal: a few minutes to register and confirm that delivery is on offer in your area, then you are up and running.

“We now have just under 100,000 registered customers,” says Pauline Crowley, head of strategic marketing in Tesco Ireland. “That is still just about 20pc of our Clubcard customers so we have lots of potential but takeup of the service has been growing steadily and especially in the past year. We had a surge coming towards Christmas.”

As with any such service, the constraints are physical rather than ICT-related. Fulfilment is based on the local Tesco store rather than central depots. Starting with just two Dublin stores in October 2000 the group now offers the web shopping service from 17 stores. “We have people online ordering at four and five in the morning — in fact it’s fair to say there are some orders every hour pretty much 24/7. But there is a definite peak before 10am, suggesting that a large number of people do their shopping from work for delivery that evening,” says Crowley.

Tesco offers two-hour delivery slots from 10am to 10pm, with the evening timing the most popular, with a €7.62 charge per delivery. Deliveries can be booked up to three weeks in advance and each local store’s bookings are reflected online as the slots fill up. “The experience is personalised for the shopper because your favourite items, as shown by both in-store and online purchasing, will automatically be recorded and presented for repeat orders. All you have to do is just choose the items and quantities,” she explains. The Irish site is independent of the Tesco UK operation but technically identical, so continuous development of the platform and back-office infrastructure is reflected in the service to the Irish market.

Superquinn, the only indigenous supermarket group with online shopping, took a slightly different market approach. “We cover an extended Greater Dublin region — from Swords to Greystones — and inland to Naas and Maynooth, serving from six stores,” explains Geraldine Penney, business manager of Current deliveries are running at about 2,500 weekly to a base of almost 47,000 registered customers. The home delivery service will shortly be complemented by a ‘click and collect’ service. “The service is based on the highest density areas but we plan to extend it geographically and also to the complete range of store items — even difficult ones like fish and delicatessen,” Penney adds.

Superquinn’s technology and fulfilment logistics partner is, a separate company that grew out of the Superquinn SuperClub initiative but has grown its client list to include the likes of Arnotts and Atlantic Homecare, Discount Electrical, World of Wonder toys and others. “For the last three years or so our traffic has doubled for the month of December,” says Caitriona O’Leary, marketing and operations manager. “This year we passed the half million orders mark for the first time, reflecting the 2003 average of 250,000 or so for the other months.”

The patterns also show how savvy Irish consumers have become in using B2C services, with the busiest period for non-food items running from mid-November to about mid-December, in good time for pre-Christmas delivery. The Superquinn and Tesco grocery traffic peaked at the weekend before Christmas with the delivery slots booked from early November onwards.

TicketMaster reports a similar pattern, with sales showing a peak in early December for the Christmas gift market. “Our online sales passed out bookings by phone or through the shop outlets about two years ago,” says John Maguire. “But the business patterns are entirely event-driven. Our fastest ever sell-out was just 58 seconds online! That was for Bob Dylan in Vicar Street, so the small venue was obviously the major factor, but The Rolling Stones at The Point sold out online in six minutes.” The superiority of the web channel for enthusiastic fans is now totally established, with the box office open on the second and thousands of fingers poised to click mouse buttons and snap up tickets in seconds.

So in Irish e-tailing as in traditional retailing, there is clearly one lesson to rule them all: the consumers always know what suits them best.

By Leslie Faughnan