Tesco has hired one of Facebook’s most senior European executives and is launching a slew of online entertainment stores as it gears up for battle with Amazon.
Tesco bought an 80pc stake in the Blinkbox film and TV site in 2011, in what was widely interpreted as a defensive move against the likes of Amazon and Apple, whose own movie services were rapidly eating into Tesco’s share of the entertainment market.
The three Blinkbox retail sites will sit separately from Tescos’ main online store and will only carry subtle Tesco branding. However, the supermarket will advertise the sites heavily in store and use them to ensure that customers in search of specialist online sites for books, music, films and TV box sets continue buying from the Tesco empire instead of falling into the habit of shopping for entertainment products elsewhere.
In doing so, Tesco hopes to stop the steady march of customers going to Amazon for just one sort of item only to turn to the mammoth online retailer for a large range of household goods.
That drift has already become ingrained in shopping habits in the US, where many customers regularly buy ordinary items such as nappies or cleaning products from Amazon, as well as luxury items like books and electrical goods. Although Amazon far outranks Tesco in online sales, the supermarket’s chief executive Phil Clarke has said he wants Tesco to become the world’s biggest “multi-channel retailer” – the name given to stores that combine online retail websites with bricks-and-mortar shops.
Michael Comish, chef executive and founder of Blinkbox, said: “Tesco is already the third largest retailer in the world, and we will have launched three new digital entertainment businesses by the end of the year, headed by some of Britain’s brightest digital minds. This is the beginning of a big journey.”
News of Tesco’s online expansion plans come as the supermarket prepares to launch a Clubcard TV channel, underpinned by Blinkbox’s technology.