Tesco gears up for an all-out assault on Amazon

By Sooraj Shah
04 Mar 2013 View Comments

Tesco is to step up its assault in the e-commerce space with the launch of two specialist websites for e-books and music later this year.

The firm has hired Facebook's head of retail for EMEA, Gavin Sathianathan, to lead Blinkboxbooks, while Mark Bennett, a former EMI and Warner Music executive who currently heads Sainsbury's digital entertainment unit, will run Blinkboxmusic, the Telegraph reports.

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The two sites will sit alongside the Blinkbox online movie store, which unlike its competitors Netflix and Amazon's LoveFilm, is not a subscription service meaning consumers can rent or buy films and TV shows on demand. Its model allows it to offer more recent hits ahead of its rivals and even ahead of the likes of Sky Movies.

Although Tesco is set to keep Blinkbox as a separate entity from the Tesco brand online, it will advertise the new sites heavily to ensure that its customer base is aware of the option to buy books, music, films and TV shows online. In turn it will hope to stop consumers from turning to Amazon's retail site to purchase one-off goods, and instead log on to find a range of items on Tesco's online site.

Tesco also plans to launch a Clubcard TV channel using Blinkbox's technology. Initially this will be on the internet and free of charge to Tesco's Clubcard loyalty card holders, and is to offer a range of archive films and TV shows - but this could be turned into a mainstream television channel.

Michael Comish, chief executive and founder of Blinkbox, told the Telegraph that the supermarket would use detailed information about viewers, collected through its Clubcard scheme to tailor adverts to individual households.

"They'll be the most targeted TV adverts in the world," said Comish.

The Blinkbox website states that users can collect Clubcard points for every £1 spent, and the combination of different services and users that Tesco will provide, will give the firm an enormous amount of data which it could use to better understand customers.

Last year, Tesco boss Philip Clarke admitted that the retailer uses Clubcard data to target consumers according to their wealth, with initial tests showing an increase in sales of 10 per cent.

In July, Computing looked into the possibility of companies such as Tesco overstepping the mark and exploiting their customers' trust by using their data for reasons other than those they disclose. We asked whether the likes of Tesco and Marks & Spencer could gather data from shopping choices to increase the price of services like life insurance, for example.

The Office of Fair Trading has since launched an investigation into the extent to which businesses are using customer data to target consumers with personalised prices.

"It is important we understand what control shoppers have over their profile and whether firms are using shoppers' profiles to charge different prices for goods or services. This call for information will help us understand these practices better and to decide whether or not this is an issue on which the OFT needs to take any action," said OFT chief executive Clive Maxwell.

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