Amazon launch to challenge Boots

Amazon is bolstering its attack on the high street retail market by recruiting Homebase marketing director Ajay Kavan to head up a major push for its home delivery operation.
The company, which launched its UK grocery delivery service in the July 2010, has now set its sights on the healthcare market, expanding its service to challenge Boots.
The move is backed by recent research from Hitwise, which shows Middle Britain is turning to the Internet for healthcare shopping.
The firm found that of the 13.1m people that are defined as Middle Britain in the UK, nearly one in three searched for health and beauty products in Dec ember 2010. Robin Goad, the research director at Hitwise UK, said: “Middle Britain likes to look after itself, with a high proportion of visits to health and medical sites including pharmacies and wellbeing sites.”
Kavan was with Homebase for eight years, joining from rival home-interest retailer B&Q in 2003. During that time he moved the ad account out of AMV, which had held it for 12 years, and scrapped the Spend & Save loyalty scheme to join Nectar. While at B&Q, Kavan was director of direct channels from January 2000, building its online operation from scratch.
There are more than 22,000 products available to buy in Amazon’s grocery section, slightly more than online supermarket Ocado, which sells Waitrose and John Lewis-branded products.
At the time of its launch, director of grocery James Leeson said: “Amazon.co.uk’s aim is to be the place where customers can find and discover any product they want to buy online.”
However, retail industry experts Verdict claimed Amazon’s entry into this new arena was “highly unlikely” to significantly shake up the market. Verdict analyst Joe Robinson commented: “The long term potential of Amazon’s food and grocery offer is likely to be in developing a reputation for bulk and niche purchases and offering a platform for smaller food and grocery suppliers rather than cultivating a significant share of the UK food and grocery market.”
Some commentators point to Amazon’s range of electronics and household goods as an area that is much more likely to have Tesco looking over its shoulder. Non-foods has been a major growth area for the retail giant, but with far lower overheads, Amazon is able to significantly undercut rivals.

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