Ikea said internet sales at its UK business jumped 60 per cent over Christmas as it invested in its multichannel offer.
The Swedish furniture retailer said that helped like-for-like sales in the period increase 12 per cent as customers sought to spruce up their houses and, in particular, living rooms, children's furniture and bathrooms.
Ikea's UK and Ireland country manager Gillian Drakeford said the sales rise followed a 9 per cent increase in sales over the Autumn period. She said the online growth was 'exceptionally strong' over Christmas.
'Ongoing investment across [our] online and in-store shopping experience also helped to boost sales as shoppers seek more convenience,' the company said.
It said the post-Christmas sale led to a spike in visitors, 11 per cent more than the same week a year earlier.
Ikea is benefiting as shoppers begin to redecorate their houses as they prepares to sell their homes as the UK housing market shows early signs of recovery.
Showing posts with label internet retailing. Show all posts
Showing posts with label internet retailing. Show all posts
Monday, 20 January 2014
Wednesday, 15 January 2014
Feelunique.com Drafts in Former Clarins Boss To Bolster Growth Plans
Beauty website Feelunique.com has appointed former Clarins president Joël Palix as its chief executive officer.
He takes the reins from co-founder Aaron Chatterley, who set up the business in 2005 with Richard Schiessl, and who will become deputy chairman.
Palix was president at the Clarins Fragrance Group for five years where he managed the €400 million turnover business and brands such as the Thierry Mugler, Azzaro, Porsche Design, Swarovski and Zadig & Voltaire fragrance brands.
He has also held key executive positions at Yves Saint Laurent Beauté where he was managing director for Europe, France and Spain at various times.
He described Feelunique.com, which has over 500 brands and 20,000 products on it site, as 'an exciting brand at a very exciting time'.
Chatterley will remain 'very much involved with the business,' the company said in the statement. He said: 'I am proud of what we have achieved so far and very much look forward to working closely with him and seeing Feelunique flourish through the next stage of growth.'
He takes the reins from co-founder Aaron Chatterley, who set up the business in 2005 with Richard Schiessl, and who will become deputy chairman.
Palix was president at the Clarins Fragrance Group for five years where he managed the €400 million turnover business and brands such as the Thierry Mugler, Azzaro, Porsche Design, Swarovski and Zadig & Voltaire fragrance brands.
He has also held key executive positions at Yves Saint Laurent Beauté where he was managing director for Europe, France and Spain at various times.
He described Feelunique.com, which has over 500 brands and 20,000 products on it site, as 'an exciting brand at a very exciting time'.
Chatterley will remain 'very much involved with the business,' the company said in the statement. He said: 'I am proud of what we have achieved so far and very much look forward to working closely with him and seeing Feelunique flourish through the next stage of growth.'
Missguided.co.uk Drafts In Nicole Scherzinger For Exclusive Range
Manchester-based fashion website Missguided.co.uk has drafted in X-Factor judge Nicole Scherzinger to launch a new fashion collection.
The 30-piece range will capture the 'playful, sexy spirit' of the Missguided girl and feature a mix of directional dresses, jumpsuits, skirts, bodysuits and tops.
'I'm so excited to be collaborating with Missguided. I've worn their clothes in the past as I'm a big fan. This is my first time designing my own collection and I can't imagine a more perfect fit than Missguided,' Scherzinger said.
Missguided's managing director Nitin Passi, who launched the site in 2009, said: 'Working with Nicole was a natural choice for us. She's personable, fun and loves to experiment with fashion - all qualities that truly represent out customer. She's a great ambassador for the brand and we're excited to see the response.'
The range launches in March.
For more on Missguided, see our Online Retail Stars of 2013 Report: Missguided.co.uk.
The 30-piece range will capture the 'playful, sexy spirit' of the Missguided girl and feature a mix of directional dresses, jumpsuits, skirts, bodysuits and tops.
'I'm so excited to be collaborating with Missguided. I've worn their clothes in the past as I'm a big fan. This is my first time designing my own collection and I can't imagine a more perfect fit than Missguided,' Scherzinger said.
Missguided's managing director Nitin Passi, who launched the site in 2009, said: 'Working with Nicole was a natural choice for us. She's personable, fun and loves to experiment with fashion - all qualities that truly represent out customer. She's a great ambassador for the brand and we're excited to see the response.'
The range launches in March.
For more on Missguided, see our Online Retail Stars of 2013 Report: Missguided.co.uk.
Tuesday, 14 January 2014
Shop Direct Reports Mobile Shopping Sales 'Explosion'
Online and catalogue giant Shop Direct said its sales rose over Christmas after an 'explosion' in mobile shopping.
The £1.6 billion turnover giant said turnover grew 5 per cent in the six weeks to December 27 compared to the same period last year. Sales in the 26 weeks to the end of 2013 increased 1 per cent suggesting a marked acceleration in sales over the final weeks.
Group CEO Alex Baldock described the retail market over Christmas as 'tough' and 'highly promotional'.
But he said: 'We're proud to report a record Christmas for Shop Direct. We've come through an exceptionally tough environment and come through it stronger.'
He added: 'This Christmas was another milestone on our journey to being a world class digital retailer, as our department store range, unique financial services offer and ever-growing ecommerce capabilities allowed us to make good things easily accessible to more people.'
Shop Direct, formerly catalogue group Littlewoods, is said its relatively new digital brands such as Very.co.uk and Isme.com 'out-paced the market' while it continued to re-engineer its 'heritage brands', including Littlewoods.com and KandCo.com, to profitability.
Very.co.uk and Isme.com delivered combined sales of 27 per cent in the six weeks while Littlewoods and KandCo.com grew by 5 per cent.
Online sales increased 14 per cent overall increasing digital revenue to 84 per cent of sales compared to 80 per cent in the same period last year. Mobile sales, which rose 64 per cent, now account for 43 per cent of online sales versus 28 per cent last year.
Baldock said: 'By 2015, we expect every transaction to involve a mobile device at some point in the customer journey. It’s hard to overstate how important this trend is, and we mean to stay on top of it.'
Traffic to its websites is already dominated by mobile devices as shoppers use their spare time to research shopping decisions. Traffric from mobiles increased to 52 per cent of all internet traffic from 37 per cent last year.
Total visits to websites increased 32 per cent to 56 million.
It said the week commencing Saturday 30th was the busiest week of the year and Cyber Monday, on December 2, was the busiest day.
The company sold 76,500 consoles including Xboxes and Playstation 4s, with over 120,000 tablets sold, up 31 per cent on last year. Childrenswear sales rose 20 per cent, in part because of the expansion of the branded product ranges and investment in Ladybird.
Beauty sales increased 18 per cent on the back of new brand introductions such as GHD, St Tropez, Illamasqua and Bourgois. It also said it sold a onesie every 35 seconds, 103,000 in total and that Adidas, Apple, Babyliss, Samsung, Superdry and UGG were among its best selling brands.
The £1.6 billion turnover giant said turnover grew 5 per cent in the six weeks to December 27 compared to the same period last year. Sales in the 26 weeks to the end of 2013 increased 1 per cent suggesting a marked acceleration in sales over the final weeks.
Group CEO Alex Baldock described the retail market over Christmas as 'tough' and 'highly promotional'.
But he said: 'We're proud to report a record Christmas for Shop Direct. We've come through an exceptionally tough environment and come through it stronger.'
He added: 'This Christmas was another milestone on our journey to being a world class digital retailer, as our department store range, unique financial services offer and ever-growing ecommerce capabilities allowed us to make good things easily accessible to more people.'
Shop Direct, formerly catalogue group Littlewoods, is said its relatively new digital brands such as Very.co.uk and Isme.com 'out-paced the market' while it continued to re-engineer its 'heritage brands', including Littlewoods.com and KandCo.com, to profitability.
Very.co.uk and Isme.com delivered combined sales of 27 per cent in the six weeks while Littlewoods and KandCo.com grew by 5 per cent.
Online sales increased 14 per cent overall increasing digital revenue to 84 per cent of sales compared to 80 per cent in the same period last year. Mobile sales, which rose 64 per cent, now account for 43 per cent of online sales versus 28 per cent last year.
Baldock said: 'By 2015, we expect every transaction to involve a mobile device at some point in the customer journey. It’s hard to overstate how important this trend is, and we mean to stay on top of it.'
Traffic to its websites is already dominated by mobile devices as shoppers use their spare time to research shopping decisions. Traffric from mobiles increased to 52 per cent of all internet traffic from 37 per cent last year.
Total visits to websites increased 32 per cent to 56 million.
It said the week commencing Saturday 30th was the busiest week of the year and Cyber Monday, on December 2, was the busiest day.
The company sold 76,500 consoles including Xboxes and Playstation 4s, with over 120,000 tablets sold, up 31 per cent on last year. Childrenswear sales rose 20 per cent, in part because of the expansion of the branded product ranges and investment in Ladybird.
Beauty sales increased 18 per cent on the back of new brand introductions such as GHD, St Tropez, Illamasqua and Bourgois. It also said it sold a onesie every 35 seconds, 103,000 in total and that Adidas, Apple, Babyliss, Samsung, Superdry and UGG were among its best selling brands.
Jaeger Says Relauched Website Stitched Up Christmas
Fashion retailer Jaeger said a relaunch of its website last year helped it grow online sales by 57 per cent in the festive quarter.
The retailer said the boost over the 13 weeks to December 28 lifted total sales by 20 per cent and like-for-like sales by 23 per cent. Stores alone rose 10 per cent on a like-for-like basis.
The retailer was acquired by Jon Moulton's Better Capital in April 2012. In the year to February, sales fell 17 per cent to £70.7 million and pretax losses fell from £35.5 million to £13.1 million.
Jaeger said in a statement: 'Strong online sales were underpinned by recent website enhancements and a continuing robust performance from retail stores.'
According to Econsultancy.com, last year's major overhaul of the site followed a revamp only the year before. However, it said analysis in June last year revealed that, while searches for 'Jaeger' had grown between 2007 and 2011, they had then plateaued.
Econsultancy said the new, improved site had provided a 'good foundation in place' although noted a number of areas where the site could have been improved. It said, for example, that a clearer promotion of the option to use Paypal could have a significant effect on sales.
That said, a it is unlikely the site alone would have had such a marked effect if the retailer had not improved its fashion offer. Jaeger said sales at its Regent Street store had increased 50 per cent after the store was refurbished.
Jaeger chief executive Colin Henry said: 'We are extremely pleased with this strong performance, particularly as trading across the sector during this period was very competitive.'
He added: 'It is still early days in our turnaround and there is much to do to capitalise on the significant opportunities that we have.'
The retailer said the boost over the 13 weeks to December 28 lifted total sales by 20 per cent and like-for-like sales by 23 per cent. Stores alone rose 10 per cent on a like-for-like basis.
The retailer was acquired by Jon Moulton's Better Capital in April 2012. In the year to February, sales fell 17 per cent to £70.7 million and pretax losses fell from £35.5 million to £13.1 million.
Jaeger said in a statement: 'Strong online sales were underpinned by recent website enhancements and a continuing robust performance from retail stores.'
According to Econsultancy.com, last year's major overhaul of the site followed a revamp only the year before. However, it said analysis in June last year revealed that, while searches for 'Jaeger' had grown between 2007 and 2011, they had then plateaued.
Econsultancy said the new, improved site had provided a 'good foundation in place' although noted a number of areas where the site could have been improved. It said, for example, that a clearer promotion of the option to use Paypal could have a significant effect on sales.
That said, a it is unlikely the site alone would have had such a marked effect if the retailer had not improved its fashion offer. Jaeger said sales at its Regent Street store had increased 50 per cent after the store was refurbished.
Jaeger chief executive Colin Henry said: 'We are extremely pleased with this strong performance, particularly as trading across the sector during this period was very competitive.'
He added: 'It is still early days in our turnaround and there is much to do to capitalise on the significant opportunities that we have.'
Amazon Gets Fashion Smart With US Clothing Sales Jump
US online giant Amazon has taken a bigger slice of the fashion market in the US with 10 per cent of the population saying they bought clothing via its site during December.
The number represented a 27 per cent increase on the same month last year, according to figures released by market analysts at Cowen & Co. The report said the clothing, in particular its fashion products, continues to grow 'dramatically'.
Just-Style.com quoted the report as saying: 'It is not a news flash that Amazon continues to gain market share from traditional retailers. Nonetheless, we think that investors may be underestimating the inroads that Amazon is making in apparel, including fashion apparel.'
Fashion sales grew at the faster rate of 37 per cent with 5 per cent of the US population admitting to purchasing more stylish goods.
The number represented a 27 per cent increase on the same month last year, according to figures released by market analysts at Cowen & Co. The report said the clothing, in particular its fashion products, continues to grow 'dramatically'.
Just-Style.com quoted the report as saying: 'It is not a news flash that Amazon continues to gain market share from traditional retailers. Nonetheless, we think that investors may be underestimating the inroads that Amazon is making in apparel, including fashion apparel.'
Fashion sales grew at the faster rate of 37 per cent with 5 per cent of the US population admitting to purchasing more stylish goods.
White Stuff's Says Web Surges To Almost a Quarter Of Sales
Clothing retailer White Stuff saw a huge increase in online sales over Christmas and said internet sales are now approaching a quarter of all sales.
The company said a 52.9 per cent increase in sales in the 10 weeks to January 4 helped total sales rise 13.9 per cent. Online sales increased to 21.9 per cent of all sales.
Like-for-like sales at the business increased 7.3 per cent. It said 10 per cent of online sales were from click and collect and 36 per cent of online orders from mobile devices.
White Stuff chief executive Jeremy Seigal said the company offered fewer discounts 'against a heavy backdrop' of promotions in the market in the few weeks up to Christmas. He said customers 'responded very positively to our distinctive product and Christmas marketing initiatives' both on and offline.
He added: 'We are very pleased with our performance over Christmas, especially given the competitive market place and heavy discounting in the weeks running up to Christmas. Our customers responded very positively to our distinctive product and Christmas marketing initiatives, which we ran across our 88 shops and online.'
The company said a 52.9 per cent increase in sales in the 10 weeks to January 4 helped total sales rise 13.9 per cent. Online sales increased to 21.9 per cent of all sales.
Like-for-like sales at the business increased 7.3 per cent. It said 10 per cent of online sales were from click and collect and 36 per cent of online orders from mobile devices.
White Stuff chief executive Jeremy Seigal said the company offered fewer discounts 'against a heavy backdrop' of promotions in the market in the few weeks up to Christmas. He said customers 'responded very positively to our distinctive product and Christmas marketing initiatives' both on and offline.
He added: 'We are very pleased with our performance over Christmas, especially given the competitive market place and heavy discounting in the weeks running up to Christmas. Our customers responded very positively to our distinctive product and Christmas marketing initiatives, which we ran across our 88 shops and online.'
Saturday, 11 January 2014
M&S 'In The Closing Stages' Of Switching On New Website
Marks & Spencer is poised to launch its new website following a difficult trading during which internet sales rocketed.
The clothing retailer's chief information officer Darrell Stein said systems managers are in the 'closing stages' of switching from using the Amazon platform.
'We are live with three out of the eight systems - the back-end systems - and we will put the front-end stuff on [beginning this month]. That's going to go live by Spring,' he told Cio.co.uk.
He said that Marks & Spencer was 'renting' the Amazon platform but it was increasingly critical to switch to its own systems.
The tie-up with Amazon was agreed in 2005 and launched in 2007. But Stein told said: 'The problem with using Amazon is that you have got a key growth area for your business being run by a competitor - they are now also selling general merchandise online.'
He explained that M&S was not able to change the systems as frequently as it wanted. 'They were trying to drive it down more of a package route and we want to be really flexible and change it every five minutes. It was completely divergent.'
He said internet sales have grown from £30 million to £700 million during its partnership with Amazon.
He also told Computer World that M&S is currently testing SAP HANA to help it monitor real time stock availability. He said monitoring stock so closely was not a necessity in the past.
He explained: 'Previously you could order overnight, it was in the store the next day - but the internet has blown all that away. You need to know what you have got right now so you can show your customers in real-time.'
He said it was a 'key infrastructure project' that is still in 'validation mode'.
The clothing retailer's chief information officer Darrell Stein said systems managers are in the 'closing stages' of switching from using the Amazon platform.
'We are live with three out of the eight systems - the back-end systems - and we will put the front-end stuff on [beginning this month]. That's going to go live by Spring,' he told Cio.co.uk.
He said that Marks & Spencer was 'renting' the Amazon platform but it was increasingly critical to switch to its own systems.
The tie-up with Amazon was agreed in 2005 and launched in 2007. But Stein told said: 'The problem with using Amazon is that you have got a key growth area for your business being run by a competitor - they are now also selling general merchandise online.'
He explained that M&S was not able to change the systems as frequently as it wanted. 'They were trying to drive it down more of a package route and we want to be really flexible and change it every five minutes. It was completely divergent.'
He said internet sales have grown from £30 million to £700 million during its partnership with Amazon.
He also told Computer World that M&S is currently testing SAP HANA to help it monitor real time stock availability. He said monitoring stock so closely was not a necessity in the past.
He explained: 'Previously you could order overnight, it was in the store the next day - but the internet has blown all that away. You need to know what you have got right now so you can show your customers in real-time.'
He said it was a 'key infrastructure project' that is still in 'validation mode'.
Friday, 3 January 2014
Next Directory Soars As Christmas Surpasses Expectations
Clothing retailer Next said this morning that its Directory business has seen another growth surge after demand over the Christmas period soared.
Sales at the online and catalogue business increased 21 per cent in the eight week period from November 1 to December 24. Sales at stores grew 7.7 per cent taking the total increase in revenue to 11.9 per cent.
Next said: 'Sales in the fourth quarter have been significantly ahead of our expectations. The step-up in Christmas trade was mainly down to improvements in our seasonal knitwear, nightwear and gift offer. In addition, increased confidence in online deliveries meant that more customers continued to trade with Next Directory right up to the weekend before Christmas.'
It said the success during the fourth quarter so far meant it had raised its guidance for full-year profit to around £692 million, an increase of about 11 per cent on last year.
Next also plans to pay a one-off 50 pence a share dividend with extra cash it has made this year.
'As far as the consumer environment is concerned, it seems likely that the economy will continue to steadily improve with strong employment numbers driving a general recovery,' the company said.
But it warned: 'However, the problem of little or no growth in real earnings looks set to persist for some time, and we cannot see any reason to expect a significant increase in total consumer spending in the year ahead. We are also wary that any return to significant economic growth is likely to result in rising interest rates which, in turn, is likely to moderate spending of those with mortgages.'
Sales at the online and catalogue business increased 21 per cent in the eight week period from November 1 to December 24. Sales at stores grew 7.7 per cent taking the total increase in revenue to 11.9 per cent.
Next said: 'Sales in the fourth quarter have been significantly ahead of our expectations. The step-up in Christmas trade was mainly down to improvements in our seasonal knitwear, nightwear and gift offer. In addition, increased confidence in online deliveries meant that more customers continued to trade with Next Directory right up to the weekend before Christmas.'
It said the success during the fourth quarter so far meant it had raised its guidance for full-year profit to around £692 million, an increase of about 11 per cent on last year.
Next also plans to pay a one-off 50 pence a share dividend with extra cash it has made this year.
'As far as the consumer environment is concerned, it seems likely that the economy will continue to steadily improve with strong employment numbers driving a general recovery,' the company said.
But it warned: 'However, the problem of little or no growth in real earnings looks set to persist for some time, and we cannot see any reason to expect a significant increase in total consumer spending in the year ahead. We are also wary that any return to significant economic growth is likely to result in rising interest rates which, in turn, is likely to moderate spending of those with mortgages.'
Thursday, 2 January 2014
Comment: What Tesco Can Learn From The Samwer Brothers
A few weeks ago Tesco, Britain's largest retailer by a long long way, made a surprising move.
Struggling to make ends meet at home in the face of a tidal wave of competition and retreating or retrenching in several of its overseas markets, the retailer agreed a deal that finally put it on the world ecommerce map.
While its home grown internet business Tesco Direct has failed to advance in the past five years, its new internet chief Robin Terrell went half a world away to take a stake in Rocket Internet's Lazada.
The business is small fry in Tesco terms. Last year it made $13.5 million revenue. By comparison, Tesco is the third biggest retailer in the world after France's Carrefour and Wal-Mart, the world's largest.
It was the first move by Tesco in a long time that didn't smack of deck-chair shuffling. It has spent the last two years trying to stem a slide in profits after seriously over-stretching itself globally and at home - a contraction that could be blamed both on the recession but just as much on management's blind self belief in its own right to succeed.
At the least, let's say, it took its eye off the ball. At the worst, it lost that sense of paranoia and had replaced it with a sense of arrogance.
It was paranoia that kept it on its toes and saw it beat Sainsbury's to within an inch of its life in the 1990s. By the last decade it had set about decimating the high street after stockpiling out of town hypermarkets and launching Tesco Direct that appeared back in 2006 about to seize the retail sector in a pincer movement.
If the phrase 'disruption' had been in common usage back then, Tesco's then chief executive Sir Terry Leahy would have loved it.
With everything from banking, pawnbroking and used cars on the menu the Tesco juggernaut appeared to be at full speed. But, in fact, it was overheating. looking back it almost seemed as if it was investing lots of money in projects that it appeared only half concerned would succeed.
One area that it did seem to be winning was the online food delivery business. It remains the UK's biggest with a 48.5 per cent market share. Even bigger than its 30-or-so per cent of the off-line food market where it is currently facing extreme competition from Germany's Aldi and Lidl, and the UK's home grown Waitrose supermarket.
We'll leave aside, for the moment, our concerns over the profitability of the internet-age food delivery model (pre-minimum wage 'Hovis' delivery boys on bicycles are cheap; but in store 'pickers' doing customers shopping for them and Sprinter vans full of petrol are a little more costly).
But its Tesco Direct non-food business - designed to wipe home goods giant Argos from existence - has become an unprofitable problem. Taking out Argos was a good idea for a business that had become obsessed with finding ways to grow market share.
The problem was Tesco simply wasn't thinking big enough. Tesco should have been far more concerned about Amazon rather than the slow-moving target of Argos.
So, while even the most commercially challenged of people were beginning to understand that the new frontier of retail was online, Tesco's own online business was still focused on destroying the high street.
The juggernaut was beginning to look more like a dinosaur and one that is only now trying to haul itself into the 21st century.
By comparison Rocket Internet has many of the qualities Tesco used to have. It is an expert imitator and has a knack of finding the right staff and the right partners. Moreover, its understands the new world of retailing and commerce like Tesco understood retailing back in the 1990s.
Disruption is the name of the game and it all began in Silicon Valley 15 years ago. During two visits to California back in 1998 first Oliver Samwer and then with his two brothers Alexander and Marc.
The brothers began absorbing the culture like a trio of sponges. First Oliver secured face time with CEOs as he completed his MBA dissertation. Then the brothers got jobs at companies they saw as pace-steers - offering to work for nothing.
Their first success was setting up eBay imitator Alando in January 1999 which was bought by eBay as it entered the German market five months later. The brothers have repeated the trick many times - adapting big ideas to local cultures.
They've been accused of being a 'clone factory' for other people's business strategies. But there's nothing the brothers have done that they wouldn't be the first to admit themselves - and probably a lot more. They have developed a reputation for parking tanks on lawns - and forcing firms to buy-out their local businesses just to get them out of the way.
But Rocket Internet has fast become an industry leader and those that dismiss them as merely printing carbon copies of ideas dreamt up by their betters risk deluding themselves.
The recent slump at design etailer Fab.com is widely attributed to the energy, perhaps even hubris, it expended taking out Rocket Internet's Bamerang.
Fast is the name of the game at Rocket Internet - and the brothers would stake their reputation on it. Tesco's dithering over the fate of its US chain Fresh & Easy (perhaps in part over some misplaced loyalty to former management, some might argue) would not have been something the more ruthless Samwer brothers would have indulged themselves over.
The morality of Oliver's decisiveness has been questioned - such as when he fired 400 staff from his Turkish operation - but the financial benefits haven't.
You could argue that Tesco is too far down the road as a corporation to adapt to new social and business norms that the Samwers take for granted. It is, after all, a grocer at heart and hypermarkets could not be further from the fleet of foot attitude of the internet if they tried.
How many people in Silicon Valley do we think sit around worrying what Tesco is up to next?
So, could Zalando help change their minds?
There is no doubt Tesco is now finally rubbing shoulders with the big boys, in global internet terms anyway. (Or should that be the bad boys?) Lazada is just one of 75 businesses backed by Rocket worldwide with a combined turnover of $3 billion.
Those include fashion etailers in South America (Dafiti), Russia and the CIS (Lamoda), Southeast Asia (Zalora), Europe (Zalando) and other businesses from food delivery to a peer-to-peer landing platform.
Lazada was founded in 2012 to replicate what Rocket is aiming to achieve in fashion elsewhere with general merchandise across Malaysia, Thailand, Indonesia, Vietnam and the Philippines. Despite the fact that Tesco already has online non-food operations in Malaysia and Thailand, Zalando already holds the number one spot in each of the five markets.
It's often said that there is no point being number three in international markets - you need to be number one or a fierce number two. Samwer doesn't even think that is a good enough benchmark.
Lazada means business. It has raised serious money in what Tesco might once have considered to be a small market where non-food online sales would be a nice add on to the main food business. It raised $100 million back in June and another $250 million last month.
Tesco has invested 'tens of millions' of pounds in the latest round alongside Kinnevik, serial ecommerce investor and Rocket Internet shareholder, and Verlinvest.
There's no question Tesco's executives lucky enough to be involved will learn a lot. The question is how much can they take from Oliver Samwer and his brothers business tactics and feed them back into an organisation which is creaking under the weight of its own legacy.
Struggling to make ends meet at home in the face of a tidal wave of competition and retreating or retrenching in several of its overseas markets, the retailer agreed a deal that finally put it on the world ecommerce map.
While its home grown internet business Tesco Direct has failed to advance in the past five years, its new internet chief Robin Terrell went half a world away to take a stake in Rocket Internet's Lazada.
The business is small fry in Tesco terms. Last year it made $13.5 million revenue. By comparison, Tesco is the third biggest retailer in the world after France's Carrefour and Wal-Mart, the world's largest.
It was the first move by Tesco in a long time that didn't smack of deck-chair shuffling. It has spent the last two years trying to stem a slide in profits after seriously over-stretching itself globally and at home - a contraction that could be blamed both on the recession but just as much on management's blind self belief in its own right to succeed.
At the least, let's say, it took its eye off the ball. At the worst, it lost that sense of paranoia and had replaced it with a sense of arrogance.
It was paranoia that kept it on its toes and saw it beat Sainsbury's to within an inch of its life in the 1990s. By the last decade it had set about decimating the high street after stockpiling out of town hypermarkets and launching Tesco Direct that appeared back in 2006 about to seize the retail sector in a pincer movement.
If the phrase 'disruption' had been in common usage back then, Tesco's then chief executive Sir Terry Leahy would have loved it.
With everything from banking, pawnbroking and used cars on the menu the Tesco juggernaut appeared to be at full speed. But, in fact, it was overheating. looking back it almost seemed as if it was investing lots of money in projects that it appeared only half concerned would succeed.
One area that it did seem to be winning was the online food delivery business. It remains the UK's biggest with a 48.5 per cent market share. Even bigger than its 30-or-so per cent of the off-line food market where it is currently facing extreme competition from Germany's Aldi and Lidl, and the UK's home grown Waitrose supermarket.
We'll leave aside, for the moment, our concerns over the profitability of the internet-age food delivery model (pre-minimum wage 'Hovis' delivery boys on bicycles are cheap; but in store 'pickers' doing customers shopping for them and Sprinter vans full of petrol are a little more costly).
But its Tesco Direct non-food business - designed to wipe home goods giant Argos from existence - has become an unprofitable problem. Taking out Argos was a good idea for a business that had become obsessed with finding ways to grow market share.
The problem was Tesco simply wasn't thinking big enough. Tesco should have been far more concerned about Amazon rather than the slow-moving target of Argos.
So, while even the most commercially challenged of people were beginning to understand that the new frontier of retail was online, Tesco's own online business was still focused on destroying the high street.
The juggernaut was beginning to look more like a dinosaur and one that is only now trying to haul itself into the 21st century.
By comparison Rocket Internet has many of the qualities Tesco used to have. It is an expert imitator and has a knack of finding the right staff and the right partners. Moreover, its understands the new world of retailing and commerce like Tesco understood retailing back in the 1990s.
Disruption is the name of the game and it all began in Silicon Valley 15 years ago. During two visits to California back in 1998 first Oliver Samwer and then with his two brothers Alexander and Marc.
The brothers began absorbing the culture like a trio of sponges. First Oliver secured face time with CEOs as he completed his MBA dissertation. Then the brothers got jobs at companies they saw as pace-steers - offering to work for nothing.
Their first success was setting up eBay imitator Alando in January 1999 which was bought by eBay as it entered the German market five months later. The brothers have repeated the trick many times - adapting big ideas to local cultures.
They've been accused of being a 'clone factory' for other people's business strategies. But there's nothing the brothers have done that they wouldn't be the first to admit themselves - and probably a lot more. They have developed a reputation for parking tanks on lawns - and forcing firms to buy-out their local businesses just to get them out of the way.
But Rocket Internet has fast become an industry leader and those that dismiss them as merely printing carbon copies of ideas dreamt up by their betters risk deluding themselves.
The recent slump at design etailer Fab.com is widely attributed to the energy, perhaps even hubris, it expended taking out Rocket Internet's Bamerang.
Fast is the name of the game at Rocket Internet - and the brothers would stake their reputation on it. Tesco's dithering over the fate of its US chain Fresh & Easy (perhaps in part over some misplaced loyalty to former management, some might argue) would not have been something the more ruthless Samwer brothers would have indulged themselves over.
The morality of Oliver's decisiveness has been questioned - such as when he fired 400 staff from his Turkish operation - but the financial benefits haven't.
You could argue that Tesco is too far down the road as a corporation to adapt to new social and business norms that the Samwers take for granted. It is, after all, a grocer at heart and hypermarkets could not be further from the fleet of foot attitude of the internet if they tried.
How many people in Silicon Valley do we think sit around worrying what Tesco is up to next?
So, could Zalando help change their minds?
There is no doubt Tesco is now finally rubbing shoulders with the big boys, in global internet terms anyway. (Or should that be the bad boys?) Lazada is just one of 75 businesses backed by Rocket worldwide with a combined turnover of $3 billion.
Those include fashion etailers in South America (Dafiti), Russia and the CIS (Lamoda), Southeast Asia (Zalora), Europe (Zalando) and other businesses from food delivery to a peer-to-peer landing platform.
Lazada was founded in 2012 to replicate what Rocket is aiming to achieve in fashion elsewhere with general merchandise across Malaysia, Thailand, Indonesia, Vietnam and the Philippines. Despite the fact that Tesco already has online non-food operations in Malaysia and Thailand, Zalando already holds the number one spot in each of the five markets.
It's often said that there is no point being number three in international markets - you need to be number one or a fierce number two. Samwer doesn't even think that is a good enough benchmark.
Lazada means business. It has raised serious money in what Tesco might once have considered to be a small market where non-food online sales would be a nice add on to the main food business. It raised $100 million back in June and another $250 million last month.
Tesco has invested 'tens of millions' of pounds in the latest round alongside Kinnevik, serial ecommerce investor and Rocket Internet shareholder, and Verlinvest.
There's no question Tesco's executives lucky enough to be involved will learn a lot. The question is how much can they take from Oliver Samwer and his brothers business tactics and feed them back into an organisation which is creaking under the weight of its own legacy.
Tuesday, 31 December 2013
DaisyStreet.co.uk: Manchester's New Boohoo
So who is the latest Boohoo.com to come out of Manchester?
DaisyStreet.co.uk has been quietly making waves in the back streets of the UK's teen fashion scene for the last couple of years. But it was only last month that it's two twenty-something directors registered the company's name - Daisy Street Limited.
For the last two-and-a-half years Tejpal and Manveer Singh Grewal have been operating the firm through the holding company Virtual Insanity Limited.
We think the company is a magnitude of size smaller than Boohoo and that other fashion-obsessed daughter of the city Missguided.co.uk. But we also think its ambitions are no less big.
'Daisystreet.co.uk is an up and coming, blossoming etailer showcasing the freshest fashion online,' it says on its website.
'From the latest catwalk trends, to providing your essential wardrobe staples Daisystreet.co.uk has it all. We allow you to open the door to fast and affordable fashion, before it hits the high street and the masses,' it adds.
Sound familiar?
DaisyStreet.co.uk has been quietly making waves in the back streets of the UK's teen fashion scene for the last couple of years. But it was only last month that it's two twenty-something directors registered the company's name - Daisy Street Limited.
For the last two-and-a-half years Tejpal and Manveer Singh Grewal have been operating the firm through the holding company Virtual Insanity Limited.
We think the company is a magnitude of size smaller than Boohoo and that other fashion-obsessed daughter of the city Missguided.co.uk. But we also think its ambitions are no less big.
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| DaisyStreet.co.uk: blossoming |
'From the latest catwalk trends, to providing your essential wardrobe staples Daisystreet.co.uk has it all. We allow you to open the door to fast and affordable fashion, before it hits the high street and the masses,' it adds.
Sound familiar?
Like its larger rivals its is also offering express shipping to the US, Australia and Europe. It is also offering free postage on orders over £40 and Saturday delivery for orders made on Friday by 5pm. We're not convinced about the sub-clause suggesting customers should pay for postage and packaging on returns, but maybe that is a work in progress.
It has a pretty keenly priced offer at the moment on a small selection of dresses for less than £5 and tops from £1.99. But we thought at first glance that the price structure is a little less ordered than Boohoo.com but then that could well just be a symptom of the Sale.
But given the flurry of interest around Boohoo.com's potential stock market listing and the stratospheric valuation for its £100 million-or-so-turnover the registering of the name with Companies House perhaps suggests Tejpal, Manveer and the other family members involved with the firm have their eye on greater things. Perhaps even outside investment or, in the longer term, stock market plans of their own.
Monday, 22 April 2013
John Lewis Online Sales Hit £1bn
Department store John Lewis has announced annual internet sales have exceeded £1 billion for the first time.
The retailer said it has invested almost £40 million during a three year project to reorganise its internet division and offer. It said the strategy and increasing popularity of the site has meant it hit the £1 billion target a year early.
Online director Mark Lewis, who joined the retailer in January from courtier service CollectPlus and formerly at eBay, said: 'Passing the £1 billion milestone an entire year ahead of schedule is a fantastic achievement for us and a reflection of how central online shopping has become for customers.'
It said the mark was exceeded on a 52-week rolling basis and represents gross sales, that is, including VAT. Total sales at the department store chain increased 13.5 per cent last year to £3.8 billion. Rival Debenhams said its multichannel sales in the year to September were £251 million on sales of £2.7 billion. Marks & Spencer's online sales are estimated to be about £650 in the year to March on total general merchandise sales of around £4.3 billion.
The web site now includes wish list function and the inclusion of a search history. John Lewis said mobile now counts for over 25 per cent of traffic to the site and it has also improved its mobile offer to mirror the design of the main site and plans to launch a new app later this year.
John Lewis IT director Paul Coby said: 'With sales at johnlewis.com up over 40 per cent in 2012 we are seeing an unprecedented pace of online growth and customers are making more demands on our website, than ever before.'
'The billion-pound success is a reflection of out strategy to put the customer at the hear of our online operations.Early testing at every stage of the build and inviting over 3 million customers to use our beta site before full launch has resulted in what we believe will be an outstanding experience and journey for customers,' he said.
The retailer said it has invested almost £40 million during a three year project to reorganise its internet division and offer. It said the strategy and increasing popularity of the site has meant it hit the £1 billion target a year early.
Online director Mark Lewis, who joined the retailer in January from courtier service CollectPlus and formerly at eBay, said: 'Passing the £1 billion milestone an entire year ahead of schedule is a fantastic achievement for us and a reflection of how central online shopping has become for customers.'
It said the mark was exceeded on a 52-week rolling basis and represents gross sales, that is, including VAT. Total sales at the department store chain increased 13.5 per cent last year to £3.8 billion. Rival Debenhams said its multichannel sales in the year to September were £251 million on sales of £2.7 billion. Marks & Spencer's online sales are estimated to be about £650 in the year to March on total general merchandise sales of around £4.3 billion.
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| Tori diamond print dress from Collection by John Lewis |
The web site now includes wish list function and the inclusion of a search history. John Lewis said mobile now counts for over 25 per cent of traffic to the site and it has also improved its mobile offer to mirror the design of the main site and plans to launch a new app later this year.
John Lewis IT director Paul Coby said: 'With sales at johnlewis.com up over 40 per cent in 2012 we are seeing an unprecedented pace of online growth and customers are making more demands on our website, than ever before.'
'The billion-pound success is a reflection of out strategy to put the customer at the hear of our online operations.Early testing at every stage of the build and inviting over 3 million customers to use our beta site before full launch has resulted in what we believe will be an outstanding experience and journey for customers,' he said.
Friday, 12 April 2013
Ebooks account for a quarter of US sales, figures show
Tim Waterstone may have seen the writing on the wall when he launched his new digital venture this week. Or at least made a visit to the United States recently.
E-books last year accounted for 22.6 per cent of US publishers sales last year according to information released yesterday. A report from the Association of American Publishers said that figure compared to 17 per cent the previous year and just 3 per cent in 2009.
However, analysts suggest the figures indicate growth could be set to plateau from the rapid rises seen in 2010 and 2011.
But the levels of sales are an indication of the possible impact on the UK where the market is relatively immature.
Total book sales increased 6.2 per cent to $7.1 billion (£4.6 billion).
Earlier this week bookshop entrepreneur Waterstone announced he had been appointed a non-executive at Read Petite. The new online book venture will offer short stories and serialised books for handheld devices such as the Kindle and the Kobo.
E-books last year accounted for 22.6 per cent of US publishers sales last year according to information released yesterday. A report from the Association of American Publishers said that figure compared to 17 per cent the previous year and just 3 per cent in 2009.
However, analysts suggest the figures indicate growth could be set to plateau from the rapid rises seen in 2010 and 2011.
But the levels of sales are an indication of the possible impact on the UK where the market is relatively immature.
Total book sales increased 6.2 per cent to $7.1 billion (£4.6 billion).
Earlier this week bookshop entrepreneur Waterstone announced he had been appointed a non-executive at Read Petite. The new online book venture will offer short stories and serialised books for handheld devices such as the Kindle and the Kobo.
Thursday, 11 April 2013
Internet Sales at Marks & Spencer surge 23%
British High Street giant Marks & Spencer said online sales surged 22.9 per cent in the past three months as shoppers used its 'click and collect' service.
The rise is faster than the 10.8 per cent reported in the previous three months and will take total multi-channel sales in the year to around £650 million, it is estimated.
The increase helped the company to marginally beat analysts expectations of a 4 per cent drop in clothing and home wares sales. Like-for-like sales in clothing and home dropped 3.8 per cent. Marks & Spencer only offers a small food service online and the vast majority is clothing and home products.
It also said sales from mobile phones grew 70 per cent compared to last year after it improved its mobile site. It said its e-commerce distribution centre will begin to open next month ahead of the relaunch of its entire web platform in a year's time when it separates from Amazon.com.
'Multi-channel sales growth accelerated,' said chief executive Marc Bolland.
Group sales rose 3.1 per cent and total UK sales increased 2.6 per cent after food sales climbed 6.3 per cent. Total like-for-like sales (sales from mature stores open at least a year) increased 0.6 per cent and food sales on that basis increased 4 per cent. Overseas sales grew 7 per cent.
'We are working hard on improving our performance in general merchandise (clothing and home products) and, despite difficult trading conditions, we made progress in our operational execution,' he said.
The company said it held prices during much of the quarter but introduced tactical offers in March as promotional activity across the market intensified.
The rise is faster than the 10.8 per cent reported in the previous three months and will take total multi-channel sales in the year to around £650 million, it is estimated.
The increase helped the company to marginally beat analysts expectations of a 4 per cent drop in clothing and home wares sales. Like-for-like sales in clothing and home dropped 3.8 per cent. Marks & Spencer only offers a small food service online and the vast majority is clothing and home products.
It also said sales from mobile phones grew 70 per cent compared to last year after it improved its mobile site. It said its e-commerce distribution centre will begin to open next month ahead of the relaunch of its entire web platform in a year's time when it separates from Amazon.com.
'Multi-channel sales growth accelerated,' said chief executive Marc Bolland.
Group sales rose 3.1 per cent and total UK sales increased 2.6 per cent after food sales climbed 6.3 per cent. Total like-for-like sales (sales from mature stores open at least a year) increased 0.6 per cent and food sales on that basis increased 4 per cent. Overseas sales grew 7 per cent.
'We are working hard on improving our performance in general merchandise (clothing and home products) and, despite difficult trading conditions, we made progress in our operational execution,' he said.
The company said it held prices during much of the quarter but introduced tactical offers in March as promotional activity across the market intensified.
Bookshop Entrepreneur Waterstone Finally Cashes In On Digital Revolution
Bookshop entrepreneur Tim Waterstone has finally conceded the future may be digital and joined the board of a new online book venture.
Read Petite will begin trading in the autumn to capitalise on a rising demand its founders have identified for short stories that can be read on handheld devices such as Amazon's Kindle. Waterstone has been appointed as a non-executive at the firm and former editor of the Bookseller magazine Neill Denny is chief operating officer.
The site will launch officially next Tuesday at the London Book Fair. The strategy includes a plan to serialise books in a similar way to those published by Charles Dickens that were originally written weekly and utilised plot cliff-hangers.
Tim Waterstone founded the Waterstone's bookshop in 1982 after leaving WH Smith, disaffected and with a £6,000 redundancy cheque. He sold it for £9 million in 1993 but has since tried to buy the chain back several times before joining a successful bid from Russian oligarch Alexander Mamut two years ago.
He has been a vocal supporter of books and bookshops in the face of the online rivals. At first he dismissed the threat of e-books but has more recently insisted the books industry embrace the opportunity and even admits he recently bought a Kindle.
Last year he slammed Amazon for its aggressive business tactics that have enabled it to dominate the industry. He also complained about its 'tax structures' and said its global tax arrangements were 'grotesquely unfair' on High Street bookshops.
Read Petite will begin trading in the autumn to capitalise on a rising demand its founders have identified for short stories that can be read on handheld devices such as Amazon's Kindle. Waterstone has been appointed as a non-executive at the firm and former editor of the Bookseller magazine Neill Denny is chief operating officer.
The site will launch officially next Tuesday at the London Book Fair. The strategy includes a plan to serialise books in a similar way to those published by Charles Dickens that were originally written weekly and utilised plot cliff-hangers.
Tim Waterstone founded the Waterstone's bookshop in 1982 after leaving WH Smith, disaffected and with a £6,000 redundancy cheque. He sold it for £9 million in 1993 but has since tried to buy the chain back several times before joining a successful bid from Russian oligarch Alexander Mamut two years ago.
He has been a vocal supporter of books and bookshops in the face of the online rivals. At first he dismissed the threat of e-books but has more recently insisted the books industry embrace the opportunity and even admits he recently bought a Kindle.
Last year he slammed Amazon for its aggressive business tactics that have enabled it to dominate the industry. He also complained about its 'tax structures' and said its global tax arrangements were 'grotesquely unfair' on High Street bookshops.
Wednesday, 10 April 2013
Government Inquiry to Investigate Web's Impact on UK High Street
An inquiry that will examine the impact of the internet on Britain
The Department for Business, Innovation and Skills Select Committee
wants views from industry and the public on five key issues. That includes
evidence on progress made implementing the Portas review of town centres,
which began almost two years ago, and opinions on 'the impact of online sales
and direct sales on High Street retailers'.
The Select Committee will then hear views from selected industry
figures and lobby groups over the coming months before reaching its
conclusions.
Key representations expected from High Street retail groups have
already begun to emerge. Small shops groups argue that, while High Street
retailers are taxed heavily through business rates and burdened by rents,
online retailers are not. Retail lobby groups will suggest that online
retailers such as Amazon, Ebay and Asos have an easy time because of this light
touch. They are expected to demand a 'level playing field' on tax and insist a
business rates system based on property in an online world is unfair and
antiquated.
Other areas for the inquiry will include the continuing growth of
out-of-town shopping developments, planning laws and restrictions to town
centre shopping such as high car parking charges.
Opinion: Why this inquiry has received so little publicity is difficult
to fathom. The announcement of March 13 was barely picked up by news services –
on or offline - but its effects could be huge. Select Committees tend to act
where ministers fail to do so (the last BIS investigation into the grocery
industry in 2011 set up a watchdog in January to stop supermarkets bullying suppliers).
The dividing line between online and High Street retail is actually a large
grey area filled by those relying on both. The internet may even be saving some
traditional store-based retailers from collapse.
But the BIS inquiry into the retail sector is likely to highlight
the disparity between a vibrant online sector and beleaguered, declining High
Street shops. Politicians will act and such action is unlikely to favour online
retailers.
The effects of this little known inquiry could be felt across the
online industry for years to come.
Tuesday, 9 April 2013
Comment: Marks & Spencer Faces Biggest Test Online
All eyes in the City of London will be on UK retail giant Marks & Spencer this week. Sales are expected to be
down again. But observers should be looking for clues to the company’s future, not
in its bursting stockrooms, but in its online sales.
Online spending is proving more than ever to be the saviour
of forward thinking High Street chains. Clothing chain Next and department store John Lewis are two prime
examples. Both have long established interest in the potential of online growth
going back well over a decade.
At that time many at Marks & Spencer were still among those who gave the impression they thought internet was a fad. At
most, something they would consider over time if their customers showed any
interest. That came back to bite many a venerable old retailer (HMV to name one
but clothing retailers were among the most guilty) and the British High Street is still
suffering the consequences.
In 2007 M&S struck its deal with Amazon.com that would see
the internet giant providing it with its online platform. Before then it did
not have anything even approaching a comprehensive online offer – some home
wares and other bits and pieces (read the 2006 annual report – the words ‘web’,
‘online’ or ‘internet’ merit barely a mention other than to direct people to
corporate and shareholder information sources).
In 2007 then chief executive Sir Stuart Rose was talking
about of sales of around £100 million (the actual figure was a little vague).
He wanted sales of £500 million in five years. Last year it hit £559 million.
So far, so good. But that is not to say it shouldn't have been far higher. Next's catalogue and online sales account for a third of its total revenue. For M&S that would be about £1.5 billion. The
crutch in the form of the Amazon deal, some feel, has become more like a ball
and chain.
New chief executive Marc Bolland in autumn 2010 said he
wanted to deliver an additional £800 million to £1 billion to its internet
sales by 2014 – next year. The company scrapped its entire set of targets less
than a year ago because it said growth was being hampered by the recession. That
growth target, looking back, seems ludicrously ambitious and would have
required an estimated growth of around five-fold to £1.3 billion or more.
So, where are online sales now and where should they be? If
they have exceeded £700 million by year-end (which happened last week) that
will mean they have grown 25 per cent in the past year. That feels unlikely
(they grew 18 per cent last year and half billion-pound units in any business
usually face dwindling sales growth just by virtue of their sheer size).
Even so, that growth would only add 1.5 per cent or so to
its overall sales, about 3 per cent to total clothing sales. Is that enough to
counter a sales drop in its High Street clothing stores? Not this year. Maybe
next spring when Marks & Spencer is released from its Amazon contract. But
every year lost to under-achievement is another to catch up on later. The food
business is going great guns for now but that won’t always be the case.
Marks & Spencer’s board needs to fix its online business
and fast. The future isn’t waiting for them.
Monday, 8 April 2013
Boost to online sales in March amid freezing temperatures
Internet shopping sales rose in March amid freezing conditions on the High Street as many shoppers chose to stay home to avoid bad weather.
Barclaycard said internet sales in March increased 12 per cent despite the lack of appetite for Spring fashions. That compares to overall growth in consumer spending of 2.5 per cent and sales growth on the High Street of 0.4 per cent, according to a report.
That is slightly slower than the 13 per cent rise in online sales in February but continues to indicate the strength of online growth as High Street sales stall.
Overall spending should have received a boost from the early timing of Easter with three days of the Easter weekend falling in March. However, sales at DIY stores, which often compare the Easter boost to Christmas for other shops, are understood to have seen sales decline by about 11 per cent compared to the same month last year.
Spend on women's clothing stores fell by 10 per cent with men's down 7.4 per cent, the figures indicate.
Spending in restaurants (total spending up 9.8 per cent) and cinemas (up 8.8 per cent) benefited from some of the surplus cash as people looked for ways to treat themselves. Sales of electrical goods soared 8.4 per cent in stores and 36 per cent online. While utility bills also jumped up 15.5 per cent as Britons spent more cash on keeping warm and because charges have risen well above inflation.
But the data also suggests firms are adapting, the report said. While department stores’ sales fell 7.5 per cent overall, online sales increased 18 per cent.
Opinion: Barclaycard says its numbers account for around half of all spending. Clearly that is not the whole picture and could be skewed towards more affluent shoppers. But they also track payments through credit and debit card payments in systems they monitor through a host of retailers so the figures provide a strong indication of the direction and speed of travel.
This week Marks & Spencer is expected to become the latest retailer to complain that weather hit sales. Chief executive Marc Bolland is expected to emphasise the strength of his online business to convince shareholders the business is achieving a turnaround. He will say clothing sales in stores open at least a year and online fell by about 4.5 per cent. That brings the annual rate of decline in the year to the end of March to 4 per cent, City analysts have calculated.
Sunday, 7 April 2013
Amazon giving away MP3s with purchases of Vinyl
Amazon will begin giving customers free downloads of albums when they buy the vinyl version.
The strategy comes just four months after it began doing the same thing for CDs and will mean the MP3 gets added to the customer's Amazon Cloud Player library.
It's also back dating the offer to any purchases made since 1998.
Autorip is clearly a way for Amazon to try to combat internet rivals but also highlights how far High Street music retailers like HMV have fallen behind.
It's an additional feature that will no doubt tip the balance towards Amazon for some customers. The other benefit for Amazon is that it ties customers into their retailing world for next to no cost.
Of course, the usual small-print applies that might make some more wary users think twice (some of the tracks will be traceable so if 'leaks' occur they can be traced back). Downloads are also far lower quality than CD (wav.) music files.
It's also only available in the US at present.
It's also only available in the US at present.
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