Not all retailers are destined to build a successful online marketplace; those who jump in unprepared succumb to failure like Tesco Direct.
The non-food website of supermarket giant Tesco is set to shut down on 1st July, along with their Fenny Lock fulfilment centre, after six years of operation.
Majority of the goods on the marketplace have already been moved to Tesco.com where it shall be sold along with the retailer’s grocery items.
Looking back, Tesco Direct’s attempts to outshine Amazon, whose strategy they copied and prices they undercut, all turned out to be futile as they’ve not managed to gain the lead.
Although they haven’t admitted defeat, Tesco said closing down their non-food website was their only recourse for a loss-making business that hasn’t contributed much to the financial growth of the company.
According to Charles Wilson, CEO for Tesco UK:
“We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform.”
The company added that the high costs of fulfilment and online marketing, which are without doubt among Amazon’s areas of specialization, kept Tesco Direct from really taking off.
The effect of the closure on third-party sellers
Tesco Direct have been highly selective about third-party sellers from day one, so we’re pretty sure their closure isn’t going to affect businesses on a grand scale.
Still, we feel for those who are currently selling on their website as it’s not going to be easy for them to find a new outlet for their products, especially if Tesco Direct have helped improve their top line.
“This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future,” reassures Wilson.
What do you think of Tesco Direct’s decision to cease trading? Let us know in the comments below.
As always, to your continued success,
Dave & Matt