Tesco’s online fashion store is launching this autumn, and Venda has won the lucrative contract to become its e-commerce partner.
Tesco’s move into the world of online fashion comes after excellent recession-busting growth from the likes of ASOS, which the supermarket giant has squarely in its sights.
Initial reports suggested that the Tesco venture would focus on the retailer’s own-brand products, but it is thought that third party brands will be introduced next year.
Tesco will immediately concentrate on promoting its own labels, and while some commentators suggest it won’t compete in the same space, insiders are bullish. This is Tesco, after all.
A source told me: “The expectations are as you would expect: aggressive. Tesco wants to go head to head with ASOS”.
It won’t be easy. ASOS is one of the darlings of the pureplay online retailing world, and recently doubled annual pre-tax profits to £14.1m on revenue of £165m. It attracts more than 5m unique visitors a month and adds 1,000 product lines a week.
Then again, Tesco’s multichannel reach is second to none, and it has very deep pockets. A source added:
“It is definitely possible in a short timescale, given the current level of traffic, the opportunity to target customers through the stores, the 8m strong clubcard database and the growth of Tesco Direct."
The key is going to be the breadth of its range and how well its buyers do. Selling own-brand products will not appeal to the discerning fashionista. If it wants to compete seriously in this space then it must attract lots of third party brands. Next year, labels such as Firetrap, Fred Perry and Ben Sherman are expected to be sold via the Tesco online fashion store.
And what of the brand name? It is unconfirmed, but the Tesco online clothing store may well be called TescoClothing. That URL is showing as ‘under construction’. Perhaps a coincidence.
The Tesco site will be powered by the Venda platform, allowing it to scale up quickly, reducing the time to market and allowing the retailer to reduce the amount of investment needed to make the new store a reality.
Venda Founder and Chairman Dan Wagner says Tesco’s selection of Venda’s software as a service platform “illustrates how outsourced on-demand e-commerce solutions have now come of age”. He added: “We look forward to helping them achieve the significant scale that they are planning for their online fashion business.”
As well as Tesco, Venda powers e-commerce websites operated by Laura Ashley, Universal Music, TK Maxx, DeBeers and Urban Outfitters.
Venda has been linked with an IPO recently and is currently keeping an eye on the market and speaking with investment banks.
Chris Lake is Director of Product Development at Econsultancy, an entrepreneur and a long-term internet fiend. Follow him on Twitter or connect via Linkedin.
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1:31PM on 20th July 2009
Don't think Tesco's being realistic. They'd have to provide one kick-ass site to rival the user experience of asos.com.
Director of Product Development at Econsultancy
1:53PM on 20th July 2009
I fully agree, but like I said, it has deep pockets and multichannel reach. It's going to be a branding thing that makes or breaks it's ambition, and whether it can lure enough decent fashion brands to get into bed with it.
1:52AM on 21st July 2009
Well done to Venda for doing the business with Tesco. However, with total respect to Venda as a great company, Venda as a platform is a good, but pretty standard ecommerce platform that has (until now at least) been something of a starting point for a lot of brands online, who then go on to do something more bespoke after a they find their feet.
Their real strength is the short time to market that they offer and the (relatively) comprehensive feature list that comes out the box, but its reasonably far removed from the cutting edge. Indeed, although Venda's client list is impressive, their ex-client list is pretty good also...
Thus given Tesco's strong online presence, their decision to go with Venda suggests that this is a limited budget toe-in-the-water and not a serious all-in play.
Or to put it another way, although Venda is the platform of choice in the UK fashion industry (by number of clients in the sector), it doesn't take too long looking round the likes of Laura Ashley or Monsoon (both on Venda) to see that they are just a slight notch below the likes of ASOS or Figleaves, who have rolled their own.
Of course none of this takes into account the fact that Tesco could put up an OSCommerce site and sell buckets based on their brand alone...
11:46AM on 21st July 2009
A good freind of mine has been working out in India for the past few months heavely involved with the new Tesco online clothing project.
Big thinks apparently...! A 'watch this space' moment I believe.
4:24AM on 13th March 2010
heir real strength is the short time to market that they offer and the (relatively) comprehensive feature list that comes out the box, but its reasonably far removed from the cutting edge.
10:23AM on 22nd April 2010
I fully agree, but like I said,Thus given Tesco's strong online presence, their decision to go with Venda suggests that this is a limited budget toe-in-the-water and not a serious all-in play. its reasonably far removed from the cutting edge.