Iceland delivers Net shopping coup

Frozen food retailer Iceland has made a dramatic ecommerce bid to upstage its rivals.

Next month, the company will extend its phone-based home delivery service to the Internet, offering the service to 97 per cent of UK homes. Unlike its phone-based service, orders of more than £40 taken over the web will be delivered free.

Currently, most supermarket chains are trialling Internet shopping services, but only in selected regions, and all charge for deliveries.

Researcher Datamonitor predicts that the percentage of UK households shopping online will increase from 2.2 per cent this year to 16.5 per cent by 2003.

But despite the predicted growth, many rival online services have not progressed beyond the trial stage, because of cost and infrastructure problems.

"To do ecommerce well, [retail] organisations have to go through massive change," said Simon Bragg, senior analyst at researcher ARC. "But if you do it right and organise your warehouse, the costs could be quite similar to traditional retailing."

Iceland already makes 92,000 home deliveries a week using its distribution network of 1000 vans and drivers.

A spokeswoman claimed that the retailer can offer Internet shopping more cheaply than its rivals because of this network and its smaller product line.

Food retailing rivals may be slow to follow Iceland's move nationwide.

Tesco currently offers Net shopping to customers within delivery range of 37 stores, and plans to expand that to just 100 stores by February.

A Tesco spokesman said that the retailer may "make a decision" on how much further it will roll out its trial early next year. Tesco claims that it is now making a profit from the service after initial losses.

Sainsbury's offers web shopping from only nine stores. It is building a £10 million 80,000sq ft distribution centre which will be operational early next year, but only serving customers within the M25.

- Argos' web site accidentally advertised television sets priced at just £3 last week. The retailer's refusal to honour the hundreds of orders for the bargain television could herald a test case that will define how ecommerce contracts are exchanged.

See also:

Iceland sells eco-friendly fridges online

Frozen food specialist Iceland has added environmentally friendly fridges and freezers to the range of products it already sells online.  08 Feb 2000

Tesco homes in on e-retail

Tesco has unveiled plans to use Internet based communication technology as a key weapon in the growing battle between retail giants.  08 Oct 1999

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