Tesco ramps up digital business in push-back against threat from Amazon
Tesco is accelerating its digital entertainment business to challenge Amazon, as the American giant begins its push into grocery retailing.
The supermarket has promoted Michael Comish, the head of its UK on-demand movie service Blinkbox to lead all its online services as group digital officer. It is currently building a 30,000 sq ft office in Farringdon, outside London, to attract web development talent. Mr Comish will oversee an effort to make Tesco’s online services more user-friendly and integrated with its shops.
As well as movies, the company offers music streaming via We7, a British start-up it bought last year, and will soon launch its e-books service following the acquisition of Mobcast in September.
“We’re going really fast on this,” said Mr Comish. “We’re launching three products this year and out new development centre will be open in autumn.”
“Two years ago Tesco wouldn’t be thought of a digital entertainment brand but now we are in the top three in Britain. Very few companies who have the assets we have to exploit in terms of physical shops and brands.”
The new offices will house around 350 staff dedicated to Tesco’s online products, he said.
The push comes amid signs that Amazon plans to attack on Tesco’s grocery stronghold. This month it emerged that Amazon will begin delivering fresh food in 40 American cities this year, with international expansion to follow.
Tesco hopes that by offering digital entertainment products it can shore up a customer base that might otherwise be tempted to shop elsewhere online.
“We’re doing this because there’s so much money at stake,” said Mr Comish. “The competition for customers is everywhere.”
Amazon is also investing in London and is due to open 210,000 sq ft offices in Holborn this year to compete for development talent.