Tesco is launching one-hour deliveries in a pilot program in central London (Zones 1 and 2). Up to 20 instore products such as bread, fruit and veg, meat, frozen produce and (you’ll be grateful if you’ve ever run out) even loo roll. The trademark ‘Tesco now’ was registered back in 2015.
The one-hour delivery move has drawn obvious comparisons to Amazon who also offer speedy grocery deliveries in select areas. The difference with Amazon is that they also with Prime Now can offer tens of thousands of products for same day or one hour delivery as well. Tesco plan to charge £5.99 for the delivery service, compared to Amazon who charge £6.99.
Unlike Amazon who are having to build their infrastructure from scratch, Tesco already have a vast store network (you’re probably within 10 minutes of one as you read this) so the only thing they would need to expand rapidly would be the delivery network. For the London trial they’re partnering with Quiqup, but of course Tesco can already deliver with a selected time slot to just about every house in the UK so all they would need to do is speed up local pick, pack and shipping to cover more of the country.
The interesting question is how far do Tesco’s delivery ambitions stretch? Obviously you can have food delivered in a day or so at a time of your choosing, but you can also order with click and collect from Tesco Direct and pick up in a local store. Interestingly, if you’re a Tesco marketplace seller your products can also be made available for Click and Collect, so it’s not a great stretch to envisage that once the product is in a local store you won’t be able to pay your six quid to have it picked up and delivered to you with Tesco Now if you can’t be bothered to walk or drive to the shop.
Tesco Now isn’t going to impact marketplace sellers today, but it may well do so in the future. Amazon is such a powerhouse of selling because they offer so much such as video, music, reading, delivery etc to their Prime members. Argos are competing on the product side, but don’t have groceries (although they do now with their Sainsbury’s ownership). Tesco as the largest supermarket in the country could take on Amazon on the food side, but could also start to compete with their other goods and marketplace offerings. That’s when Tesco Now will get interesting.