Tesco has announced it will be closing its non-food-related website Tesco Direct, with plans to allow customers to buy a larger range of goods through a “single online platform”.
The supermarket aims to close the website in July 2018, as well as the fulfilment centre which serves orders from the Tesco Direct website.
The brand claimed the reason for the closure was a lack of profitability despite the amount spent on costs for fulfilment and online marketing for that arm of the business.
“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,” said Charles Wilson, CEO of Tesco UK and ROI.
“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.”
By removing the Tesco Direct brand, the retailer believes it will improve its website experience for customers as general merchandise will be available for purchase in the same place online as clothing and groceries.
Technology adoption is increasingly forcing retailers to focus more on delivering a good customer experience to keep consumers loyal and the supermarket began the process of disbanding its Tesco Direct website by offering some products such as toys, home and cookware on its main Tesco.com website.
Jobs in retail are already reportedly in decline, and the closure of the Tesco Direct fulfilment centre and website will put approximately 500 Tesco jobs at risk of redundancy across the business.
Tesco’s online offering, Tesco.com, will offer the uniform embroidery services and Tesco Mobile products currently only available at Tesco Direct through its Tesco.com website.
The supermarket has been focused on its digital offerings over the last year, initially be expanding the regions that would be able to receive its same-day grocery delivery service, and then by appointing a new chief technology officer, Guus Dekkers, who was tasked with continuing the firm’s digital transformation – which it has been working on over the last three years.
In April 2018, the retailer announced it had seen nine quarters of consecutive growth for the business, with like-for-like online grocery sales up by 5.1% in February 2018.
This growth in online sales has seemingly come at the cost of footfall in its physical locations, and has previously blamed falling profits on its shift towards becoming a more omni-channel-focused retailer.