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December 10, 2006

Boots: online defense

The merger of Alliance Unichem and Boots gave the companies a major boost in their distribution channels for health, beauty and pharmacy items, but Alliance Boots is not standing still. The two-year website development project should help protect Boots' share of the growing online market in the face of growing competition.

By CBR Staff Writer

Boots will soon be starting on a six-figure overhaul of its transactional website.

Rival Superdrug has this week launched its own transactional website offering the retailer’s 1,200 best selling products. With its strong value focus and reputation it will put up a real challenge to Boots’ online sales, particularly among younger consumers – where Superdrug has its strongest appeal.

Fulfilment costs have been a major deterrent from many value retailers putting low-priced products online – but the difference between Superdrug’s and Boots’ site prices is not as extensive as one might expect. Boots has become much more price competitive over recent years and both retailers are offering an extensive range of product promotions online to build volumes in the run-up to Christmas.

The typically brand-focused nature of health & beauty lends easily to price comparisons, which is particularly relevant online where comparing prices is faster and more convenient – and repeat brand purchases more likely in the absence of new products to touch and smell. Boots will be highly cautious of its position on key items, particularly with the arrival of a new and well known rival online.

Boots’ website overhaul will include a fresh focus on its No 7 cosmetics range – items that cannot be purchased from rivals’ sites, and therefore an important set of products to drive visits to If a consumer is buying at least one product from, the delivery charge would be enough to offset many price benefits that may be available from shopping elsewhere.

Boots’ loyalty scheme, promotional offers and extensive ranges further entice consumers to continue using the retailer. However, while Boots’ wide range of available products is clearly an advantage, it can also make shopping on the site a fairly slow process – another factor the retailer will need to address during its revamp if it wants to increase average basket sizes.

Source: Verdict Research

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