UKNM: Boots online strategy?

[Martin Forrest]

Boots announced its results and strategy going forward last Thursday which

included its repositioning as a healthcare provider through the

establishment of Dental & Chiropody 'shops' as well as 'fitness suites.'


In the fine print, it announced the formation of bootsphoto.com with the

help of Scient. A few things that fascinated me:


* bootsphoto.com will be developed within the current Boots organisation  ie

not as a jv or separate entity with a blend of current Boots and new

e-employees on e-based compensation and benefits


* bootsphoto.com starts off from a higher cost base than its potential Euro

competitors such as Fotango.com and easyMemories.com who have no physical

infrastructure to support and set against revenues. As such, Boots is not

likely to be able to compete on price.


What does this say about Boots and e-commerce?


* The market voted with a thumbs down and the share price went down to one

of its lowest levels for some time.


* The buying in of Scient's  e-consultancy services seem to have been

tokenism.


* Lack of confidence in what is a solid B2C brand with a good client base

muddied in wake of the excitement around Boo.


Finally, why is Boots making tactical announcements ie handbag.com and

bootsphoto.com rather than committing itself to a definite strategic

direction?


Martin



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