Coles Myer e-comm splurge boosts local market

The Australian e-commerce market has received its biggest boost yet, with retailing giant Coles Myer launching a consolidated online presence, encompassing retailing, business-to-business transactions, business development and other services such as the provision of fulfilment, database management and marketing support.

Dubbed e.colesmyer, the new entity is structured as a separate operating arm of the organisation to allow Coles Myer to participate in e-commerce equity markets.

According to Jon Wood, previously Coles Myer's CIO, now managing director of e.colesmyer, the company anticipates that its e-commerce entity will achieve revenues of $253 million over the next 12 months.

However, it is not expected to make a profit for the first two years of its operation.

"To prevent e.colesmyer's results from getting lost in core business results, it will be separately reported in the coming financial year," said Dennis Eck, Coles Myer's CEO. "We may also look at floating elements of the business we have established, and participating via equity in e-related business."

He said establishing e.colesmyer as a separate entity would allow it to compete unshackled in the online sector while allowing for the possibility of a partial or full float in the future.

The most prominent part of e.colesmyer is its shopping and information portal, colesmyer.com.

Although the portal still has links to the company's brands such as Coles, Target and Grace Brothers, it now pulls together products offered by all its business units. In the past, customers had to go to the Coles Online site to buy groceries and Myer Direct to shop for clothes.

The portal also offers popular content such as news, weather and stock prices, which are provided by Yahoo Australia and New Zealand. "The content provided by Yahoo will push users towards colesmyer.com and help increase traffic to the site," Wood said.

Both Eck and Wood commented that e.colesmyer has an advantage over many e-tail sites because it will leverage the company's bricks-and-mortar assets such as known brands, databases of customer behaviour from 15 million transactions per week, a delivery infrastructure and established supplier relationships.

E.colesmyer's business-to-business capability includes: the Coles Myer data gateway, its electronic data interchange; OfficeWorks Direct, a procurement system for internal and external clients; and business-to-consumer extensions in the areas of wine and computers.

In the future, the company will establish a Web portal that opens a gateway for stores, suppliers and strategic partners.

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