June 25, 2009 3:00 am

Woolworths turns into click n' mix

From pick n' mix to click n' mix; Woolworths will today be given the chance of a second life online.

The 100-year old high street chain, which lost its battle for survival at the end of last year, has been revived by its new owner, Shop Direct Group, as a standalone web business.

But some analysts said the brand would struggle to wrest market share from other internet retailers.

Shop Direct Group, which operates Littlewoods, bought the Woolworths brand in February after the chain fell into administration. Mark Newton-Jones, Shop Direct's chief executive, said the Woolworths brand, which was criticised for its haphazard product mix, would focus on children's toys and entertainment, while ditching household items.

He also said the new online Woolworths was not intended to be a discount retailer. "This is about quality, value for money and great service. We're not trying to compete to be the cheapest in any of our product categories."

Shop Direct hopes a big advertising campaign, a child-friendly website with an interactive graphic to buy pick n' mix sweets, and perks such as free cinema tickets will encourage families to shop together and make impulse purchases.

The cyber Woolies should be profit-making by the end of its first year, it said.

However, analysts doubt that Woolworths will be able to gain significant market share from supermarkets and other entertainment outlets such as Amazon, the world's largest online retailer.

David Stoddart, a retail analyst at Altium, said: "Differentiating points are all well and good but they need to be value-adding. "And the idea that we're all going to sit round like some 'Bisto-advert' family all straining to see the screen just isn't how people shop online," he said.

In order to bring back Woolworths within 20 weeks of purchasing the brand, the website was also launched in its early stages with three separate online check-outs.

Andrew Wade, an analyst at Numis, said: "They haven't invested too much in it so it's unlikely to be a disaster. The overheads are pretty low."

See Lombard

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