Editor’s note: This item is republished with permission from Global Edge Marketing Ltd. The original post can be viewed here.
By ASHLEY RIGG
Tesco, the United Kingdom’s largest supermarket chain, has entered the real estate market in partnership with Spicerhaart, one of the country’s largest estate agency chains.
Tesco is promoting its service, iSold, to customers in Bristol, which it has chosen for its national launch, by suggesting that agents are not offering good value. The marketing slogan "We simply sell homes" is supported by the message: "In the last 10 years a lot of things got easier, simpler and better value. But estate agents certainly haven’t … until now."
The Tesco-branded service is betting that the strength of the brand and the promise of commission savings will be enough to convince sellers to part with an upfront fee of (about $454.55 in U.S. dollars) for the basic package .
ISold charges between (about $1,512.03 to $1,966.10 in U.S. dollars) to sell a property, depending on the level of marketing required, with around 70 percent payable on completion. The Web site claims that sellers can save up to (about $12,715 in U.S. dollars) compared to listing with traditional agents.
Changing the shape of U.K. real estate?
Tesco and other large supermarkets have long been criticized for … putting local traders out of business. Could Tesco do to the estate agent what it’s done to the local butcher, and could it start referring business to overseas property firms?
I think the sad answer to the first question is yes, at least partially. Most local estate agency markets are highly fragmented. Local agents compete with the big chains, and the businesses with the best locations, marketing and staff win the most (business).
Tesco is a powerful brand and could take (market) share from the weaker players, forcing them out of business. It won’t happen immediately, but in five years, it is not inconceivable that most U.K. (main) streets will contain a supermarket-branded agency chain.
It’s not a pleasant image, but I can see my mum listing her property with Asda.
As for overseas property, it won’t be a priority for the supermarkets for the foreseeable future and when it moves up the list, due diligence will be paramount. Like Your Move, the agency chains involved will strike a few big deals with large overseas agents and developers with impeccable track records.
Your referrer of the future could be a supermarket, but it’s unlikely for all but the biggest industry players. And if you are lucky enough to strike a deal, expect to get stung on (the amount) you have to pay away."
Copyright © 2010 Global Edge Marketing Ltd.
Related story at Inman News: "Buy a house at your local grocery"
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