One of the most prevalent themes to run through science fiction writing is the idea that the future will be dominated by one single company which will supply anything and everything you might need in life. The concept of the omnipotent ‘mega-corp’ breeds on the fear that consumerism and capitalism will drive businesses down the route that will lead to inevitable consolidation until, one day, there will only be one company left in existence. This process is driven by souless individuals with no sanctity for the human being. People are simply the faceless consumers and the whole experience part of a general breakdown in society.
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While ideas such as these may be the preserve of authors with vivid imaginations, many often draw comparisons with the way the large supermarket chains operate. American supermarket WalMart is seen as the greatest example of this; regarded as the ultimate villain in terms of worker rights and marginalising the majority in the search for higher profits. However, Tesco has been lumped into a similar bracket by many, evoking parallel arguments of love and hate as either the biggest success story in modern British retailing or an unstoppable monolith that will take over the world.
Therefore, the news that it was to make a move into the UK property market has brought these views, both negative and positive, back to the surface. However, will Tesco’s entry into the world of online property marketing be just another step on the road to total world domination or a bridge too far?
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Natural progression
Announcing the initiative, Laura Wade-Gery, CEO of Tesco.com, believed it was a natural progression for the company.
She said: “Tesco Property Market is the latest of our retailing services. For the home mover, it brings together our simple, convenient and affordable products in financial services, telecoms and home shopping. It offers a ‘one-stop shop’ for everything related to moving house, and we hope this will make life a little simpler and save money for many home movers.”
The concept seems simple enough. By accessing its website, home sellers can either choose to list their property through a professional estate agent or go the independent route and market it themselves. They are given the webspace to put around 20 images of their home online, as well as other information on the property and the surrounding area, such as schools, parks and other local amenities. The home seller also has the option of setting their own valuation for the property by comparing the cost of similar properties in the area.
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One of the key draws for Tesco is price, with a listing on its website costing £199 – thereby potentially saving movers thousands of pounds in estate agent fees. But will sellers be prepared to go it alone and circumvent the estate agent?
Fatally flawed
Andy Etches, managing director at Brightsale, doesn’t believe so. He explains: “The pure ‘sell it yourself’ online model as proposed by Tesco is fatally flawed. Selling a home is a very big deal and people do not feel confident in going it completely alone. They need the support not just of sophisticated online tools, but also of a properly trained single point person who can negotiate with buyers, deal with solicitors, chase up chains and attend to the many other aspects of completing a property sale.”
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Support from estate agencies has also been less than enthusiastic about Tesco’s move, with reports of a number of the main property sites already turning down the opportunity to work with Tesco on the project.
A spokesperson for Halifax Estate Agents believed that while the internet was becoming a vital tool in the buying and selling process, what Tesco was offering was markedly different to other online sites.
“The internet is an increasingly important tool but the primary place which people look when searching for property is the estate agents window. The Tesco site is purely an advertising tool which doesn’t do all the other important things which estate agents do.”
Changing thinking
One factor which would need to be addressed if Tesco’s online property marketing proposition is to be a success is that people’s thinking needs to change. As stated above, most people look to estate agents when they want to buy a property and rarely look at what is being marketed privately. Therefore, Tesco will have to work hard to make itself a logical place to look for houses.
Warren Bright, chief executive of propertyfinder.com, admitted he didn’t see UK consumers making the link between Tesco and the idea of buying property.
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He explains: “I don’t see the connection between selling a property and Tesco. They may have moved into a number of different areas but selling homes is a completely different kettle of fish to selling food and mobile phones. It is Tesco so it’s a big brand with a big budget but I just don’t see consumers making the connection.”
A big job on its hands
Therefore, it seems Tesco could have a big job on its hands if it is to crack another consumer market on its way to ‘global domination’. However, as Melanie Bien, associate director at Savills Private Finance, points out, the wider market may already be against it.
“With the housing market slowing down, as it seems to be, you will need someone who is working for you to push the property to potential buyers all of the time. If someone is looking half-heartedly at a property on a website, they can just pass over it and click on the next one. But if you have someone marketing it for you then they can influence the buyer.”
