This week has seen the official launch of a new real estate service in the UK, bringing the British public a real estate service packaged up with their weekly groceries.
Tesco, the largest UK grocery chain has partnered with Spicerhaart, one of the UK’s largest real estate chains to establish iSold – what they describe as “The UK’s newest estate agency, iSold has taken the very best in estate agency and made it even better”.
The service offered by iSold appears from the website analysis to be a 3 tiered full service comprising an up front fee of £299 (NZ$636) for valuation and marketing including extensive online profile of the property across the main websites. A completion fee of £700 (NZ$1,500) is payable on sale. This basic package is complemented by a Premium package at a total cost of £1,119 (NZ$2,380) and Premium Plus at £1,299 (NZ$2,764) – no clear details of the extent of the premium services are yet available.
It is clear from the current site that a lot of focus is placed on the valuation and the right pricing to help you sell. The site states that iSold has their own locally-based valuation experts. The initial launch has been focused in Bristol before this week rolling out around a number of regional centers across the country.
This activity comes close on the heals of the move by RE/MAX real estate brokerage in New England (US) to open 17 micro real estate offices within a chain of grocery stores.
The question is – Is this likely to be a future trend for the real estate industry here in NZ as more and more real estate offices question their high street presence as more of the marketing moves online?
There is quiet a bit of precedent already established in this area of grocery chain diversification. It is worth reflecting on this to provide some perspective to this concept. Here in NZ we had an ambitious move by Foodstuffs in 2003 to establish a banking service (SuperBank) in their New World stores. That move which was itself modeled on the Tesco banking service in the UK ultimately failed to capture sufficient customers before the business folded in 2006 with all the customers being transferred to Kiwibank.
The fact is grocery stores are very high traffic outlets. They are very strong retail brands and they are always looking for higher margin offerings to supplement the high volume / low margin grocery business. So there is a possibility for such a move in the future. It is also interesting to compare this UK iSold model with “The Joneses” business model launched back in 2007 with a full service agency based on a fixed fee service instead of traditional commissions.
If Brits really believe their home is worth what a non buying non-emotional third party says it is I suppose this system will work for them. It won’t work here because Kiwis are conditioned to squeezing the last dollar out of every buyer with little regard for what a non buying non-emotional thrid party thinks.
Steve
The point is Tesco is purely providing a branded platform to allow Spicerhaart to springboard off. As I see it (intuitive thought) – you register and sign up pay your money and a estate agent from Spicerhaart turns up on your doorstep complete with sign and signs a listing agreement (or UK equivalent).
This then is a lead generation tool which leverages the Tesco brand for which they clip the ticket as a license operation.
Lead generation, yes it’s quite clever and should build spicerhaart’s brand. Because our way of doing real estate is so different here in NZ (commission versus salary being but one big difference), what I’m really saying is that we won’t see Ray White’s or Harcourts etc tapping into supermarkets’ customer base. Though maybe someone will give it a try, but I think it would fail – like the Joneses. Anyone up for it?