Home Plus, Korea’s second largest supermarket chain which is 95 percent owned by U.K.-based grocery giant Tesco, highlights the potential for mobile proximity technologies to transform the way retailers operate. Tesco is re-creating the supermarket on subway billboards. It’s a wonderful blend of retail and technology.
Does it work? Yes. Tesco’s sales increased 130 percent in three months, and the number of registered users went up by 76 percent. Tesco is now the leader in online groceries and is closing the gap with E-mart in offline groceries. With 10 million smartphone users in a population of less than 50 million, Tesco seems to have set it sights on becoming the leader in the supermarket space by using online sales.
Whose idea was it? The application was developed in association with Cheil Worldwide, an advertising and online development group. Savvy move because it rewrites the idea of the virtual store as not only an advertising campaign but as a way of building a supermarket in a space that already exists and is highly trafficked.
I’m not sure whether it’s innovative. Combining supermarkets and the internet to create an online shopping experience has been done many times over; however, the idea is an extension of the online shopping ideal blended with local consumer trends. South Koreans are known to have the second busiest lifestyles in the world. Creating a consumer solution for these professionals creates a niche market but one that has yet to explored. What I like about it is that there’s no need for radical change in consumer behavior.
The Tesco model has extended the base of marketing in all sorts of new directions. The parameters of research can be extended to consumer behavior along with what purchases are most common in mobile shopping. The model continues to be a success and it also rips apart normal market analysis to include consumers on the go. With the explosion of mobile phones, new approaches to online shopping are possible.
What about NFC? NFC probably wasn’t used because the items on the virtual “shelves” were too close together. The transmission of data between the display and phone may have been improbable considering the lack of overall poster real estate. NFC is also a lot harder to implement than having a printer that creates QR codes. However, NFC may be the next layer of shopping where loyalty programs can be implemented and coupons can be sent to the customer’s mobile device and the purchase is completed by QR code. It’s foreseeable to see an iteration in which QR codes co-exist in a world with NFC technology.
Although QR codes have been around since 1994, it was always looking for a problem to solve. It seems as though the Tesco model has helped to make a market for QR codes because of its simplicity of design and cost. Not a bad way to get your groceries.
PS – Congratulations to South Korea for being the third Asian city to host the Winter Olympic Games in 2018!
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