From the editor

The grocery store next door

April 27, 2010
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As Tesco plans to develop "mini-villages" containing hundreds of homes located near a Tesco supermarket,  one can't help but wonder how this will affect in-store marketing programs.




Retailers have always been clever about how they merchandise products.

Picking up some fruit? Maybe you'd like to dip it in some chocolate? Coincidentally, there's dipping chocolate for purchase right next to the strawberries.

Need some ice cream? The caramel or hot fudge sauce located on the end cap might just be the perfect complement.

Looking for a new home? You’ll find that right next to your neighborhood Tesco store... Yes, you heard right. That’s the scenario some in the UK will face as Tesco develops four "mini-villages," as reported in The Times. The mini-villages will feature hundreds of homes, all located near a Tesco supermarket. Some of the villages will even have "mixed-use living and leisure" schemes, incorporating ice rinks, schools, parks and bus depots into the community. Consumers can purchase a house through Tesco's estate agent service, secure a mortgage through its banking arm and furnish it with Tesco products bought on one of the company's credit cards.

Depending on how the plan is executed, the villages could be a great way to boost the economy. But critics suggest these developments could give Tesco too much power.

"There’s a sense that they are using their market power to dominate aspects of the economy," says Josh Ryan-Collins, researcher of monetary reform at the New Economics Foundation. "There is a need for more affordable housing, but there is a danger with Tesco’s moves. If they provide the mortgage, if they act as estate agent, if they provide a credit card, if they sell you a house, they will end up with more personal information about you than the government.”

As mentioned in one of our past blog postings, some retailers are starting to use the cameras in their stores to track the patterns and emotional reactions of consumers when they're shopping. Imagine what retailers could do if they added personal information to that data.

It's uncertain whether Tesco will even be allowed to use their home buyers' information to better market to them. But, regardless, it's clear that, at some point, consumers and retailers will need to define what "crosses the line" in shopper marketing. For now, power is in the hands of retailers-but for how long?

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