Tesco S Korean Subway Virtual Store

DISCUSSION TOPIC

Tesco Takes Virtual Store to Subway Riders in South Korea 07/06/2011

TOPIC SUMMARY:

Tesco was looking for answers in South Korea. According to a video from the company (be sure to watch it), its Home Plus chain was second largest in the market and investigating ways to gain share without adding physical stores. Management reasoned that hard working South Koreans needed something that would make their lives easier.

The answer that Home Plus came up with was to take the store, a virtual one at that, to consumers inside a subway station.

The virtual location is laid out exactly the way a typical Home Plus store would be. The company has created photo layouts of products it sells with a unique code for each product. Consumers scan the QR codes for the items they wish to purchase and then check out. Orders are automatically delivered to the consumer by the end of the day.

According to the chain’s video, the virtual store has brought it thousands of new customers and its online sales in South Korea have increased by 130 percent.

Home Plus’ virtual store is just one of many innovations likely to come to retailing with the development of mobile technologies.

Discussion questions:  What do you think of the Home Plus virtual store? Does it have applications in the U.S. market?

My post:

Tesco has often created innovative shopping solutions and this is simply their latest.  They have focused on the specific shopping needs and behaviors of the South Korean consumer and designed a unique method to combine two activities, commuting on the subway and shopping for that day’s grocery needs, into one.  The whole allure of mobile platforms i.e. tablets and smart phones, is the potential for allowing people to shop wherever they are.  The virtual subway store enables people to shop the way they like – either independently on their device at the on-line store, or “roaming the aisles” via the virtual store.  Based on the stated results, the consumer is reacting well.  Over time, this method may lose it’s novelty but it is a brilliant way to entice more consumers to try the online store.

Would it work in the U.S.?  Probably not in the same way.  The subway experience in the U.S. is far different than in Asia.  In addition, home delivered online grocery shopping is not well penetrated in the U.S. as compared to South Korea.  However, the point here is for the retailer to consider placing the virtual store in an area where the consumer would enjoy shopping.  Where might that be in a U.S. metro market?  I am not sure – but I would not dismiss the possibility.  Grand Central Station?  A section of wall in a large office tower?  Interesting to imagine.

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full article at Retailwire.com:  Tesco S Korean Subway Virtual Store

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