In the relentless pursuit to cut costs and leverage digital and tech, are Estate Agents forgetting the very essence of the business?
This week we’ve heard more about the plans of a large national corporate agency investing nearly £30m capital in the creation of super offices. The general idea being a large, centrally located office surrounded by satellite valuers who will be feeding new instructions into this one base. Once new listings have landed in the new offices they are set upon by a pack of consultants who have the task of arranging viewings and getting them sold, all backed up by the corporate offering of financial services and panelled solicitors. At a time when tech and digital have levelled the playing field with online only agents exposing the a lack of value some agents offer clients through their traditional offering, it is easy to see how harnessing automation and a systematic approach could work. First the scale alone might be incentive enough to coax would be landlords and sellers. The saying ‘many hands making light work’ and if the model is partly based on sheer volume and numbers, there could be some merit in the idea. There are other obvious benefits of doing this at scale too, not least purchasing power of digital and print suppliers for example. It also further undermines the idea that agents need a large numbers of offices competing for stock in the same area or postcodes. Countrywide (who have just today rejected a c£82m takeover bid by Connells) failed to grasp this until it was forced to close businesses and brands to save money. Foxtons had a scaled down version of the super offices covering areas in London – sometimes the ratio of Countrywide: Foxtons offices stood at as high as 6:1. Automated but fiercely competitive too, Foxtons were extremely successful through it’s use of tech (relatively speaking) and workforce brute strength.
Where we see more automation and technology, we also see the degradation of the personal, human touch. Buying and selling a home can be highly emotional at times and the assurance of a human to deal with who knows the area, the local school, distance to the shops or railway station all helps in building the picture of living in a new home and who can guide a transaction from start to finish. It’s not clear to see how this can be replaced with a highly technical call centre type approach – maybe in time it will. What is clear is that the chances of not having this information or idiosyncratic knowledge of client or property are much greater when situated several miles away and this is exactly where the local high street Estate Agents can make gains. Local knowledge coupled with enough technology to compete on the efficiency and process stakes, as well as a strong working knowledge of the conveyancing processes gives the smaller brands the perfect opportunity to demonstrate their value. Agency needs more smart locally driven businesses that see tech as an additional arrow in their quiver – not replacing it altogether.