What impact has the Hybrid Agency had on the high street?
Updated: Jan 23
(First published in Nov 2019)
When the now largest online only agency entered into the property market in 2012 the initial reaction from most ‘traditional’ agents was more sympathy than concern. Purplebricks weren’t the first, and in the early days they didn’t have much impact. Things changed when pumped with money and a huge marketing effort they started to take market-share through offering ‘the same service at a much lower price’. The reaction from the establishment was interesting to watch. Some massively overreacted, a lot belittled the idea and others scrabbled to become the new ‘online’ version (including some brand agencies that did so by buying stakes in other platforms). What most shared in common was the openness to undermine and attack the upfront fee and modus operandi of the online-only model. The stark reality was that in some regions, selling online was saving clients tens of thousands of pounds (if they sold). It was a gamble many were, are some still are, prepared to take.
Has the revolution been quashed? Whilst Purplebricks’ fall from grace has been staggering over the last 24 months, with losses and withdrawals from various regions, its UK business share value down 70% and now
YOPA's value sliding the wrong way, it has exposed both positives and negatives with the way property is bought and sold in England and Wales. It has also provided a golden opportunity to improve. Here’s how:
1.The online revolution exposed several weaknesses of the traditional model. The biggest one being that scrubbing away the flashy website and marketing, when sellers were looking at appointing a company to sell their home when compared to the online options they quickly arrived at the lowest common denominator – the fee. By doing so, some high street agencies simply could not justify theirs. It drove many to berate and trash the online model all of which played into the hands of the digital companies who were suggesting this is exactly the reaction their clients should expect and just highlights the very problem. The more the high street shouted, the greater the effect. It forced fees down, it has also forced some out of business.
2. The leap to offer online only along side the traditional model served to undermine the existing business further. The rush to jump on the bandwagon meant poorly executed initiatives and schemes hit the buffers quickly. Why on earth would somebody pay several £’000s more for a near identical service from the same company? It confused would-be customers and to competitors it was an easy opportunity to criticise and provide reasoning as to why they should be given the instruction.
3. Online also relies on a predominantly dispersed workforce. There is no central point where teams and clients/customers can interact on a daily basis, chat, build meaningful relationships. It gives individuals the responsibility of looking after postcodes on their lonesome. Capitalising on the ‘working from home’ culture, sales people were lured into working mostly alone for the majority of their day. Of course this would have been a major benefit for some, for others it made for a lonely existence, juggling numerous roles and responsibilities that meant providing a high-level of service to clients at the same time was near impossible.
4. It showed that although it needed some further refinement, the idea of a hub was a good one. As an example, Countrywide for years have operated several brands in the same area, all fighting for the same properties and market share. They did so in direct competition with each other but also with several expensive cost centres. It doubled up on staff, office costs, operating costs – everything was duplicated. It was non-sensical. Many other brands were fielding one office in the same region as maybe 2 or 3 brands of the large corporates. In some places in London Foxtons fielded one office to up to 6 Countrywide offices. Some hybrid agencies do now exist and seem to have a balance of a central hub, self-employed agents and a centralised location for the team to meet each other and clients.
5. Online was only part of the property selling jigsaw. It failed to address the process of effecting timely exchange of contracts post agreeing a sale. The biggest revolution will come when the conveyancing process is clear for every person involved. It is of course unfair to expect a single company or collective to change the current procedure but it does show that too many companies are focussing on getting an offer agreed and have no interest or active input into the conveyancing process. Home Information Packs (HIPs) were pretty much universally hated, not least due to their stifling effect of getting property onto the market quickly, but they were onto something. There is no denying the importance of due diligence but making it clear and concise would be a huge advantage to getting the process completed quickly. Time is the biggest killer of agreed deals – streamline this process and every stakeholder will benefit from it.
Hybrid, traditional, online, the fundamental strength of agency is in the talent and ability of its people. It is not a difficult job to do but to do well does require effort and hard work. It also requires an understanding and acceptance that the marketing side of the business is just a piece of the jigsaw. When businesses hang their hats on their marketing and online presence and neglect the other important elements that are part of the bigger picture, they will struggle to effect exchanges whilst keeping client and customer happy along the way.
It truly is a people business and replacing talented individuals with automated, faceless and personality free digital platforms do not allow the seller to build trust and rapport with their agent. In a highly personal and emotive process, human rules over machine. People need nurturing, help, support, training and stimulation in their working life. If companies want to revolutionise, they should start with their most important, and mostly undervalued, asset.