Can UK Estate Agency learn to live with the Online Generation?
It has been said many times and in many different ways that success comes from looking forward, and not from looking backwards, and never has this sentiment been more true right now than in UK estate agency. For well over 50 years the estate agency fraternity in this country has relied on the same inflation proof fee percentage model to sustain itself, which to be fair has proved both resilient and reliable, right up until, well ………now.
So, what has changed? And why now? Well of course there are a multitude of answers to such fundamental questions, but I guess the obvious answer is quite simply “us”, and our changing consumer spending habits. To illustrate this point, you need to look at consumer spending behaviour on a much broader level.
Firstly, it is important to understand that E-commerce is the fastest growing retail market in both Europe and North America right now, with online sales in the UK alone growing by 16.2% from £52.25 billion to £60.04 billion* in just one year between 2015-2016 (*figures from the Centre for Retail Research). More interestingly perhaps, is the fact that the same data source confirms that online sales in the UK currently enjoy a market share of 16.8% (up from 9.4% in 2010), with this figure expected to rise significantly over the next five years.
So, what does this say about us, the UK consumer? Well, I am no psychologist, but I would surmise that online shopping is perceived as both practical and convenient, as well as much less time consuming. It is also cheaper, as putting the price of the goods purchased aside for a moment, we save on both fuel and car parking charges.
But how does this relate to estate agency I hear you ask? Well firstly, as I have stated above, the mindset of “us” as consumers has changed – quite possibly for ever, and our children in particular, have grown up knowing little else other than purchasing goods and services via a machine – so, you really don’t have to be Nostradamus to predict the future.
Secondly, the birth of the internet has raised all our expectations in terms of choice, service and immediacy – naturally you would expect there to be a plethora of service options available to the consumer, in every conceivable area of retail, including estate agency. Like never before over the past 50 years, buyers, sellers, landlords and tenants will all have direct access to evolving on- line services that will be offered at differing price points. A triumph of consumer choice? Or just a recipe for confusion? Well, I will let you all be the judge of that. But I suppose the great thing about the internet is that if an idea doesn’t work or isn’t popular – it soon gets consigned to history and/or overtaken by something better that is re-invented in its place.
Is High Street estate agency trading on borrowed time? Well to a point, the answer is of course yes – but what consumers demand most of all is choice, and there will be many people still, who both appreciate and value human interaction, in what is after all, an important and significant step (to sell or buy a property) in all of our lives. But, will that be enough to sustain High Street estate agents in their present number? Sadly not I am afraid.
You see unless High Street estate agents fundamentally revise their traditional business model, economic reality can and will, only go one way. Where will it all end up? I have a suspicion that in the majority of cases, most will adopt a variation of what we now call the “hybrid” model i.e. a combination of High Street presence with “feet on the ground” combined with their own individual online offering. However, I believe that there will still be a place in the market for “specialists” who are differentiated by their knowledge or expertise in a particular physical area or market sector.
It remains to be seen whether the online generation of consumers will come to embrace this “new dawn” – in the words of the great Bob Dylan “the times they are a changing”, but is that really such a bad thing?
The author of this article is Peter Nicholls, CEO of Ideology Consulting. For further information, go to www.ideologyconsulting.co.uk
You May Also Enjoy
Letting Agency Owners: Are You the Bottleneck in Your Business?
Latest developments in Renters’ Rights Bill: What landlords need to know
What Will Commonhold Mean for Property Managers?
Think You Know Mortgages? These 5 Myths Could Be Costing You Money
Just 17% of homes selling for more than £500k
