And so it begins. The disintegration of the UK’s largest estate agent
Countrywide have today announced the closure of 59 branches across the country in addition to the consolidation of their London brands by morphing Faron Sutarian into John D Wood, one of the more established of their upper market shopfronts. Alan de Maid, Hetheringtons, Vanet, Fitz-Gibbon, APW Lettings, and CHK Mountford are also being re-labelled and will lead to additional offices ceasing to trade.
I take no pleasure in writing this. We have all experienced the anxiety and humiliation of having to downsize, especially us veterans of the property industry that have a few stripes on our sleeves.
But what Countrywide and it’s insane multiple of brands are experiencing was inevitable as of a while back. A bloated organisation with less than optimal customer service and an ever increasing push for higher fees at the expense of the consumer whilst the customer, in total contrast, was noticing that a great experience could be had within other sectors such as travel, grocery shopping, music, taxis, books and, in fact all consumer goods and at a lower cost. And folk are therefore bound to want the same type of experience when selling a property too. Why wouldn’t they?
Countrywide’s initial answer to the ‘Amazonificaton’ of the estate agency industry was to kick their experienced team members out on the street, badge themselves as some kind of ‘retail’ organisation (they are not) and to reorganise the UK into labelled zones as if such re-ordering would in itself make them a more efficient proposition or indeed a more attractive one toward the public.
Then in an attempt to show their shareholders that they ‘get’ the industry’s new direction of travel, Countrywide’s Alison Platt launches a ‘hybrid’ estate agency model to compete with eMoov, PurpleBricks etc. And themselves. This of course is a coup for the online/hybrid sector as it is absolute validation that the digital model is here and is here to stay.
Interestingly (and ironically), I have twice met with Countrywide executives to extoll the virtues of the digital model and, save for shaking them by the lapels to make them understand it and indeed the inevitability of its growth, have been met with mere apathy and scepticism both times. My suggestion to them was that Countrywide should invest in eMoov to then get the inside track on our customer focused technology platform (built and optimised ages ago now), the cost reduction and customer empowerment that such technology allows; our rather unique approach to marketing and, obviously, owning a chunk of a business that has now gone on to grow from a £1m valuation to very arguably £40m to £50m now.
To think that in 2011 I offered Bob Scarfe, then MD of Countrywide, 10% of eMoov for £100,000. That may well prove to be their very own Blockbuster moment.
Importantly and probably most importantly, we would provide significant cultural know-how and discipline around the demonstration of truly fantastic customer service, an aspect so vital to the growth of ‘new estate agency’ yet largely ignored, misunderstood and taken for granted by the incumbency. Trust me, eMoov is not just about great value and better fees, it’s more about the experience, a fact that even our high street colleagues are having to accept whilst they also accept their inability to compete on such service.
Roll forward 5 years from my first encounter and Countrywide, in a ‘we know best’ moment, decide not to ignore the online sector anymore but, despite the obvious carrot of conjoining with an established digital player that knows it’s stuff, instead go it alone with a platform build they outsource via Deloitte (why?) at a cost of £6m (why?). Three months after launch, the brands of Spencers, Austin Wyatt and Frank Innes that have guinea-pigged the ‘hybrid’ proposition right alongside a traditional fee structure (which is a massive mistake in my opinion), have in fact seen a decline in instructions as below. (Source: Zoopla API). Less listings at a lower transactional value? That doesn’t seem to make a lot of commercial sense to me and nor does it to numerous investors who have increasingly abandoned Countrywide PLC shares whereby the company’s market cap is now 60% less than a year ago having seen £600m wiped from its value.
What Alison has instigated by ignoring us and rolling out a misconceived low cost option alongside traditional brands is no more than an accelerated cannibalisation of her shareholders’ business and which will speed up further as we now hear that her hybrid ‘platform only, no people’ model is to be expanded across more branches. To use a Titanic inspired analogy, today’s 59 office closures are not only the tip of the iceberg but an iceberg that the ship itself is navigating ever closer to.
It’s my belief that we are witnessing history in the property sector right now with the disintegration of the UK’s largest estate agent along with its peers that similarly misunderstand the industry’s trajectory.
It’s quite sad yet it did not have to be that way.
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