Two leading property technology experts have warned Foxtons that it risks failing to keep up with the digital revolution which the agency itself once led.
James Dearsley and Eddie Holmes - whose PropTechConsult website and consultancy have already looked at Rightmove and Countrywide - follow a similar route in their analysis of Foxtons.
They say the agency has done well up to now but must not rest on its innovative laurals.
Praising the agency for being perhaps the industry’s first true digital innovator, Holmes and Dearsley (himself a former Foxtons employee, and now a contributor to Estate Agent Today) say the agency built an IT system, called BOS, “from the ground up”.
The system eventually handled marketing, property management, public relations, legal services, human resources management and much more. “The entire company was run from, and built around, this central architecture” they say.
But now that system - unique to Foxtons - is actually a problem. What’s more, it’s just one of three problems the pair diagnose with the agency.
“BOS is a closed system. No one else has it. No one else has spent close to 20 years perfecting the way that it works and so – and this is critical – no one, external to Foxtons, can easily integrate with it. They have developed themselves into a corner. This makes any type of partnerships with PropTech businesses, mergers and acquisitions or general investment activity very difficult to execute” say the pair.
This “leaves them at a competitive disadvantage in a sector where similar outfits, with newer business models and technologies are offering new value to the consumer.”
A second problem is people - or, if one reads the pair’s article, this could perhaps more accurately be described as ‘strategy’.
Dearsley and Holmes say Foxtons keeps opening offices and filling them with negotiators – “the very people most at risk from new ways of working” – thus creating a large capital risk, notwithstanding the low basic salary that many negotiators in that firm enjoy.
“The capital cost of branch leasing and fit out is significant. Is it necessary in an age when multichannel, digital offerings are the trend?” ask the PropTech duo. They even suggest the troubled Countrywide could have something to teach Foxtons.
The third problem area is what the pair call ‘The Value Proposition’.
They suggest that Foxtons - now heavily reliant on lettings as a result of London’s sales slump - needs to look for innovative ways of making money yet appearing good value to customers in the evolving lettings worlds of Build To Rent, short lets, property management and ‘deal making’.
“Whilst Foxtons has historically had an incredible process for dealing with lettings, this doesn’t mean it is prepared for future innovation around both deal making and the ongoing management of properties” say Dearsley and Holmes.
As always, the pair have created a provocative look at how a well-known operator in the agency world could improve and be more innovative.
You can read the whole piece here.