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Lessons for estate agents from Sir Philip Green’s fall from grace

One of the hybrid agency sector’s leading agents says there are key lessons our industry can learn from the collapse of Sir Philip Green’s Arcadia group.

Topshop, Burton and Dorothy Perkins owner Arcadia fell into administration overnight, putting 13,000 jobs at risk.

In a four-minute read exclusively available on Estate Agent Today, EweMove’s managing director Nick Neill suggests a key problem for Green was his inability to recognise some new trends including giving consumers what they want - and when they want it.

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Neill says many residential agents have the same challenges and in some cases respond no better than Green and Arcadia. It’s a provocative read, and you can see it below. 

Please let us know what you think by leaving a comment and entering our poll.

Where billionaire Sir Philip Green went wrong and why it matters to every estate agent in the UK. A four-minute read.

I’m writing this on Monday 30 November with BBC Radio Five Live playing in the background.

This morning’s news feed has been dominated by the imminent collapse of the Arcadia Group.

For those who might not be aware of that name, you’ll know the brands and businesses that sat proudly under its umbrella.

The Arcadia Group owns Top Shop, Burton, and Dorothy Perkins to name but a few well-known staples of the UK’s High Street landscape.

And while Sir Phil swans about in the tax haven for the uber-rich that is Monaco, up to 13,000 of the group’s staff sadly face redundancy, uncertainty and anxiety in the run-up to Christmas.

Could this collapse have been avoided? All the marketing and retail experts I’ve listened to so far have said yes.

At the root of the group’s troubles seem to be Green’s reluctance to move with the times.

As the retail world went digital Arcadia sat on their hands with a Luddite mentality.

A reporter who has written extensively about the group told a story on the radio today about how Green had dismissed ASOS, the website-only fashion supplier, as “a fad”.

ASOS, along with the rise of several other online-focussed ‘shops’ including Pretty Little Thing, Boohoo and Miss Guided have stolen a vast, now uncatchable march on Top Shop and the rest. 

Sadly, the reluctance to invest in the group’s online offering 15 years ago has led them, and their deeply unfortunate staff, to where they are today.

Why it matters to estate agents

There is one thing that brands that have lasted 50-100 years have in common.

They have continually and skilfully reinvented themselves to deliver what the customer wants.

Look at Disney, Cadbury, and Sainsbury’s – all household names that have always moved with the times. Even Kodak is making a comeback from the demise of camera film by deploying some innovative block-chain technology to help photographers protect their image rights.

Study the way Jeff Bezos has made customer satisfaction an obsessive part of Amazon’s incredible success story.

Put simply if you are not growing in business you are dying. Nothing stays the same, including what home sellers and landlords want from an agency.

“What they want, when they want it.”

 Any agency that is growing has realised and responded to the changing habits of consumers.

As one of the retail analysts picking through the bones of Green’s empire put it ‘he didn’t realise that in today’s world you need to give consumers what they want, but most importantly, when they want it.’

This open all hours and access all areas approach is what EweMove was founded upon.

The digital age client wants an array of 24-7 contact options, live out of office hours chat, and the ability to see what’s happening with their property transactions from the comfort of their sofa and via their smartphones.

We’re focussed on achieving the best commercial outcomes for our clients. As are other successful agencies because when it comes down to selling someone’s home, what do THEY really want most?

Usually, it’s getting the most money in the shortest possible time for their property with the minimum amount of hassle.

And all the marketing, software, business planning and staff training we do as estate agents needs to have a laser focus on helping THEM achieve that.

And when that happens, the future looks bright for a select portion of our industry.

Why do I say ‘select’? Well, many agencies aren’t evolving, they are standing still and slowly falling backwards. 

And those that are trying new ‘PropTech’ to stay current, are actually missing the point.  PropTech is great at helping agents find new leads, but it’s not so focussed on delivering the outcomes customers want or expect, and this is a potential mistake for many to make.

For them, I fear the writing is on the same wall as it is for the Arcadia Group, which is such a great shame.

Thanks for reading, Nick Neill

Poll: What do you think estate agency should do?

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  • icon

    Maybe Nick should look closer to home for business ethics. Its unbecoming how often he tries to poach my staff to set up a franchise with his sheep with various email and letter campaigns.

    Nick Neill

    Hi Agent sensible. it was well over 18 months (or more) since our last letter campaign, and any emails that are sent to people in our database of interested franchisees are to subscribers to our database - or via eshots from the likes of Estate Agent Today. So everything could only ever be received from us if it has been accepted as part of an individual's marketing preferences / choices. So if any emails are received by your staff it must only be for these reasons but happy to look at supressing any recipients of yours if you'd like me to?

     
  • James Hurst

    Perhaps if greedy Green didn’t extract £1.2 billion from Arcadia in 2005 to spend on yachts and champagne (no tax paid either) and invested it in the group it would be a profitable business.

    Algarve  Investor

    Agreed. Green is an odious individual and very much the unacceptable face of capitalism (see also Mike Ashley). He's almost Dickensian in his grotesqueness and greed.

    I have not one iota of sympathy for the man himself, given the BHS fiasco and the issues he's had with pension black holes - not to mention the numerous stories about his inappropriate behaviour - but you can't help but feel for the thousands of staff that could lose their jobs both in the Arcadia Group and Debenhams. Hopefully new roles can be found for them if the stores head online rather than reopening for the long-term.

    Green didn't move with the times - didn't invest in online like Boohoo and Asos have (albeit those companies have issues of their own to contend with - and Covid was just the final straw. Arcadia had been slowly dying for years.

    Expect more major names to go to the wall in the coming months and years, as the high street continues to decline, with more companies also switching to property - like John Lewis - to offset the negative financial impact of this.

    I don't think the same thing will happen with estate agents, as they can afford to be far more flexible and have shown that they can cope well with operating from home or with a skeleton staff. I think the hybrid approach will be king - but a genuinely hybrid approach, not an online agency claiming to be hybrid while offering very low fees.

    I'm sure many agencies are considering whether it's worth it to have a fixed base, with all the costs attached, but then again a high street presence and a presence in the community are crucial for many local independents, so I doubt will see huge changes.

     
  • Simon Pelling

    I agree with all Nick has said, and in fact I run an online Estate Agency for Spain, Sell4LessSpain, however one thing I think Nick is missing is that as well as embracing new methods and not resting on your laurels its important to also differentiate in other ways - eg price. I recently looked to sell my lock and leave apartment in the UK and contacted the Bishops Stortford branch of EweMove and could not understand how they were asking for the same fee as the established, local traditional agents on the high street - be different but also differentiate on price - transform the market - like Bohoo and Asos have done for Sir Philip!.

    Nick Neill

    Hi Simon - the EweMove model is what I would regard as 'premium' in that we offer a very close customer relationship throughout the transaction which delivers a number of customer focussed and commercial outcomes, which are:
    - We sell houses for more money that an 'average' agent (according to 20EA data analysis)
    - We sell more quickly than an average agent (same data analysis)
    - We lose less stock to competitors than anyone else (same data analysis)
    - We complete over 70% of the stock we list, compared to

     
  • Mike  Stainsby

    There is room in Estate Agency for many different models and the customer will ultimately decide which they prefer. It's a bit of a stretch comparing these models but understand the attempt to draw a comparison to show what is 'right' and 'wrong' with UK estate agency. In my opinion it is the infrastructure which is creaking under the strain, this is where innovation will help to ease the burden. The UK market will find ways to improve itself and those adopters will reap the rewards as they circumvent the issues and improve their service delivery.

    Nick Neill

    A great summary - Improving Service Delivery is what it takes. And combine this with better commercial outcomes for the customer too and you're on to a winner!

     
  • Dharmesh Mistry

    There is more to Arcadia that simply customers moving online, and yes some sales will have been lost to the on-line brands like BooHoo. But it is also because of some of the ways companies like Zara have re-invented the backroom of retailing, literally creating thousands of products just in time whilst consumers are buying, moving on to new when they stop... As said above it is not about "minor improvements" in efficiency, but a re-invention that will kill businesses.
    Coming from the banking space, Building Societies and small banks with their heads in the sand as soon going to disappear because by the time they surface the customer will have moved on...

    Nick Neill

    A very good observation which I agree with - giving customers what they want, when they want it, is the future of almost every business undertaking.

     
  • girish mehta

    Customer service is important. Keep it simple and give personal service. You can have all bells and whistles it and on line presence. Is you do not listen to what your customer want. You are doomed.lots of on line business will promise compete on price but fail to resolve customer complaints.

    Nick Neill

    Personal service is the foundation of good customer service, I agree, which is the fundamental basis on which the EweMove model is built. Our tech layer sits behind our franchisees so they can maximise their 'face time' with customers - not hide behind the tech! As we all know, great estate agents are great with customers and this is where all business model design should be focussed, allowing good people to do what they do best, for the most time possible....And make the stuff behind the scenes as efficient and seamless as possible, as this delivers Net Margins of c60% for our franchised business owners, compared to c10-30% for a typical traditional set-up.

    I think we've got it right, but there is of course more we could do. We won Best National Letting Agent in 2019 and came in the Top3% of all sales agents. In 2020 we won #1 UK position for both titles, so we're getting better - and that's tough do achieve across a broad UK wide network - but we know we can do more as some of the top class boutique independents still show us all the lessons to be learned for the future.

     
  • Hybrid Agent

    Still so much confusion regarding the future of high street estate agency. When any trade stops being able to perform how consumers want and alternative providers are more widely available at a more appealing cost the older business becomes unsustainable. Top shop Vs Boohoo. I find it hard to understand why more people don't see the same thing is happening in the estate agency industry. A 'work from home' agent with the help of technology is able to provide a more appropriate service for the requirements of both buyers and sellers than a high street shop can with much lower overheads. It makes you wonder why Connells appear so keen to dig further in to the high street hole that Countrywide is? Why invest so heavily in a declining business model? Read more on where we are in the shift away from the high street in the book "The No.1 Hybrid Estate Agent. How to Evolve in Property Sales" on Amazon

    Nick Neill

    I think the COVID-19 lockdown, where every agent in the UK had to become a home-based agent - overnight - and the customer had to accept that too - means that we will see an acceleration of already moving shift to personal agency!

     
  • icon

    Why are we comparing apples with oranges? How long will it take for people to realise that agency isn't retail. We've already seen where that got Countrywide, so you would have hoped lessons would have been learned.
    People are only every interested in what's in it for them. If your agency can genuinely demonstrate that you can provide the best outcome (not the lowest fee) then they will use you, whether you're sat in a high street office with a card box and telephone or sat in your bedroom with every piece of proptech known to man.
    Agency is a service, not a product.

    Nick Neill

    Can't argue with that! And 'what's in it for them', ins't just the sale of their home for the best price - it's also their move and purchase of their next place to live and the journey between the two. Agency is easy and fun right up to the point you get an acceptable offer, then the hard work really starts and being close to your customer and building a strong relationship to deal with the inevitable hurdles along the way is what truly separates the wheat from the chaff - and is where your deserved premium fee is justified.

     
  • icon

    Absolutely, and the skill, agility and experience required to navigate that tricky path is different in every case and has lots of moving parts. It's not a book that just has to be packaged and posted, which is why I find the comparisons with retail tedious - no offence.

    Nick Neill

    No offence taken Shaun at all! The comparison to retail is simply to highlight the point that (as in any business), you adapt or die. As Charles Darwin is often quoted to have said, 'it is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself'

     
  • icon

    All agents have adapted and now use technology as part of their approach. This isn't just the domain of 'hybrid' agents. In fact, what exactly is a 'hybrid' agent? How does ditching the office and working from the car represent a Darwinian leap in evolution?
    Since when did a model that requires it's employees to be 'chief, cook and bottle washer' represent evolution? Surely, one of the key benefits of our evolution is to have worked out the benefits of the division of labour, something most hybrid models seems to have ditched.
    I suppose it's ironic that to be an 'expert' you also have to be a specialist, and specialisation is directly linked to divison of labour. Perhaps somebody should tell the Purple gang that.

    Hybrid Agent

    Being a Hybrid agent is the mix of technology with experienced local agents working from home, often with centralized admin. support. The retail office filled with phone answering staff printing hand-out or post-out sales brochures is the outdated model. Done this way to demonstrate to a vendor client a sense of scale and to over complicate the selling process to artificially justify taking £1000s from the sales proceeds of a selling client. The evolution is the move away from the need for so much expensively situated labour. If a client can book a viewing, make an offer and book a valuation online 24/7 having seen a property or agent on a portal or via social media then no requirement for that retail shop and 6 phone calls to book a single viewing. If the clothes buyer can receive the same outcome online at Boohoo more cheaply and conveniently than at Topshop that is what they will do. So many similarities to the evolution being seen in estate agency, you just have to look.

     
  • icon

    Does think Neill not give it a rest !

    Nick Neill

    No, I never stop thinking!! 😀

     
  • icon

    A very good piece Nick.

    Of course, if Sir Philip Green is anything like the autocratic “bully” that we’re led to believe that he might be then there is another lesson to learn.

    That of the danger of not allowing the team to “think the unthinkable”

    Bob

    PS - also agree about “PropTech”

    Nick Neill

    Thanks Bob

    Thinking the Unthinkable is a great thing to do, but not easy. Which to a certain extent we've all had to cope with during lockdown. I saw a great GIF recently that read, 'Anyone who was asked in 2015 what they will be doing in 5 years time was probably wholly wrong'.

    Or at least - how they will be doing it. Not the ideal trigger for a business model review, but a trigger nonetheless!

     
  • Mike  Stainsby

    Agents need to find differentiators that will attract both buyers and sellers to their offering we offer free platforms to enable agents to collaborate closer with their chosen conveyancing partners and direct access to protocol forms and Search packs to get legally prepared. There's a good place to start - any takers?

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