When an industry disruptor enters a marketplace the impact on existing operators can be significant. It has been seen most notably in the retail sector and, of course, in areas such as taxis with Uber.
However, disruption should not equal extinction; disruption should lead to evolution. This is the conundrum very much facing traditional high street-based estate agents, which needs to be addressed to secure their futures.
When tech companies entered the market as online-only agents it sent a shockwave through the industry that evoked a number of reactions. Some dismissed the chances online-only agents had in succeeding, while others buried their heads in the sand as their market slowly erodes around them.
Traditional agents have then found themselves fighting on two fronts as they continue to battle against the decline of the high street; a conflict that saw estate agents becoming the second fastest declining retail category during the first half of 2018, beaten only by the closure of pubs.
But it need not be like this, and there is an opportunity for high street agents to maintain and build their presence in the property market both in traditional and online spaces using the hybrid model.
There are clear differences between online and high street agents, but they are both powerful tools that when combined can deliver customers the best of each sector, offering complimentary and symbiotic services.
Online agents have driven the fixed-fee, light-touch service that is embraced by buyers and sellers who prefer screen-swiping, mouse-clicking internet-based transactions.
Some online agents claim to be hybrid, because they have field operatives, but this is a misnomer as this travelling-salesman approach cannot beat the expertise, experience and reputation of high street agents.
It is these attributes that set so-called traditional agents apart and can ensure they have a place in the 21st century property market, simply by evolving their service.
Using the analogy of the car, a hybrid vehicle uses both the combustion engine and rechargeable batteries. Both independent and important power sources, but together provide a more comprehensive and effective fuel system.
To drive high street estate agents forward, embracing online is key. Many agents will claim they are already online with their website and listings on sites like Rightmove, but it is the evolved digital buying and selling model they need to tap into.
Buyers and sellers attracted to using online agents are those that often prefer greater control or have time to manage the process. This is often younger, first-time sellers who find an online service appealing.
This can be seen in the recent TwentyCi Property and Homemove Report for the second quarter of 2019, which saw online agencies enjoy a 1.7% growth in their market share for properties priced under £200,000, the bracket often containing first-time sellers.
The survey further reinforced the importance of a strong high street-based agency market with those firms eroding online agents’ market share in the £350,000 to £1 million and £1million-plus property brackets by 12.95% and 10.1% respectively.
That, I would suggest, is a clear indication of the two areas of consumer preference in the property market, which is not based on cost, but on the service the public want.
While those who prefer online are operating in the lower end of the price range, members of the public buying and selling more expensive properties want the more personal, attentive service provided by high street agents.
But these two customer bases should not be mutually exclusive, and agents can exploit them both through the hybrid model. This was something we identified two years ago in my agency, MovingWorks, which led to the creation of love2move, an online platform to enable independent high street agents to compliment, not diminish, their office-based services.
Since 2017, we have established a network of nearly 30 independent single and multiple-location high street agent operators across the UK. The network’s members have embraced the role online buying and selling can and will play in their agencies and recognise that their experience and expertise can add value to an online service and be a catalyst for sustainable business operations.
We are at a pivotal time for our industry as new and traditional services jostle for market share. However, the biggest winners will be those that combine both types of services and ensure that our proud and long-standing high street agents have a bright future ahead of them.
*Georgina Cox is founder of love2move and NAEA Propertymark Regional Executive for the North