Estate agents. An example of a broken digital business model?
This article caught my attention last summer: one in five high street estate agents risk going bust.
We’re already seeing this play out with startups like Purple Bricks and HouseSimple establishing themselves.
There’s a lack of digital innovation from traditional estate agents. They’ve already lost, but they haven’t realised yet.
I was asked to judge a digital awards event last year, and had to look at a number of high end estate agent entries (mostly from the South East of England). The only ‘digital innovation’ on show was slicker websites and large screens in traditional shop fronts.
You can see the investment in both these ‘shop fronts’ for the industry, but this is not responding to the increasingly digital business models being adopted by new competitors and other companies that we might describe as being of the internet.
Introducing digital screens in physical spaces simple won’t cut it. This isn’t digital, it’s digital paper over the cracks of old business models.
The winners in this sector are likely to be those who adopt completely new business models rather than just websites, with affordability and cheaper services (through greater automation of activities and capabilities) key to beating the established market leaders.
Being of the internet is increasingly about moving your business models away from fixed physical assets and costs. This should be an opportunity to create value in new ways, or share more of the value you help create with other people and organisations.
This must be a difficult conundrum if you’re primarily in the business of selling physical spaces as investments. And this has been the business model for the most ‘successful’ estate agents of recent times (think last 10-20 years and the UK housing boom).
In order to reinvent the housing sector you need to be able to understand digital through a different lens. Any focus on user needs for housing will have to reject many of the values of the existing commercial sector attached to it.
Everyone needs a place to live.
Helping people find, buy and sell homes. Somewhere to live, love, and belong to a community, might be a great match for a connection-driven design approach.
This is my blog where I’ve been writing for 18 years. You can follow all of my posts by subscribing to this RSS feed. You can also find me on Bluesky, less frequently now on X (formally Twitter), and on LinkedIn.