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I would be the last one
to suggest that real estate firms should fight against the trend toward
e-commerce. In fact, I think that the industry is moving far to slowly to
respond to competition from Web-based companies. With the emergence of Ziprealty,
E-home, Global Staake and E-Realty, the battle has been joined--and it must be
fought. While these firms are for the moment just straws in the win, they
nevertheless pose a challenge to real estate no less significant than that
presented by Charles Schwab and E-trade to the traditional stock brokerage
industry. But, how far should the
typical real estate firm go toward the e-commerce model. Let's begin with a
basic premise: you must have a web presence.
Without it, you cannot compete with other firms. Technology will not
replace Realtors, but Realtors with technology will replace Realtors without
technology. Make the effort to hire a technologist or partner with a technology
firm to create your electronic identity. Yet, that isn’t the
whole story. Unlike stock brokerage, or travel, or insurance, real estate is not
very easily made into a commodity. Each property is unique and irreproduceable,
so the human touch remains (and will remain) the essential part of the market.
You will need some degree of physical presence. There are three areas where
clicks will never replace bricks: Customer
Service. This is the core of the
new economy. Since the consumer calls the shots, creating a consumer value
proposition is the key to profit and growth. Delivering excellent customer
service requires investment, but this time in people, backed by excellent
electronic tools. Knowledge
Delivery. Information is
worthless. It can be found less costly on the Web for just about every industry.
Real estate has even gone so far as to create its own utility (Home Store) to
distribute information. But knowledge--actionable information--is priceless and
that can only be delivered through dialogue between real people. Marketing. Banner ads have
proliferated on the Web, but they do not have the status of a full marketing
campaign directed by marketing professionals through media that reach real
customers. Please do not mistake
these words for justification of the status quo…quite the contrary. The status
quo is strangling the real estate industry and will ultimately cause it to be
devoured by the new competitors. The uses of bricks and mortar described above
do not represent the current activities of traditional real estate firms. Most
companies still adhere to the "feet on the street" philosophy of
marketing, setting up stores wherever the opportunity arises and still focusing
on possessing the information contained in the local MLS. The electronic model
will not overwhelm the real estate business but it will force fundamental
changes in the current business model. Unless you can migrate your company to a
"clicks and mortar" model, mixing e-commerce and physical presence to
deliver true consumer value, you'll find that the parade has passed you by. |
