Published on: March 21, 2017by Michael Sansolo
Amid the endless stories and worries of e-commerce disruption and destruction of existing industries, it’s both interesting and instructive to find an area that seems strangely unaffected.
The apparent absence of impact reminded me of "The Adventure of Silver Blaze," a famous Sherlock Holmes story that hinges on a dog that didn’t bark ... eEspecially when the industry in question is real estate, which hardly seems like a candidate for such unusual status in the Internet age.
Yet, as the Washington Post reported this weekend, real estate agents seem to be going about their business in much the way they always have. The percentage of home buyers using them is relatively stable and even the commission rates garnered on transactions has barely budged.
And this is happening despite the entry of sites like Zillow and Redfin that promised to change the industry.
So what gives?
It’s a complex mix of issues, according to the Post story. First, real estate is hardly a simple transaction. When people are buying homes they are most likely making their largest purchase ever, and they are dealing with complexities, like offers and counter-offers, contracts and the entire laborious process. Faced with those tasks, buyers seem to like the guidance of an experienced professional.
Secondly, the real estate industry has done everything possible to handicap inroads by the e-agents, with efforts ranging from lobbying to direct action to impede the new sites. Though the efforts haven’t been completely successful, they have helped buy time in some areas.
Most interestingly, though, real estate agents have learned to use the emerging e-commerce sites to their advantage. As some agents interviewed by the Post explained, that ranges from constant monitoring of real estate apps to using language translation apps to better serve customers who might not speak English.
As the Post reported, the real estate example “offers potential lessons for workers in other industries worried about the Internet’s destructive powers. The web has changed how agents hustle for a share of…residential real estate commissions. But it hasn’t taken their jobs. In fact, the number of agents has grown 60 percent in the past two decades.”
A key piece of the success may stem from the ability of realtors to position themselves as agents for the consumer rather than middlemen. The latter group is usually viewed as adding little value and lots of cost. The former are all about value.
This is one point made in the Coca-Cola Retailing Research Council report I recently wrote about here on food retailing’s quest for continued relevance. As the report explained, consumers are constantly looking to buy something they need from someone they trust. Position yourself well as an agent for the consumer and you gain that trust, but recognize that position is constantly under assault now from myriad e-commerce portals.
The industry has long positioned itself - rightly or wrongly - as the purchasing agent for the consumer. Increasingly, that role needs to expand. To combat the new world of electronic competitors trusted agents need provide advice on diet, recipes, tastes, price and maybe more.
The ability to create that relationship and demonstrate value might determine your future success.
Michael Sansolo can be reached via email at firstname.lastname@example.org . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
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