The UK’s largest high street agent, Countrywide, is drawing up plans for an online agency model.
What sounds highly likely to be a new Countrywide brand will take on the likes of Purplebricks, easyProperty and eMoov.
CEO Alison Platt, who joined the business last September, told Eye yesterday: “There is space for an online offering – yes of course there is – and we will have to play in that space.
“We might well have a Countrywide online agency brand, and we are very close to taking to our board the investment that will be required.”
Platt said she was open-minded as to whether the venture would be by acquisition or launched by Countrywide itself.
In a full and wide-ranging interview with Eye, Platt – whose previous job was managing director of international developing markets with BUPA – said that having had no previous experience of the property market was not a hindrance.
“I bring fresh eyes to it,” she said.
She also said that her main goal with Countrywide was to make it “seriously respected”.
She said: “This will pay huge dividends, because we have to pay attention to the fact that this is not a hugely respected sector.”
Platt also talked of Countrywide’s plans for more acquisitions, particularly in the private rented sector, but also targeting London where, she said, Countrywide had not been assertive enough.
She said: “We recently acquired Greene & Co, and you can expect to see more in that space.”
The full-length interview is immediately below.
I said just a couple of weeks ago I saw this coming. What ever you think of countrywide this is bad news in general for traditional agency. What they are saying is this is the start of them winding up their 1300 branch’s. It will not happen over night but over the next 5 – 10 years as they see agency moving online. Very worrying.
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Don’t be worried!! You simply offer an “online only” package when the time is right. (I would certainly have one up your sleeve now).
My opinion is; at the end of the day “sellers” will always (mostly) turn to High Street for advice, even if they do not plan to use us; So we should always have a route to a Face2Face meeting. With this and in theory we should simply become more skilled in knowing what this person may want ie Online or Traditional or more so Cheaper Fees.
Q: Would you use your local market leader on a cheaper “Online Only Deal” offering everything the “Online Only Agent” does BUT knowing you can actually walk in an office if things are not going well or the “Online Only Company” (all things being equal, which they never will as we have the office #ournotsosecretweapon).
At the very least all you need to do is recognise the point in time when you actually advertise your two service levels. (Now, 5 Years, 10 Years)
You will always have the upper hand and can simply say if things do not work out on our “Online Only Deal” you can swap to the traditional model and we will refund your upfront cost on completion…. giving good reason for them to always consider swapping back – The Online Only Model cannot do this as they have no office to swap back to.
Vendors choosing Online Only are not actually choosing the Company they use in my opinion, more so the ability to save money! So just adapt and remember this is all surrounding an easy market! As things change and house sales slow, prices drop sellers will need expertise as standard.
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This is no surprise to me, I’ve posted on here previously that is was only a matter of time before one of the major corporates launched an online model. What most agents don’t get is that the real battleground or game changer is not about RM and Z v OTM, or serviced office or bedroom agent v the high street agent … it’s about perception and fees. The only reason why online agents have such a small market share is not because Joe Public doesn’t want the service … it’s because very few know about it or understand it. Purplebricks TV advertising is just the start of what will be an ever increasing marketing campaign from various OL players intent on establishing a volume business. This will lead to greater public awareness and bring increasing focus on the size of traditional agents fees. Any agent who blithely thinks that 98% of sellers will continue happily to pay high street fees to get ‘a personal local service’ once they ‘get the idea’ of online estate agency is in for very rude awakening. I’ve predicted before that OL will take a 20% market share within 5 years and grow further from there. Countrywide entering the market is the start of the game change.
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“It’s about perception and fees”……..Only for the Online agents!!!
If the selling public were highly motivated by “perception and fees” then the Online Models would boast more than 2-4% of the market after 10-12 years of pushing their brands!
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Don’t misunderstand that the gathering pace of OEA is about cheap fees and no frills. To think so is to totally misinterpret what the sector is doing. This is about delivering a fundamentally rejigged estate agency offering based on a combination of technology, exceptional customer service and fairer costs. That’s why the likes of Countrywide realise that change is afoot and they have to be part of that understanding to survive. The mistake they may make however is to try to roll out an online offering themselves. Just ask Paul Smith how such things work out for incumbents that try to do so….
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Oh Russell, lets be honest about it, every High Street Agent can compete with Online Only Models “overnight” when and if required with the benefit of adding we offer more than any “online only agent” will ever offer! AN OFFICE to come in to and chat.
You harp on about “fairer costs and exceptional service” as if the leading agents have fluked their way to success.
My online only model is here and waiting and available to anyone who wants it – it is named “Fee Match” you get our usual service which has served us well for 25 years as a small family run market leading agency.
If we are gunna go down, I will be standing on top of you to be the last person with my head above water.
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Ric, granted you can match the fees of OEA’s. But your profits won’t match previous years that’s for sure.
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” based on a combination of technology, exceptional customer service and fairer costs. ”
“Platt said she was open-minded as to whether the venture would be by acquisition …”
No link there, then.
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Russell may as well have put a For Sale board next to his comment!!
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In my opinion Rusell would love to go back to traditional agency if he could. He was very successful and the profit margins he enjoyed are a lot higher than those with his existing outfit.
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Ric, it won’t be just about the cheapest fee although saving money will inevitably be a big motivator – how often do you fly scheduled BA instead of low cost airlines? My prediction is that big players like Countrywide, in addition to portal advertising, will develop sophisticated ways of advertising on social media ie., Facebook, Twitter, etc., add video tours, interactive floorplans and other aspects to a listing which will impress sellers and especially those who are digital savvy. Countrywide also have a huge advantage in not being a new unknown in a largely unknown market, their nationwide presence brings great credibility to a market which to some degree suffers from ‘if it looks too good to be true (for less than a grand), it can’t be true’.
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“Develop” Sophisticated ways of marketing? Please tell me you know you can do targeted marketing on Twitter and Facebook now and video tours and interactive floor plans are already out there….. The very fact that IF they have to develop this shows how far behind they are.
As for branding? erm…… if they roll this out with CW as the brand or their local brand names adapted slightly then OWN GOAL number 1. If they roll this out under a brand new name, then they are no bigger or better than: Tesco, Google, Facebook and dare I say even eMoov and PurpleBricks are well ahead of them. (My view.)
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I would like to know how their staff feel. The CEO has already said they need to improve moral and staff retention and in the next breath announce an online only offering. Basically saying we don’t want high street negs they are too expensive so we will keep you on until our online offering takes off and then make you redundant!
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Seems at odds with Countrywide’s continual acquisition programme. And sadly it will be a massive flag to the public that on line agents are safe to use if such a large national is entering that arena, and so give more traction to those who are already there. ON line agency will not work to satisfy the public. There are simply too many events and circumstances that someone has to deal with coordinate and sort for it to be successful But the public,seduced by spending less on a fee will give it a go. It won’t be until they are in a real mess with none to take control for them, that they will realise it was far from a cheap option for them. Countrywide’s new boss should stop and take a long hard look at what she is planning. It has the makings of disaster for her company
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Look closer at their acquisition programme and you will see it is lettings led. They can open an office on any high street cheaply but buying an established agent with a large lettings book, the company pay for itself within a few years, the sales are just added profit. Lettings can easily be moved online or done from a regional/national call center which is the way countrywide are going more and more.
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This is very clever by Countrywide. It is not necessarily about gaining more business – it’s a defensive and reactionary strategy which is very smart business.
In the early noughties, movies started to become available for download online – Blockbuster had no strategy. They should have created Netflix for LoveFilm but didn’t. You see the same thing in records (HMV and Apple/Spotfiy) and the same will happen in gaming (Games Store etc).
In business, as in life, it’s not the biggest who survive, it is those who adapt best to change.
And whilst online will continue to grow, because a sizeable proportion of vendors are price lead – there is an even bigger proportion who are service led. So anybody who thinks that this is the beginning of the end for a high street agent is deluded.
Consumers are also risk averse. So they’d rather pay a traditional agent more on a no-sale, no-fee basis, than an upfront ‘cheap’ online agent fee, with no guarantee of success. Purple Bricks have recognised the upfront fee as a barrier, so say they have ‘no upfront fees to pay’, but the vendor has to pay a fee if the house does not sell after 10 months and they sign up to a credit/factoring facility on day 1 with Close Brothers.
Vendors are never more willing to vent their spleen if they’ve paid for a service and not received any benefit from it. In the era of Facebook, review sites etc, this could be the un doing of some online agents working this model.
But ultimately, all this is about is providing consumers with choice. Customers have been able to buy cars online for years and now sell them (webuyany etc) – These companies have built sizeable business, but car dealerships still continue.
It looks like we’ll have an interesting few years ahead.
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Glynn if you don’t think this is the beginning of the end you are deluded i am afraid.
Over the last 10 years Countrywide has reduced staff in branches to minimal numbers, they have got rid of secretaries, they have made countless middle management redundant and not replaced, Their premises teams are now negotiating rolling leases on buildings they occupy as opposed to long 10 or 20 year terms. They now have national call / admin centers, They have started an aggressive lettings led acquisition programme (regular income, that can be operated from anywhere in the country) They have now announced they are starting an online agency! – With all of the above i have mentioned you dont think this is the next phase in pulling out of the high street?
It will not happen overnight and they will always have a degree of high street (the premium offering) but dont be deluded and think this is not the begining of the largest estate agency in Europe coming off the high street.
Forget portals, this is the biggest threat to agency in 2015. We are slowly being dragged into becoming “Listers” not estate agents.
I encourage every high street agent to add 10 mins to your pitch on educating vendors on the difference to online agents to estate agents as they are doing a really good job hoodwinking the public its a like for like offering.
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This is quite unusual for me – because our model is based exactly on the Countrywide model you have outlined – But I’m arguing for traditional agents 🙂
We set our business up like your vision for Countrywide from day one ie. We have a centre operations centre (The Sheep Pen), and we have limited numbers of offices, but ‘personal agents’ operating as ‘listers’ based in local towns throughout the UK.
But what we are finding now is that our franchisees are starting to open up offices in increasing numbers.
I do agree that there will be a lot of rationalising. Consolidation is rife. So in 5-10 years, there will be fewer traditional high street agents and but they will still exist. Lots and lots of vendors and landlords like the re-assurance of a high street office and it creates brand awareness.
The big agencies are ultimately accountable to their shareholders, so will need to continue to grow by increasing existing revenues, or ultimately market share by acquisition. If their marketing cap on the stock exchange is 12 or 15 times their earnings, and they buy in small agents at 6-8 times their earnings, they’re instantly increasing the value of their business.
What will happen (it’s already happening with our franchisees) is that local ‘listers’ will move from traditional city centre plush offices, with high rents, rates, difficulty parking etc. to ring road business parks with easy parking etc. After all, a lister needs an administrator to upload photo’s enter descriptions, etc. and local staff need somewhere to work.
Call centre handling, accounts, progression work etc and the IT can all be handled centrally, meaning that the local office centre will be lean and low cost.
So I think going forwards you’ll see;
1) Consolidation expanding – over 20,000 agents! We don’t need that many. There will be fewer, bigger players
2) High Street agents contracting as a result
3) Some High Street Agents, particularly smaller independents, will fight the advance of technology by ‘partnering’ – Eg aligning their local branch with a umbrella network that act as their fulfilment centres for their operations. Eg ‘Bloggs and Co, part of the National Agency Co, network’. By partnering, you strip out lots of staffing, IT, accounts and get the economies of scale from a national partner, whist still retaining your local operation
The 3rd point I am very confident of because we’ve already had local agencies approach us and then merge into our existing franchise areas from independents who were struggling with the costs
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Possibly one of the most insightful comments in some time …
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It’s becoming clear that on-line agency is in it’s ascendency.mTo survive, let alone prosper, we ‘traditional’ agents must promote the communication we offer more effectively. A high level of effective communication from start to finish for even a fairly straightforward transaction is impossible to provide AND earn a living wage – for a cut price fee. Compliance with an ever increasing bundle of legislation must also be rigidly maintained and this is where an on-line agent may well come adrift any minute.
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No.
Remember, consumers don’t care about you earning a living wage. They hate estate agents. People start on the premise, ‘What’s in it for me’.
20,000 trying to fight alone will not work.
To survive you need to become part of a collective, co-operative or umbrella group. The costs of IT, 24/7, infrastructure etc etc are such that it is going to be increasingly difficult to fight against the ever increasing march of the bigger consolidated groups.
I used to be a lawyer and we went through all of this in the early 90’s. The smart ones created big local operations, or joined networks like ‘InjuryLawyers4u’ or Quality Solicitors – still retaining independence, but benefitting from the c0-operative network.
This would be a great unifying cause for an Agents Mutual type operation to take forward.
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Fair comment about consumers not caring too much about us but bigger is very often not better – tis in fact often a darn sight worse.
If small local operators communicate thoroughly and carefully they will continue to survive but they must obviously be aware of competing forces and, like the shark, keep moving.
At this critical time to stand the best chance of making headway, all an agents needs do is provide an exemplary standard of communication and presentation and love ’em or loathe ’em, stick with Rightmove.
The RM advice will no doubt stir up a Hornets nest but please note, I said at this critical time – they may be dumped in the future but nuts to do so right now.
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So the CEO with (by her own admission) no agency experience say they are looking at a online offering and suddenly the worlds going to end.
The article says more about the failings of countrywide’s own offices than it does ours. They cant cut in London and that has nothing to do with them losing market share to onliners. They are losing market share to better traditional agents.
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Its a very good point Wardy. Thinking about it, Countrywides’ service is more akin to an Online offering so why not save £millions on High Street branches and flog/cross flog everything online? What would they charge ?..£1000 is my guess.
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I cant imagine a firm like Countrywide can flog everything online, they are to reliant on financial services, they need their offices.
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This has been marginalised in recent years with focus more on the EA /Letting side. They also already have advisers working from a central point advising clients nationwide.
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Not sure that a lack of experience in estate agency is relevant. There’s a lot more to running a major corporation than having direct experience at the coalface – which is why top CEOs can easily move from one industry to another. As for the issues raised, I know an increasing number of “traditional” agents who are turning their backs on the high street. While it’s easy to be seduced by the number of people who still like to spend their Saturday afternoons gawping in shop windows, the fact is that plenty of people wanting to have a serious “face to face” with their agent are quite probably going to have to get in their cars and drive there anyway – so an expensive high street location with problematic parking, etc, etc is, I suspect, likely to become increasingly hard to justify.
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I think her experience is extremely relevant. With experience in the job maybe she’d be able to understand why they have such a high turnover of staff, why none of the re branding has worked and why after all these years small independents are wiping the floor with them on the high street.
If the brands like bairstows could be saved (which I don’t think they could) there are people who post on this very site who, I’m sure would do a better job than the old fashioned top brass that CW has now.
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I’m with Wardy. We’ve got a woman with no idea about agency it’s that simple.
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Such a chauvinistic short sighted comment Paul, because she is a woman with no agency experience she is not capable?
As others have pointed out CEO change industries all the time, i believe LSL is headed up by a CEO that was formally working at a pizza outlet.
As for being a woman what does that matter?!
As always Paul your comments are ill thought out and lack any real knowledge.
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She is a woman is she not, don’t make it into a sexist issue!
You said the other day that we won’t comment on each others posts, that’s fine by me. Now go away and mind your own business like a good little boy.
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“We’ve got a woman with no idea” Your words Paul you are the sexist. Would you have said it if it was a man.
Why dont you stop spouting out your nonsensical opinions Paul.
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“We’ve got a woman with no idea” …..”Your words Paul you are the sexist. Would you have said it if it was a man.”
Yes I would have done you idiot.
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Only one idiot, the one that thinks because you have not run a branch estate agency before you are unable to be head of a national floated company which diversify in many areas. Oh and has to point out she is a woman (what that has to do beats me!)
Well done idiot.
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“Oh and has to point out she is a woman”….That’s because she is..wait for it…a WOMAN. I was merely pointing out a fact there was no intention on my part whatsoever to make it a sexist issue it is only you that has managed to do that. Now go on tun along little boy.
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I wondered why Bairstows and alike didn’t appear to be investing locally in their branches and this is obviously why.
What I don’t understand is what is to be gained by “going online” when over 95% of the sellers still prefer traditional agency?
Lets say that the onlinies are right and that online is the service that customers will want in x amount of years……..Why change and massively slash your profits now…….why not wait and change your offerings if and when required?
That said, Countrywide will be a massive player and certainly prove a problem for the likes of PB and tepilo etc…….Remember who first backed Rightmove in the very beginning!!!!!!
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I wondered why Bairstows and alike didn’t appear to be investing locally in their branches and this is obviously why.
Weren’t Bairstows sold to Hunters by Countrywide a couple of years ago?
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I think that was just the franchised offices.
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Oh…..and if I were a Countrywide employee, I would seriously be looking at my options medium and long term.
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Having been one once many years ago I’m fairly sure they’re mostly looking at their SHORT term options!. If Ms Platt wants staff retention the ridiculous expectations of inexperienced managers and teams has to go.
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Will they make all buyers go into a branch to have their mortgage offer verified, so they can then charge well over the odd to arrange a mortgage?
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Buying up further high street EA (competitors) and then sending a clear message, your going online ? ‘ you might as well , tell your work force, to collect their P45s , rebrand your logo in purple, orange and black.
Huge mistake Alison ….. you will find alot of your key team leaving over coming months …..
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What to say about Countrywide?
Every time I see Toilet Roll I think of them.
Abysmal company….. almost everything in an estate agency company that I don’t like.
Countrywide Property Sales is an honest description as they are NOT Estate Agents!
Quirk & Co better line up and see if they receive The Humble Countrywide Shilling!….. says it all really…. too lazy a company to actually do the work and develop an online offering…. always the shortcut…. lazy CEO looking for easiest route, clearly knows her job as demonstrating the lazy fast buck route…. let’s just see…. in Scotland their brand is tired/tainted….. seems similar South of the Border….. aptly they live up to their name!
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More importantly!
TufLuv….. Quote of the Week?
That’s real news!
Deserved in full!
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With huge companies like CountryWide joining the sector, it puts faith in newly established online estate agents like CastleSmart.com
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