The real estate industry is facing its 'Kodak moment' and must embrace digital media or die
Take a snapshot (pun intended) of your business today – now think five years ahead and consider the very real possibility that more than half of small businesses will cease to exist as we know them today.
Five years ago in Virtual Realty News I predicted that David Jones and Myer would struggle to exist in 10 years’ time. The online tsunami has now ventured into fever pitch and it’s only going to get worse for the non-believers. Keep joining the dots and you will eventually join the chorus.
Online shopping is cheaper for consumers but much more expensive for the businesses marketing products because they now have to roll out state-of-the-art online platforms. Economy is better off with digital disruption– “Instead, they show how established businesses facing huge technological change can get in all sorts of traps – thanks to something known as the 'innovators' dilemma'. The idea was developed in the 1990s by an American business guru, Clayton Christensen. In a nutshell, it explains why large companies often struggle to deal with revolutionary changes in technology.”
The simple reason is that in their ignorance, they just don’t understand.
“It goes a long way to understanding why so many companies at the sharp end of the digital revolution – media and retail in particular – are going through such upheavals. It’s also a lot more helpful than much of the public discussion of companies’ handling of technological change, which often falls into one of two categories. On the one hand, companies that innovate successfully are often surrounded by a type of mythology, with much of the credit going to an ambitious or brilliant chief executive.
"The popular tale of Apple’s late boss, Steve Jobs, seems to fit this mould. At the other end of the spectrum, there are the stories of the stubborn failure to change. When Kodak filed for bankruptcy this year, for instance, the narrative was that it refused to embrace digital cameras until it was too late.”
The real estate industry is now facing that “Kodak moment” – where I believe at least a third of agencies in Australia will be forced to close. How? Key Fairfax publications ‘digital only’ by 2019: analysts Commonwealth Bank of Australia analysts said in a report that, while some will cut sooner, titles including The Sydney Morning Herald, The Age and The Canberra Times will be “digital only” by 2019.
I believe this will happen much sooner given the huge debt that Fairfax Media is carrying. Which explains why the rumour mill is now running amok – Fairfax: The Age is not for sale.
Real estate agencies have been judged by their print presence so what happens when this presence no longer exists? It’s very simple: they will be judged by their online presence, although those eyeballs were driven to their websites thanks to print media combined with online email alerts.
Real estate businesses have been totally dependent on print advertising (vendor paid) to promote their businesses – now the onus will be on the respective agencies to entice new business through their online models.
It has been a long time coming given Richardson & Wrench Mosman/Neutral Bay (RWM) was the first single agency to send out an email alert back in September 2000 and the only Australian agency to post over $1 billion in database sales.
We, like many other real estate agencies, are working on that new online model, which will cost six figures and upwards. The survival stakes for avoiding that “Kodak moment” within the real estate industry is set to sky rocket!
All I can say is, watch this space. I have been waiting impatiently for over a decade for this moment to arrive, when real estate agencies will have to completely re-think their marketing strategies. A case of do or die.
IT and video production will be the star performers over the next five years, as will the .tv websites, all of which RWM will be rolling out over the next six months (otherwise known as life after print advertising).
The next phase of real estate advertising will see the agents paying for it – not the vendors. The leading real estate agencies will offset these costs from third-party local advertising.
Robert Simeon is a director of Richardson Wrench Mosman and Neutral Bay and has been selling residential real estate in Sydney since 1985. He has also been writing real estate blog Virtual Realty News since 2000. The RWM real estate model has sold in excess of $1 billion in database sales globally.