Watch for Coles and Woolworths to move into property portal industry: Robert Simeon

I have this strange fascination post-GFC in Australia as to where our businesses are headed and as to what will live and what will die (every business owner's concern).

One can rest assured that the dominant players will be all over the emerging online markets and will be closely scrutinising technology markets for clues to survival.

Having said that I see two major players emerging – Woolworths and Coles. Australia presently has two million small businesses registered, employing approximately five million people. As Fairfax Media's Adele Ferguson reported:

"In the past two years, the food and liquor discounting between Coles and Woolworths has never been as fierce or the cries from suppliers louder. Last year Coles estimated there had been price deflation of 2 per cent a year since the start of 2009, and matching competitor price cuts, which has saved consumers more than $2 billion a year."

Just look at the Coles and Woolworths move into the liquor industry and service stations. As David Purchase, executive director of the Victorian Automobile Chamber of Commerce, told Fairfax Media:

“From in excess of 22,000 service stations [in 1980] to less than 6,000 now, has the reduction in numbers and the reduction in competition done anything for the motorist, who certainly is not paying less for fuel, let alone the independent who is no longer in business?”

So let me make a prediction – I can see Coles and Woolworths entering the Australian property portal industry currently controlled by Real Estate and Domain. Their portals would be free to the property advertisers with consumers eyeballs being mesmerised by shopping dockets, cheaper alcohol offerings and cheaper petrol prices. Previously only the mortgage markets have dominated third-party advertising on property portals.

Homes (for sale or rent) = lifestyle = household expenditure = savings. Australia is one of the only markets worldwide where property portals charge home owners to advertise their homes online – I see this changing.

Business since the GFC is all about seeking and exploring new profit streams with a stronger than ever concentration on entering online markets in search for the new “rivers of gold.” Watch for Woolworths and Coles to start rolling out online models with real estate being the perfect fit.

That’s food for thought?

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.