So I bet you thought in a matter of seconds I would be blogging about the announcement this week that Amazon and Realogy were teaming up to do business in residential real estate.
Surprise! I waited.
Well enough of all that, here it is days afterwards and only now am I offering some thoughts - on what I called out years ago - was to be an inevitable move.
So why the delay in my response? Yes, there was a bit of method and oh yes, you would expect a touch of madness.
It was actually by design. I wanted to attend the Inman Connect conference and see what the industry thought about the move. To hear the buzz in the hallways and to listen to those on stage that had comment about what had the potential to be one of the biggest moves in the history of our industry. And so what did I hear from the industry this week in Vegas?
Crickets. At least that was in my impression. It may have been the least talked about public topic at the conference. Shocking, but true.
In contrast, I listened to Robert Reffkin while he bantered back and forth about Compass v. KW with Josh Team. We heard from the CEO of NRT how he was suing Compass for a myriad of reasons. I heard about the on-going growth of the iBuyer market. I was updated on the gazillions of dollars being invested in all things “prop-tech”. But you know what? I heard very, very little on-stage about Amazon and Realogy. And was I amazed? Not really, In fact, not at all. I had expected it. So why was this?
This conference might as well have been held in Egypt - because it and its attendees would have been so much more comfortable being closer to “denial."
Why would an industry that is so fixated on the dynamics "moving agents from one company to another and tech companies desperately trying to enable those agents to do more of the same old business" care about anything consumer-focused? After all, as I have stated ad nauseam, it is not the perceived job of "the industry" to work to jointly serve the consumer or to construct an ideal consumer experience, it is the job of 1.3 million agents to do that totally independent of each other.
Yes, I discovered quickly that I was at an industry conference designed to serve the needs of those “in the industry” and not for those who are now working “on the industry.”
With only a single exception. And it happened on the last day of the conference when most of the attendees had already packed and were sprinting to the airport. Introducing to the stage - the consumer.
And then out of no where, Inman put on the big stage a consumer. In my opinion that should have happened on day one, but at least it happened. A man who had recently closed a transaction with Opendoor and asked him what did he think about his iBuyer experience. You know what I mean, the type of institutional experience - not the buying and selling real estate part - the type of experience that I am confident Amazon will ultimately drive into this industry by purposeful agent selection.
For about 30 minutes, this man was interviewed and recounted his iBuyer experience in comparison to the experience presented to him by other traditional agents. And to make it even better, he was in the auto sales role professionally. And here is what he said:
didn't want the hassle or cost of fixing up the property
thought the upfront assessment of costs was clear and easy to understand
they stood by their word
thorough inspection of the property was great
easy, painless process
no open houses, signs or lock boxes
loved flexible moving day
validated the things they deducted to fix up the property were actually done for the buyer
He expressed a sincere dislike for all of what his agent friends in the industry had offered him. But do you know what he never mentioned? Having an issue paying a whole more in services fees for a much-improved consumer experience.
So think about this one. If you were Amazon sitting in that room yesterday, hearing this lone voice of the consumer, what would your takeaways have been? What would you have been thinking about your new relationship with the biggest franchisor and broker of traditional, random real estate participants in the Nation? The answer to that question is very, very clear to me.
To be clear. Amazon did NOT enter this industry to change the rules. Amazon entered this industry to change the entire game. Once and for all. And oh yes, did I say forever.
I think I know what they would think and it would go something like this. "Who cares about all of this noise? We are going to make a difference because we ARE NOT playing this game and never will. These people will never change - and as evidence to that fact - most of them weren't even at the conference!" Amazon is going to do something different and not unlike everything else we have done in ecommerce, that difference will create Amazon's dominance in the market.
So what do I think that look like now? Take a read of these brokerage industry business dynamics and then see what you think. Am I crazy or could you be in for the ride of your career?
Brace yourself, here we go:
Transactional Process Controls.
To be sure, I expect that Amazon is NOT in any way going to permit the use of a random transactional experience with their 200 million plus users. But this will need to be learned and they will learn this FAST because they will survey each and every Amazon customer on each and every transaction they complete. Now it might take them some time to figure that out, but in no way will they be selling zip codes to random Realogy agents. No way. Each transaction will be architected FOR THE CONSUMER and they will “fill” with only those brokers and agents that agree to use those processes. Think Cartus meets random resale brokerage,
Definitive Agent Selection
It is without question, that Amazon will fully vett and match the agents to meet the needs and desires of the consumer involved in the transaction. There is NO way they will allow agent that are either inexperienced or “misfitted” to enter into a relationship with a consumer. So that means that not unlike what has been done in relocation for decades, not all Realogy agents will get a bite at the "Amazonian apple.” Things like proven experience, multi-language capability, specialized geography, price range expertise and much more will now BE in play in matching specific agents to the very selective Amazon user. Think Opcity meets Amazon Prime.
Satisfaction Absolutely Guaranteed
With every reward comes its cost. Yes, there will be an immense amount of business that is generated by this relationship but the Realogy brokers should say good bye to “selective customer surveys” filtered by agents. Again, not unlike what is done now in the relocation industry, each and every party to each and every transaction will be fully vetted that results will be carefully applied to the reward of future business. And as for those that violate Amazon’s rules of engagement or do not provide service excellence, not unlike any Uber drivers that does so as an Uber driver today, you will be “shut off” and never be used again. Think OpenTable meets resale real estate.
Related Services Integration
This one may come as a surprise, but I do not think that Amazon will dive into the all too familiar mortgage, title and escrow pool of business. They are a behemoth company and the last thing they need would be a RESPA probe stuck into their real estate venture. Expect Amazon Home Services to inject consumer services that involve all of the things we as an industry leave on the table today because the agent refuses to allow you to tap “the SOI you are renting for a ridiculous commission split with limited access” to make the any such offers. In other words, all of the home services your agents and your company currently leaves on the table and then the consumer goes out and sources from someone else. And oh yes, mortgage, closing and title services et all will be added in over time.
Unparalleled Advertising Exposure
Amazon.com has over 2 billion shoppers a month today. Zillow Group has 180 million. Need I say more? In the near future, a new standard will be to have the listing on Amazon and Realogy will likely turn that into a competitive advantage to secure more listings. And, I am not convinced that this immense ad service will be made available to all brokers and agents outside or Realogy. But we’ll see. This is one of those dynamics that will either be never learned, or may even be realized over time. I can say this for sure, Unlike all of the other portals, Amazon is not concerned with placating the “highly charitable nature of the industry’s data sharing strategies", they are in this deal to make a successful business.
Non-conventional Consumer Offers
Amazon has built every aspect of its business on value. Creating unprecedented value with amazing offers - not made through a third party - but directly to the consumer. Unlike what is done today in the traditional brokerage industry, Amazon WILL be making offers related to real estate brokerage and home services DIRECTLY to the consumer. And, it has no ties or care if the agent of the brokers have an issue with doing so. It will be a condition of the engagement. Just like all those that participated in the recent Amazon Day sale. If you want to play you will need to pay. That is why I expect that eventually, the Amazon Prime members will have some sort of special offer and that in turn, all those at Realogy who want to play will need to participate in that offer. REalogy is already doing this with their subsidy and provision of the Amazon Smart Home tech. This will likely be later, but I think for what are very obvious reasons, this should be much sooner.
So there you go. Maybe interesting or maybe you will just dismiss this as "Ken has very obviously had too much coffee on a Saturday morning.” Whatever you think, What I thought flying home yesterday was this. I took specific notice of the lack of buzz about this deal at one of the industry’s biggest events. It shocked me that even if the reality amounts to a fraction of of what I have described above coming true what a different game we would all being playing in at that time.
Well so they’re here. Now let’s just see how smart there two entities are as they get ready to go out there and confront the constantly changing, demanding consumer. Because of all I can predict I do really know one thing.
Even if you’re the great, all-powerful and all-knowing Amazon, you only get one chance at a first impression.