As the market for online and hybrid agents evolves there will only be two to three major players left standing.
That’s the prediction from easyProperty boss Jon Cooke, who said he expects his firm to be one of them.
Cooke was expanding on comments he made at the NAEA Propertymark conference in London on Wednesday.
The easyProperty chief executive questioned whether some of his online competitors (who he did not name) could continue to afford the “astronomical” amounts of money they are spending to acquire new customers.
Commenting further to EYE yesterday, he said: “Property Industry Eye itself did a very good article saying £250m has been spent to gain 6% market share and the continuing growth of the online sector very much revolves around some of our competitors’ continuing marketing spend above the line, which creates a cost per acquisition which must challenge the future funding opportunities I would think.
“We are talking about existing players. I don’t think there will be any additional players coming in.
“Is it [their market share] going to end up being 6% or 10% or 20%?
“I think they very much depends on some deep pockets of one or two of our more mainstream competitors and I am not sure that they are going to continue to be able to draw down these funds but obviously that is my opinion.
“There will be two or three players as it washes out, and we will be one of them because we work with local estate agents.
“We have a very cost-effective licence that the agent buys for our technology and the brand and we support our licensees in a hyper-local strategy.”
He added that easyProperty’s own cost per acquisition was lower than its rivals, thanks to this “hyper-local” strategy, which he claimed sees 87% of leads coming in digitally and via the local, independent agents it works with.
At the conference, Cooke also asserted that a lower cost hybrid model reflected a change in consumers’ behaviour and the fact that they wanted to “transact on their own terms”.
He said: “What the change in the last few years has done is that it has empowered the consumer and there is more transparency about what is on offer.
“They are able to make a choice.
“At our price point for easyProperty you are pretty aware that you are going to have to do some of the work yourself – let’s be frank about it.
But responding to his comments, Martyn Baum, group residential manager of Arnold Keys in Norfolk, said: “I am not sure they do realise that.
“I have people come into my branches who are selling their property who don’t understand that there isn’t going to be any sales progression [with online agents] added into the service that they pay for.
“Unfortunately we end up stepping in to do that for them.”
* Separately, easyProperty is offering its service for free in Rugby, writes Marc Shoffman.
The offer started yesterday and will finish at the end of this month.
It includes easyProperty Rugby’s sales service, normally charged at £595, which includes Rightmove marketing, a For Sale board, professional photography, a viewing arrangement service, offer negotiation and sales progression.
Adam Day, head of operations at easyProperty, said: “This is all part of our hyper-local marketing strategy that is being delivered through our licensee network.
“All of our licensees have the flexibility to offer our sales service at a discount if they choose too.
“When traditional agents launch into a new area they will often offer their service for free to quickly establish themselves in that area – easyProperty Rugby is quite simply taking a similar approach offering our £595 sales service to vendors for free for the month of March.”