Purplebricks - Is it joining the establishment?...

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20 March 2021

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By Graham Norwood

Editor, EAT, LAT & LLT

OTHER FEATURES

Purplebricks - Is it joining the establishment?

Purplebricks is now part of the mainstream landscape of British estate agency. There - I said it.

An agency whose whispered name would previously provoke high blood pressure amongst traditional agents and barely-concealed jealousy amongst other online firms is now part of the industry furniture, in a good way.

From an interview I had this week with its new chief marketing officer, Ben Carter, that’s how he likes it.

While he doesn’t shy away from what he sees as the need to modernise the industry, which is still insufficiently digitised for his liking, he wants his new employers to become a team player.

He’s happy batting alongside established firms for the wider interests of the industry when required, while being competitive and distinctive when Purplebricks wants to stand away from the rest as a (you guessed it) disruptor.

I sat down with him a few days ago, virtually, and discussed Purplebricks’ plans for the future and his view of the firm’s image - and the industry’s - as a relative newcomer.

Here are eight key takeaways...

1. A switch of image: “We’ve previously been seen as price-led, but that’s no longer the case. We want to be thought of as a tech-led agency brand, that puts consumers in control of their sale - and the best agency doing that,” explains Carter, who until November was global director of restaurants and strategic partnerships at the Just Eat company.

2. What new tech?: If the ambition is to be tech-led, what has the agency got to say? Although the Purplebricks app is five years old this spring, it’s still seen as the key consumer-facing technology. “It’s the tool to open the way for more customers,” says Carter, who believes continual development of the app will improve the customer experience.

3. Fees: I believed Purplebricks had tested different options, disrupted by the pandemic, but came down in favour of no change. That’s not quite the case, however. Carter says fees aren’t his responsibility; however, he says different models are still being piloted and the company is considering how best to communicate them to sellers if they are adopted - expect more on this in the spring and summer.

4. Boomin: Surely the agency founded by Michael and Kenny Bruce will join the new portal set up by the very same brothers? Maybe - but not yet. “We’ve talked to them of course, and like every agency we’re considering which portals are best for us. But no firm decision so far,” says Carter.

5. Growth strategy: “The market share split now is seven per cent online/hybrid and 93 per cent high street. Being the biggest player in that seven per cent means we’re pretty large and busy, but as I see it, that’s 93 per cent opportunity for us to get more market share,” he says. But Carter does not repeat the old-school Purplebricks hyperbole about sweeping all before it. He is more than aware that high street agents have a permanent future and that digitisation may be more about how consumers control their lettings and sales listings than whether the agent is actually classified as ‘traditional’ or ‘online’.

6. Geography: With the foreign adventures now in the past, Purplebricks can concentrate on the UK - but no longer as a monolithic brand. “You’re going to see Purplebricks much more in local areas in future, we’re going to have more local visibility and a presence in the regional press, and we’re going to use the potential of online platforms to target local audiences as well,” says Carter. The day-to-day marketing will emphasise Purplebricks’ 700-plus LPEs in the field, and there’s going to be more promotion of those people with ‘street’ knowledge helping individual sellers and landlords who list.

7. More of an industry player: Although it got lost in the noise of ‘old style’ controversies over LPEs, fees and appearances on Watchdog, back in 2019 Purplebricks started a campaign against stamp duty, saying how the economy as a whole would be better off without it - at the time it forecast 130,000 more homes a year would come to the market if SDLT no longer existed. It returned to the issue in recent months, calling for the stamp duty holiday to be extended. “We were happy to work with other agents then, and it’ll happen again in future,” pledges Carter.

8. The future?: “We’ve got to walk the walk. We’ve talked the talk for some time and now we need to prove it,” he says - ‘it’ is what he refers to as “a clear and strong strategy” under chief executive Vic Darvey. “A greater digital transformation of the agency industry is inevitable - look at how, for example, hospitality has transformed and adapted during the pandemic. Agency has and will do that, and we’re leading it with our tech developments. We want that to be an opportunity to boost our market share.”

So, what’s not to like? The old Purplebricks swagger of the past appears to have gone and the competitiveness is more tempered, more focused, and less dismissive of rivals.

Will it still rock the boat? For sure. Will it still have detractors? Of course. And there’s undoubtedly going to be that long-term conundrum - how many homes does it actually sell?

In nitty gritty terms, instructions rose eight per cent in the six months to November last year, with interim profits ahead of previous expectations. As important to some, it at last seems comfortable in its own skin both in the market place and alongside other agencies.

And as for Commisery? You won’t be seeing that again…

*Editor of Estate Agent Today, Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn

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- Mark Walmsley
- 20 March 2021 11:48 AM
Great objective interview and article.

- Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders
- 20 March 2021 18:15 PM
Connells group £51.8M profit 2020. Purplebricks profit and loss since in last five years, 2016 £11.9M loss, 2017 £3.01M loss, 2018 £30.08M loss, 2019 £54.9M loss and in 2020 - up to 30th of April they lost £19.2M. In 2020 they had revenue of £111.1M but still made that £19.2M loss, so running cost was £130.3M - or a cash burn of £10.85M a month. It will be interesting to see if in the 2021 end of year accounts it is another negative figure. Also its revenue seems to be going backwards as in 2019 it generated £113.M and only £111.1M in year ending April 2020. If this stays static and it burns £20M a year more than it generates, how much runway has it left. Also will the Uber ruling have consequences with their self-employed model, as many argue the workforce are really employees, just without the benefits that a PAYE structure would allow. Lastly, if they pivot their model and go down the no-sale, no fee model, that is £18M of inward revenue a year that will be hard to swallow, as that is the typical figure that unsold listings generate. Employing a few traditional agents at the top of the purplebricks pyramid, does not change the model, employing 10,000 estate agents would. My advice - actually utilise some proptech, enhance client UX - supercharge the 'thin' sstc to completion journey - then there is a sustainable business, who knows it might actually make profit.

- Robert May
- 21 March 2021 07:14 AM
It is ridiculous to claim anyone is jealous of Purplebricks, what has caused raised blood pressure is the audacity of the claims it has made against what was achievable or ever likely.

Without investor cash Purplebricks has to become financially viable and make a profit, there is only one way to do that; provide a service that competes with it's competition.

Plonk it on the portals agency isn't new now, the public understand they have a 50/50 chance of selling, an evens chance they'll just be adding another fee and delay to their time on market before an estate agent sells their home for them.

With those who do sell achieving about 5% less than traditional methods achieve it is hard to see how all of that will be glossed over by 'La La I'm not listening to any of that actual, factual stuff' marketing.

There isn't any substance to this article that marketers like Stephen Jury and Chris Welch haven't said or tried in the past 8 years

- Chris Arnold
- 21 March 2021 08:16 AM
"seen as a tech-led agency brand that puts consumers in control of their sale". - is that what the vast majority of consumers want?
With so much information now online, it is exceptionally easy to dive in and drown.
The role of agency remains particularly varied and, with so much abundance of information, one goes from not knowing anything and needing someone to give it to you, to knowing too much and needing someone to make sense of it
People will always pay a higher price for something they perceive as necessary, but they won't pay a higher price if they, not the Agency, are "in control.".