I have Zillow/Trulia/Move fatigue; how about you?
Sure, it is an exciting story, but enough already.
Let’s take a break, at least in this column today. Tomorrow is another day.
I included some stuff from the Realogy Investor Day PDF; you can see all of the slides here.
For me, it was interesting that the technology discussion gobbled up so much of the conversation with Wall Street analysts yesterday. Why? The subject is important, of course, but is it also because the hoopla over Zillow, Trulia and News Corp. may have overshadowed the very successful traditional companies like Realogy and Re/Max, and may make them seem a tad out of touch or threatened by the ZTN tech storm? I am not sure that Realogy’s investor relations gurus would agree with me, but that is my two cents from the cheap seats. But I don’t think [Realogy CEO Richard] Smith fears anyone, and he has navigated tougher waters than the portal waves.
So here are my curated highlights from yesterday:
The big picture: All boats are lifted, per Realogy CEO Richard Smith at the investor confab.
“Household formation is finally improving in 2014. The U.S. Census reported 1.6 million households formed for the year. If history repeats itself, and it will, 65 percent of those households will eventually become homeowners. This is the highest household formation number since 2005.”
It may be old-school, but the real estate franchise model still works.
Consider that “total revenue for Realogy in 2014 was $716 million, which includes 44 percent from domestic royalties paid by franchisees, 38 percent from royalties paid by NRT, [and] 12 percent from marketing fund contributions paid by franchises and NRT.”
The ZipRealty secret sauce (Realogy bought Zip for $166 million).
The core Zip product, dubbed Zap, offers a machine-smart, automated way to measure leads. “Every client, every day, that’s on Zap is scored by an algorithm, 1 percent to 99 percent, that predicts the propensity of that consumer to transact in a real estate trade in the next 90 days to 120 days. This score is developed from a monitoring that we do of every interaction that the consumer has with that Web, mobile Web, email, text message and other communications that we have going out to those consumers. And that predicting means we are triaging agents’ time and allowing agents to be effective and productive in their business,” said Zip CEO Lanny Baker.
Then a little bit of hubris:
“I think by 2017 that the Zip platform will be the single most widely used technology platform in the brokerage industry, full stop,” said Baker.
And what about the NRT consumer portal?
“In 2015, NRT will complete the rollout of its own consumer-focused real estate website, homesforsale.com. At this point, we have approximately 50 percent of our metros currently rolled out on the site. This website will have features outside of the traditional brokerage real estate website and will generate leads from a different type of consumer audience,” said Bruce Zipf, CEO of NRT.
But … I am confused; it sounds like centralizing tech under Zip is still challenged by fragmented initiatives across the organization.
“To better manage this increased lead flow, NRT has rolled out our own in-touch platform, which is a comprehensive contact relationship management system fully integrated with our company’s websites and our agents’ websites and connects with NRT’s online marketing and communication platforms. This fully integrated platform provides for real-time communication and we’ll connect better our agents and our buyers and sellers, and will lend itself to better lead conversion.”
Isn’t that what Zip does? Whatever; the more technology, the merrier, in my book.
Now back to Zillow, Trulia and Move. Did you hear that Zillow is …?