- Zillow has become the face of real estate to consumers, its competitors and regulators.
- Through its actions, each of these groups has “voted in” Zillow as the face of real estate regardless of their statements.
- Zillow solidified its place in the market with hard work and innovation, while the lethargy and inept positioning of the industry incumbents did nothing to stop it.
In a very crowded and confusing marketplace, defining who you are and what you represent to your customers has to be summed up with a single thought — by them, not you. This is your “position” in the marketplace.
The way you outwardly portray yourself is your image, and how the market perceives you through your actions is your identity. The congruency or disparity between these two makes or breaks you in a competitive environment.
In light of Zillow’s recent “USDA seal of approval” from the Consumer Finance Protection Bureau (CFPB), let’s consider how consumers, competitors and regulators view it relative to market alternatives and compare its image against its identity in each case to understand how it became the face of real estate.
Zillow’s market share
Although statistics vary by research provider, consumers have apparently “voted” Zillow as the face of real estate based on its percentage of market share captured. Zillow Group commands 59 million unique monthly visitors (UMV). Of approximately 116 million UMV held by the top 10 portals in the real estate consumer category, Zillow Group holds 59 million or 51 percent of the market share.
As a note, the No. 3 portal in this study was Yahoo Homes! with 20 million UMV — and its homes for sale content is from Zillow, effectively increasing Zillow’s reach by 30 percent.
How did Zillow attain this prominence?
In the minds of homebuyers, Zillow is the place to “find your home” and perhaps the best broker. There’s great congruency between Zillow’s image portrayed and the market’s perception of its identity as demonstrated through overwhelming UMV capture rates.
Zillow exhibits tremendous focus on homebuyers in this year’s positioning strategy. It is building on its strengths and momentum, and this is fine. But in the background, the company is working toward fortifying its homeseller strategies, so also expect Zillow to position itself as the source for making sellers feel smart in this segment of the market.
In defiance of competitors’ complaints, the Zestimate has been a favorite toy of sellers and buyers starting a decade back. The first to market with an exceptional innovation that the marketplace openly adopts often holds a tremendous market advantage for decades, barring complacency or strategic error on its part.
As such, expect Zillow to continue refining its valuation algorithm and offering homesellers utilities beyond its AVM. This will further bolster its positive identity with homesellers.
While vitalizing its drive to capture an ever-increasing homeseller share of the market, Zillow Group also continues expanding its automated home search technologies for buyers and offering improved recommendation engines bordering on artificial intelligence. It is continuing a full sprint in this segment.
Zillow receives the “USDA Seal of Approval” from consumers as the face of real estate. Zillow will hold this position in perpetuity unless a competitor with a vastly superior AVM or home search tool can pull a finger or two off Zillow’s grip of the marketplace (No. 6, plus a bonus).
Who are Zillow’s competitors?
Essentially anyone vying for buyer and seller leads is a Zillow Group competitor. This includes the obvious contenders such as realtor.com and Homes.com and also every franchise and large regional brokerage –including all agents affiliated with them.
Zillow’s image is carefully positioned and focuses on the emotional rewards of the people purchasing a home. Whereas the National Association of Realtors’ (NAR) campaign, representing the image of Realtors and brokers in general, focuses on NAR and Realtors with some not-so-subtle scare tactics thrown in. Consumers might well see NAR’s positioning as the identity of Realtors, but it’s not the face of real estate they desire.
Although realtor.com’s advertising is humorous, it does not connect with homebuyers at the same subconscious emotional level as Zillow’s ads. It’s also not as singularly focused as Zillow’s it’s-about-you-living-your-dream position. Realtor.com has the additional disadvantage of being guilty by association with the self-inflicted NAR Realtor identity in the eyes of consumers.
The obligatory yearly images portrayed through the major franchises’ advertising campaigns presenting the “broker as hero,” “broker as hero,” “franchise as hero” or more “broker as hero” offer few options, which allows consumers to internalize the emotional benefits of achieving their dreams.
Individually, agents are spending ever-increasing portions of their commission on Zillow’s advertising fees to obtain leads. They might love or hate the situation, but with no franchise website offering the volume of leads these agents desire, they are forced by their own companies to become “Zillow brokers.” This portion of competitors votes with actions and money to uphold Zillow as the face of real estate.
And finally, in dimmed conference rooms, Zillow Group’s large-scale competitors grimace while signing backdoor deals for their agents’ advertising at the sites they hate because they reticently acknowledge Zillow’s identity as the face of real estate.
Where do regulators come in?
The CFPB’s partnership with Zillow reinforces Zillow’s identity with consumers as its advocate; why else would a consumer protection unit of “the government” otherwise associate with it? The CFPB has inadvertently, or perhaps deliberately, exhibited to the public its trust in Zillow and essentially given Zillow its “USDA Seal of Approval.”
And this outward display of government approval comes without the tens of millions of dollars NAR spends lobbying government representatives; this must be the difference between “paid” and “organic” results.
The CFPB not only recognizes Zillow’s identity as the face of real estate, but it’s also capitalizing on its identity with consumers. Why not NAR? Obviously, it is capable of shipping out lengthy questionnaires to consumers every year and must have a mailing list somewhere, right?
But could the CFPB, which is charged with cleaning up the real estate industry, protecting consumers and testing to see if new regulations are being followed, turn to a trade group — one previously charged with protectionist actions and harming competitive markets by another part of the government — for help?
The government “votes” through its actions in distinguishing Zillow as the face of real estate.
Zillow’s market position as the face of real estate came through a lot of hard work, taking risks no one in the industry ever has or will ever and by offering the marketplace innovations it would never have seen from the industry insiders.
Zillow’s identity as the face of real estate came about simultaneously through its own efforts and due to the lethargy and inept positioning of the industry incumbents.