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Purplebricks began to run into trouble in Australia when it struggled to make headway after the market peaked in mid-2017, but just because this company failed doesn’t mean the fixed-fee online model will do the same, one award-winning network CEO has warned.
Douglas Driscoll, CEO of Starr Partners, said that timing was a major part of Purplebricks’s undoing, but that, inevitably, someone will come along and do it better.
“Purplebricks had relative early success in the market, and the initial response was favourable with some consumers, with the company negotiating several high-profile sales,” Mr Driscoll told REB.
“Agents in Australia need to come to terms with the fact that some disrupters are here to stay. Rather than be dismissive as an industry, we should see this as a learning opportunity.
“You won’t hear me singing Ding-Dong! The Witch Is Dead about Purplebricks exiting the market. I find it distasteful that some seem to be celebrating the demise of a business, as many people will be losing their jobs.”
Improvement
Mr Driscoll said the Australian consumer appetite for these models might not be as strong as in other markets — such as the UK — but the industry needs to better demonstrate its value to consumers.
“If Purplebricks had launched two or three years earlier, they probably would have established more of a foothold, particularly as the market was more buoyant,” he said.
“We should constantly be looking to disrupt ourselves and strive for self-improvement.”
Mr Driscoll added he is seeing collective sense of schadenfreude at the news of Purplebricks’s Australian exit, but feels it should be seen as a wake-up call instead.
“For many Australians, buying or selling a home is the biggest transaction they will make. They tend to gravitate towards an agent who they feel they can trust, and generally speaking, consumers are satisfied with the current paradigm, but that’s not to say that they wouldn’t have their heads turned should another alternative model surface.”
Tough nut
Mr Driscoll said that Purplebricks probably underestimated how difficult it is to crack the Australian market.
“They tried to spread themselves too thinly too quickly,” he said.
“Their rate of geographic expansion in Australia was arguably too rapid, and as a result, the quality of execution suffered. If they had solely focused on one capital city first, and had tried to get a feel for that market before going to the rest of the country, they might have enjoyed greater success.”
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