Future of Bricks and Mortar
Bookstores seem to be the most visible example of how to reinvent a cold "don't handle the merchandise" retail institution... they added comfortable chairs and gourmet coffee shops to create well trafficked consumer destinations. Borders and Barnes & Noble have replaced libraries as hangouts. According to the Economist magazine, banks are now trying the same methods in order to offer consumers more than a merchant banking line:
A bookshop? A yoga studio? No: your local bank.
Can a similar transformation happen with a real estate brokerage office? Most offices seem officious and have no relationship with their clients beyond the introductory meetings (wow! what a nice office!) and the document signing. I rarely see real clients walk into these office, most of the visitors seem to be some sort of service provider.WALKING into one of Umpqua's many “stores” is a strange, if pleasurable, experience. There are plush chairs where you can sip free Umpqua-branded coffee, a shop peddling books and music, computer terminals to surf the internet and, often, a yoga class. The smiling employees—all trained by Ritz Carlton, a luxury hotel chain—drop a chocolate onto a silver tray with customer receipts. That Umpqua is a bank comes as a surprise. But a retail bank Umpqua is—small and fast growing, with 144 branches in western America, up from only five 12 years ago.
Umpqua's approach may seem whimsical but it was the result of careful study over a decade ago when Ray Davis, its chief executive, noted a shift in people's relationship with their bank. The cornerstone of local banking had been dealing with simple transactions—depositing cheques and helping customers. But the advent of ATMs and call centres was sucking activity out of the branch. “How do you keep the branch relevant when customers increasingly do not need to walk through its doors?” Mr Davis asked.
The question was prescient. Today, the popularity of internet banking means even fewer transactions are done at the counter. According to Celent, a consultancy, 40% of American households bank online, almost twice the proportion that did in 2002. TowerGroup, a research outfit, reckons that by 2010 most transactions will have migrated online.
First, the real estate brokerage office needs to shrink and save both on broker rent and agents' desk fee. Realogy's Chris Crocker introduced the streamlined Coldwell Banker Manhattan Beach office in this Feb 2007 video:
Second, if the brokerage office does have extra space after floor reduction, why not add books/music, free coffee, wifi connection, and yoga classes? Realtors frankly have far more incentive to create individual consumer relationships within their community than bankers. Brokers can sublet to or develop local partnerships with the ancillary retail services - coffee, yoga - that become a part of their "office as community center". I would certainly use this... free coffee with wifi? a no-brainer...
Technorati Tags: real estate brokerage, broker offices, bricks mortar, retail, bookstores, umpqua
Much kudos to Chris & CB. As a Realtor, I love this office model. However, I am more concerned with the commission structure than the office structure. I welcome this clicks and mortar model 100%. I also welcome a few yoga classes as well. A little shivasana after a long day showing properties is always good.
Reply to this
Any plans at your office, Pat?
Reply to this
Pardons everybody, the comments for this article were inadvertently deleted by this Quickblog application when the comment spam were deleted. (arggh)...
I've re-created them... thank you for your comments!
Reply to this
Ok, I'm ready to move, especially for the free coffee and wifi. And that close to the beach!!!
Reply to this
Yeah, but where's the Yoga!
Reply to this
Interesting idea, Pat....I am gonna have to chew on it a while. We are in the process of looking for new office space. This approach has merit, but you have to balance out the cost and ROI.
Reply to this
Great Post Pat! I love going to my local bookstores for these very reasons - to have a different, comfortable place to hang out, read, write, work on my computer. I think it's definitely possible for real estate brokerage offices to adapt to this model also. We are currently looking at our current locations and expansion in Las Vegas - something to consider...
Reply to this
If I were a broker (and I'm not), I'd seriously consider developing such community features in an office... I'm betting though that the changing of an office environment to an entertaining, inviting experience is just too out of the box for any broker to consider... look at how scary Web 2.0 is to adopt, this is Branch Office 2.0.
Reply to this
The a previous era (First Economic Wave) the real estate industry operated under what REALonomics has termed the four "Bs": Brokers, Boards, Books and Buildings! This was the Broker-Centric Era.
In the Second Economic Wave (circa 1994), we entered the "agent-centric" era, which drove up commissions, increased overhead and squeezed profitability out of brokerage firms.
We have now entered a Third Economic Wav, the Consumer-Centric Era, where the notions of impressive brokerage offices and agent ego-stars are being challenged by an all powerful consumer who has his/her/their hand(s) on the economic joystick of the industry.
Bricks-n-mortar operations have traditionally been the mainstay of vertical market development, i.e., we are in a city, we have a building, come here, buy and sell real estate, are not only morphing into new life forms, but also being canned all together.
Transparent models that are truly Web 2.0 enhanced will steadily move our tired business models away from retail styles to fluid horizontal business models operating in freedom markets, where consumers engage in peer-to-peer conversations with residents and agents.
The industry is currently like a bloated bureaucracy, lots of large, museum-like edifices that stand largely empty and represent the ancient models of incompetence, control and anti-consumerism.
Bring me a new model, one devoid of the impediments of confinement and I will bring you new found profitability for both agents and brokers.
Reply to this
With so much technology now so easily attainable it would seem that there could be, nay, should be, a proliferation of small mom and pop brokerages popping up all over the place. What can't a Realtor do with a laptop, printer and cell phone that a brokerage needs to do?
Instead, because it appears harder and harder to make a buck, smaller brokerages are being gobbled up by big national chains.
I love the idea of Brokerage/neighborhood drop in center. Not just an office building, but an integral part of a neighborhood, wow.
Reply to this
The free coffee and WiFi would certainly draw in people and give you a ton of foot traffic. Plus it would also raise your visibility and give you some free advertising (initially at first). I just wonder if the industry is already to stagnate to change.
Reply to this
At Inman this month, the mood seemed positive to radical change... almost like a big sigh of resignation to change.
Reply to this
Wow, very impressive. Hope my agents don't view that video. lol
Reply to this
Great post and video - precisely one of the reasons why we made the switch to Coldwell Banker Premier in Las Vegas. Years ago with our old brokerage we pretty much did Everything in our home office due to having better technology/resources then the Brokerage. Not so anymore and interestingly, we look forward going into the office and actually being able to seperate the home life from the work life.
Reply to this
I prefer Jay thompson's virtual real estate office business model. It works and you can still have the team concept without the overhead.
Reply to this
Robin, what exactly is Jay's model? Do you have a link to what his set-up is like. We are actually working on the same type model.
Reply to this
These bookstores have been accepted in the mainstream as a cool place to hang, randomly find new things to read, meet new people, etc. I just don't see this catching on with real estate offices. How often do people move anyway? Every 5-7 years? Not exactly enough reasons to make your favorite local brokerage a new hang spot.
I personally run a virtual outfit.
Reply to this