Purplebricks, the online estate agent, was in the headlines last week for all the wrong reasons: shares nose-dived by 40%, revenue forecasts came in short of £35m and management resigned. But could this all have been avoided with the help of Big Data? The REalyst investigates.
The eighties and nineties saw the rise and domination of the high-street estate agent with little or no competition. Then, in the late nineties, a little tech company called Rightmove burst onto the scene and grabbed the property market with both hands.
They became the de factoplace for people to search for homes in the UK, and agents had to pay them to advertise stock or risk losing business altogether. Fast forward to 2012 and the rise of the PropTech scene that birthed online-only platforms designed to disrupt the market once again.
The following years saw a plethora of online estate agents tempt vendors and landlords to their platform with much lower fees than high-street competitors, which they were able to do thanks to low overheads. Some did reasonably well, while others quickly fell by the wayside.
But there was one that stood out head and shoulders above the rest. Purplebricks managed to gain serious traction with excellent marketing that was able to build brand awareness. Since its launch, the company have amassed £93.7 million in revenue.
With such impressive figures, recent newsof their shares falling by 40% comes as a shock to many. As does their initial revenue forecasts falling short by around £35m. But how did the online estate and letting agents find themselves in this situation? And was there any way to avoid such a scenario?
The Rise and Rise of Purplebricks
Founded in 2014, Purplebricks was the first company to provide an alternative to the traditional high street model. They offer vendors a fixed fee of £1,399 in London and £800 outside of the capital, rather than the traditional percentage model championed by high-street agents.