Did digital ambition cause Purple Bricks to crumble?

Second to the weather, the housing market dominates as a national talking point. Whether you own a house or are aspiring to get onto the property ladder it frequently brings a host of varying debate.

The estate agent market hadn’t really changed in terms of product and service offering to customers. The industry trudged along traditionally for many years with little adoption of technology and little consideration for the customer. The process of renting or buying a property has invariably meant endless phone calls or emails (in the hope the agent responds) with the aim to book in viewings and then quite often the estate agent cancelling or running late. And we’ve all been at those viewings where the estate agent knows nothing about the property. It all just makes you question the value of what exactly estate agents provide.

The sector has been crying out for a disruptor to turn the market on its head. Think back to the Ford Motor Company over 100 years ago who made the automobile available to the mass-market and totally revolutionised the transportation sector. We have now seen a similar marked shift in property and it certainly has caused quite a stir. With consumers using and relying on their phones as being an integral part of their day-to-day life it’s no surprise that the demand for responsive services, seamless interactions and products that meet customer needs was an opportunity that Purple Bricks jumped on. It seems so obvious now.

Digital disruptor Purple Bricks first hit the market in April 2014 promising to give customers transparency – and it worked. Rapidly they grew and grew; from 30 agents to national coverage in just months before floating on AIM just the following year raising £240 million. Without needing a high-street presence, those with costly bricks and mortar shops started to get nervous. easyProperty, a digital competitor to Purple Bricks quickly launched in 2015 and held a mock funeral for its high-street competitors which consisted of a 3-mile procession across central London with a horse and cart.

Consumers started to get more choice and the traditional players were forced to look at their business and customer service offerings whilst Purple Bricks launched in Australia, America and Canada.

Where digital has the power to break down global borders, growing into new geographical locations is still a challenge, particularly in a sector such as property where trends and economic factors vary so greatly. In Australia, Purple Bricks soon realised they had got its charging structure all wrong for the market. In the US, they had to quickly abandon their country-wide flat fee and vary it by location. Put simply, they just didn’t do their homework. They thought they could take the UK model and throw it into another country which was a grave error on their part. They got complacent and thought it would be easy. It is never easy to launch into a new marketplace and technology doesn’t mean you can become complacent.

Of course, credit where credit is due, in the UK they seized the opportunity to transform and evolve a sector. Others have done the same in other markets such as TransferWise and Monzo in the financial services sector and in the craft beer sector BrewDog have appeared to go from strength to strength.

These brands have uprooted traditional companies and certainly have challenged the status quo but the pace and scale at which they do it is often rapid and entrepreneurial sometimes without much consideration. Rapid and entrepreneurial certainly creates an environment for innovation to thrive but understanding the market, challenges and consumer needs of that market are crucial. Many have commented that it was Purple Bricks’ lack of strategic localisation of their business strategy which caused their downfall in Australia. 

Starbucks and many multi-nationals have failed to get a good share of the Australian market as Australians like and need a very strong local message and story which Purple Bricks massively failed to capture. Where it’s now very important to understand how people are using technology within their decision making, in all markets, personalised and tailored customer experiences are just as critical. Trying to deliver this from another time-zone is bound to fail and Purple Bricks thinking it would work with no adaptations or changes was foolish. Let’s hope they learn from their mistakes and can begin rebuilding what is still a game-changing business.