More than a decade past launch, Zillow and Redfin continue reinventing their real estate brands.
Seattle’s two biggest digital real estate brands—online brokerage Redfin and media and services brand Zillow—boldly ruffled feathers when they each launched more than 12 years ago. Zillow’s free, public home valuations empowered consumers, but led to complaints and attempted lawsuits as to the figures’ accuracy, and Redfin’s CEO Glenn Kelman regularly spent time testifying to federal government agencies about how the traditional multiple listing service and traditional agent model stymied the consumer.
These days the two companies, both publicly traded and with large national footprints, are managing well-built reputations while gently pushing deeper into the real estate industry they set out to disrupt. And that has interesting implications for their brands.
Redfin came out guns blazing in 2005, asserting that its combination of salaried (versus commissioned) real estate agents and unique tech tools could not only help consumers find homes faster but also for less money since Redfin provides buyers with both tech-driven efficiencies and a commission rebate. The company eventually launched seller listing services for as little as 1 percent in many markets (less than the 2.5 percent to 3 percent fee sellers typically pay).
When Zillow launched in 2005, it helped consumers by lifting the lid off hard-to-find home valuations—“Zestimates,” in Zillow-speak—and it swiftly became a go-to resource for consumers researching home values, homes for sale, rentals, as well as a place to read up on real estate trends and shop for agents.
Eventually, home valuation data lost its cloak-and-dagger secrecy. And real estate brokerages traditional and not embraced the fact that real estate consumers want to transact more of their home purchase online.
Fast forward to the present, and Redfin is testing a program where it buys homes from sellers and then flips them. Early adopters—moneyed techies and urbanites—were among the first to buy and sell on the service. For its part, Zillow has evolved its resources, acquired a mortgage lender, is rolling out lease and rental payment tools, and is testing Zillow Offers, a program through which Zillow obtains homes for sale.
Building brands: From disruption to cruising altitude
Companies launched in Seattle are known for disrupting industry business models and leveraging technology to deliver new and improved consumer experiences. Think of Microsoft, Expedia, or Amazon, and of the city’s robust startup ecosystem—including numerous angel and venture networks and the University of Washington. They’re known for their bold missions, committed customer service and their solid branding.
“Generally speaking, Redfin and Zillow are outliers among the startups coming out of Seattle,” says John Cook, co-founder of the GeekWire blog, which covers the local tech, venture capital, and entrepreneurship scene. “Seattle is more of an enterprise software town.”
But one thing that makes these businesses Seattle through-and-through is their devotion to using technology as a platform to simplify the consumer experience. How the brands communicate their value has, necessarily, shifted.
“Redfin’s style was initially kind of swashbuckling,” Cook says. “Over time, that message has been curbed a bit.”
Adam Wiener, Redfin’s chief growth officer, says that the company’s mission is unchanged. While the company launched with a revolutionary way for consumers to engage with real estate, “consumers don’t sign up to join a revolution,” he says. “We’re here to reinvent the real estate industry in the consumer’s favor.”
By using technology to speed up access to open houses, manage offers and negotiation online, and by using its unusual agent compensation model, Redfin strives to make home shopping (and selling) more straightforward, faster and less expensive.
“We have to provide the consumer with a better and cheaper real estate experience,” Wiener says. “It’s not an ‘either/or,’ but an ‘and’ on both those fronts.”
Redfin consumers are attracted to the brand because of the potential to complete a real estate transaction rapidly and with less chaos.
“People don’t necessarily come for the refund,” he says. “They like us because of the speed. The refund is a way to end on a positive note.”
Redfin earlier this year told analysts that its goal is to deliver an all-digital transaction closing process offering, leveraging its brokerage, mortgage, and title services.
While Redfin works on developing its offering and audience, Zillow’s roots as a media brand have allowed it to cement strong customer brand recognition, which it is now leveraging as it rolls out additional service offerings to consumers. Zillow’s moves toward actually engaging in lending or transactions make sense, Cook says. While Zillow makes revenue from advertising by agents and brokerages, as well as adjacent service providers, “How much money can you wring out of that?” he asks.
Swinging full circle
Zillow’s recent commercials have played to the importance of home—whether that’s a rental or purchase—and to the many ways in which consumers struggle with the steps required to find and get into a house.