Amazon-Realogy Partnership and Why It Matters
After seeing its stock plummet 85% over the past two years, Realogy, the largest residential real estate brokerage company in America, has partnered with Amazon, the largest online retailer in the world, in an effort to revitalize its sales and reestablish itself as the preeminent real estate industry giant.
What Is Realogy?
Realogy, which owns brands such as Coldwell Banker, Century 21, and Sotheby’s International Realty is America’s largest real estate and relocation services company. However, recently it has been struggling against tech firms that use algorithms to make instant home offers, such as Opendoor, Redfin, and Zillow. In fact, at the beginning of 2019, Realogy attributed its 9% downturn in revenue to competitive advantages these other companies gained in major markets. By partnering with Amazon, Realogy seeks to adapt its platform to an increasingly technologically-driven market.
Turning Point With TurnKey
On July 23, 2019, Realogy and Amazon announced the launch of TurnKey, a new homebuying program that simplifies the process of finding and settling into a new home. Through this program, which can be accessed on amazon.com/turnkey, prospective home buyers can submit their contact information and receive a call from a Realogy employee, who then matches them with an agent based on the size, price and location of the home they want to buy. If home buyers end up purchasing a home, they receive complimentary credit ranging from $1,000 to $5,000 for Amazon Home Services, which provides services, such as installing TVs and hanging up art, and products, including Amazon’s Ring doorbell security system.
TurnKey is now available in 15 major housing markets, including Tampa and Orlando.
Why It Matters
While this partnership might seem like the latest instance of Amazon upending yet another time-tested industry ― in this case real estate ― this affiliation is particularly interesting. Whereas the potential financial benefits for Realogy are obvious, TurnKey puts Amazon in an atypical position: aligning itself with an industry incumbent trying to take on newly dominant disrupters.
Of course, there is a method to the madness. As explained by Stuart Miller, executive chairman of Lennar, one of the nation’s largest homebuilders, “Amazon, Google, Apple, most of the technology-centric companies are starting to think about the home as a centerpiece for the way they think about the future of how their products work and how they interact with them.” In other words, Amazon envisions a future where, “Home automation is a point of attraction,” and the company’s newly formed partnership is a major step towards turning that vision into a reality.
From The Trenches,