Which Real Estate Supermarket Are You?By JD Esajian on October 23, 2015
Which type of supermarket is your real estate business most like? How will that impact how much income you generate, how people see you, and what they expect?
In one community in Southwest Florida, there are at least five distinct supermarket brands operating within a few miles of each other, and probably more real estate companies. Supermarket choices include Publix, Fresh Market, Walmart, Costco, and Winn-Dixie. The names might be slightly different where you live, but the concepts remain the same. So if you are in real estate sales, which brand is your real estate service most like?
In comparison to other options, Publix is more like the Starbucks of the grocery world. Here you’ll find a nicer looking store and some better quality items, but you’ll pay far more for the same items than if you drove a couple miles to a Walmart. It’s for people that want to be seen shopping in a certain place, and not in the bargain basement. They are happy to pay a substantial premium for that, too. This is similar to a gated community from a real estate investor’s perspective. The houses might be identical, but some cost twice as much because they have pretty landscaping and a gate in the front.
The Fresh Market is a very much a more upscale shopping venue. You’ll find some of the same fruit and veggie basics, but you’ll also find specialty items, and far more healthy options. You shop here for what it can do for you, not for the price. You shop here because you prioritize your health, the experience, and because you want to look great when entertaining. This is like the luxury real estate market.
Walmart has an amazing business. It may not be a fun place to work, it may not have many healthy products, but it has a lot to offer, and it is cheap. This is your affordable housing. People shop here because they have to. Or at least because they want the best value. Price is most important to Walmart shoppers. They might not want anyone else knowing they are shopping here, but they sure feel smart for paying half the price.
Costco is your wholesale option. You might have to be on ‘the list’ to have the privilege of shopping here, but you can get super discounts. Real estate has wholesalers too. It’s the very same concept. Get on the buyers list and you can get access to steeply discounted real estate deals. They buy at incredible bargains and pass the savings on to you. They may not always have every product in every size all the time, but they do have deals.
Winn-Dixie appears to offer a Walmart level experience and product, or lower, at higher Publix prices. Some real estate companies and professionals can get away with offering less for more for a little while, but they may only attract the occasional shopper out of convenience, rather than choice. You’ll rarely hear your neighbors brag about shopping here. They won’t be shouting about the great bargain they got, or inviting you over to experience the awesomeness, but it works when you need something right then, and it’s right in front of you.
There’s no one right answer. All of these supermarket chains have seen pretty impressive revenues over the years. You might be able to make some predictions of where some of them will go in the near future, but there are always new disruptors, like Amazon’s grocery delivery service. What is really most important in real estate is that you choose your positioning well, focus on congruent marketing, and deliver on the promise. When expectations don’t line up with the product and experience, people get really unhappy, regardless of the price. It also pays to do your market research in advance, and figure out where there is room in the market for you. Is it as a wholesaler? The convenience option? Or the high end luxury and prestige option?