We have another entrant into the PropTech wars. No, it isn’t Amazon as many predicted. It is their furniture specific competitor Overstock.com. The press release that came out this week was comically press releasy. It “announced its entry into the real estate market with its launch of the newly-remodeled property management site, Houserie.” It then goes into vague braggadocio that it is “focused on using its advanced search technology to assist customers with real estate needs” and that it “will support landlords and tenants by providing a portal for renting, buying, and managing property, all in one place.”
The most important word in that last quote is “will.” They have grand plans for this renting portal but currently the Houserie site is basically just a place to screen tenants. As I am sure all of you are aware, every good (read: bad) press release needs to have a self-promotional quote by someone in the senior management. This one was provided by the senior vice president of strategy: “For nearly 20 years, Overstock has connected customers with premium home goods, helping them build their dream homes; now, we look forward to expanding those services in the real estate industry, […] We’re always finding ways to use our technology to help customers find just what they want for their homes. Adding real estate to the mix was a natural fit for our brand.”
Couple things. First, I am not sure if the twenty years of experience selling discount furniture will create cross-over appeal for the brand in the minds of consumers. Second, adding real estate does not seem like a natural fit for a brand that appears to be getting into everything from token trading to a lending marketplace. Plus, I find it at least a little strange that the real estate platform was not even mentioned in the last earnings call on May 8th, especially because they seem fine with announcing their plans before they have the system in place.
I might be wrong and this might be a brilliant play. Jeff Bezos was famously quoted as saying, “If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table.” This might be one of those opportunities. Overstock could be able to use its traffic and product recommendation tech to create a place where people will look for and manage rental properties. But, I think it is important to point out that, even though Overstock is a widely recognized name and a massively profitable company, it does not have a particularly strong brand connection or great site traffic.
I would say that at the moment, at least in America, the first name in residential real estate technology is Zillow. Besides a closer association to real estate, Zillow even has considerably more traffic than Overstock (185 million monthly visits to Overstock’s 30 million). Zillow also has a trove of data about regional properties and a well-known marketplace. All it would take is for them to focus a little more on the management side and they would easily be able to overshadow Overstock’s new offering.