Nordstrom, Dave Liniger, RE/MAX and Web 2.0

by Jeff Kempe

Realtor, Associate Broker

Author website

I’m just not a rah-rah guy. The most trouble I was ever in at Nordstrom – it almost got me fired – was my refusal, as a men’s shoe buyer in a suburban Portland mall store, to participate in an Anniversary Sale employee pep-rally-fashion-show, in which the men modeled the women’s apparel and the women modeled the men’s. When the store manager asked me why I wouldn’t want to be a team player, I told him shoe dogs – at 8.75% commission – tend to get much more excited by having enough of the right product to sell than my walking around in a dress; that would be my focus. I was saved by the increase.

So when I heard several weeks ago that Dave Liniger – Chairman and cofounder of RE/MAX International –would be in town for a three hour seminar, with the jingoistic “Be Great in 2008” title, my first thought was “Uh oh.” But I’d read the fabulous Everybody Wins, and think Dave Liniger’s brilliant; one has to be to go from nothing to building one of the most recognized brands in the world. So I and about a thousand others went.

He had me with the opening: “Don’t believe any crap NAR tells you.” That was followed by three hours of substantive (and riveting) advice on how to deal successfully in a real-world down market. I found myself every so often closing my eyes and thinking: he sounds exactly like Russell Shaw.

The number of mentions of Web 2.0 in that three hours: 0.

===

When I left Nordstrom in 1979, starting a 24 year career as a manufacturer’s rep, I drove four NW states, and called on two or three independent shoe stores in every small town. Nordstrom had a shoe buyer in every store; what sold in one didn’t necessarily sell in another only a few miles away. The focus was entirely on the right product, the one customers actually wanted to buy, and I made a good living planting seeds in a few stores, then expanding based on success. We had a four day trade show every six months in Seattle, and I’d stay busy from opening to close. Reps were paid typically 6%, and there were a number – I was never one of them – who made seven figures simply by being with the right company at the right time.

When I stopped four or five years ago, I travelled ten western states, expenses were through the roof, independent stores had virtually disappeared, Nordstrom had gone to regional buying, department stores were consolidating (and closing), and big box discounters were surging. The big volume manufacturers were bringing reps inside as $65k-and-a-car gofers, and taking the money saved to apply to markdown money and guaranteed margins for the retailers. With the same buyer, sitting in San Francisco, buying for stores in Beverly Hills, Dallas and Anchorage as well as San Francisco, guarantees were important. The right product became an afterthought.

Talk about disintermediation! And note it didn’t have anything to do with Web something-dot-something.

Things change!

But here’s another aspect: a few years before I left the business, a number of people were absolutely convinced that the internet was going to supplant brick and mortar shoe stores, this before Amazon had made a profit. But shoe buying is tactile: even now the majority of shoes sold over the net are ones people have already had three pair of, or those seen, felt and tried on in a real store. A few have managed success, but without brick and mortar, internet sales would be non-existent, and they remain a very small percentage of the whole.

But: They don’t always change the way we think they will.

===

I’m in a RE/MAX office with eighty or so other agents, average experience thirteen years. I can count on one hand the number I’ve met I don’t thoroughly respect; otherwise I’ve been lucky enough in my three plus year career to have seventy-five mentors. The office is consistently in the top ten of producing offices in the Portland Metro area, and RE/MAX equity group – 1000 agents – is responsible for about 15% of the area’s real estate volume, double any other broker.

At last count – yesterday – there were roughly: two of us who blog.

There are many things that need (as opposed to desire) to change in the business of real estate, some of which have to do with Web 2.0. Still, I think, the most important because it will cure so much else is the separating of buyer agent and listing agent commissions; in that case Web 2.0 is important only in that it’s the perfect vehicle by which to make the case.

But we get absorbed in our own worlds and think geek vernacular – ‘web 2.0’ – is important to any but a very small group. Everyone in the business I know now has email, has access to the online MLS, has a web site of some kind, can translate and send an EMA in PDF form, and advertises on CraigsList; if I asked any of them ‘Do you know anything about Web 1.0?’ they’d look at me like I was crazy. I think Jeff said earlier, this is something that’s going so seep into the business; no overnight revolution.

That’s not to say that it’s not important. I’m with Mike Farmer: it’s going to happen, but how is yet to be determined. We can talk, cajole, argue and theorize all we want, but it’s the market that will make the ultimate determination.

I do know this: If buying shoes is a tactile experience, buying a home is infinitely more so. Thus the chances of any but an infinitesimal few buying and selling real estate solely on the web, without having visited the property, would be on the order of:

0.