"AI is a Game-Changer, and We're Obsessed", says Zoopla COO Rich Hayes

In the final part of Online Marketplaces' exclusive interview with Zoopla CEO Charlie Bryant and COO Rich Hayes, we zoom out to industry problems, agent requests and the future of the company as a whole. Expect long chains, thin ice, AI, and the future...

Read part one here. Read part two here.

As a data-focused company with a strong mission of empowering consumers and agents alike, Zoopla is a great company to ask about industry problems and possible solutions.

The core context is that the UK is a very slow-moving market. Bryant outlines the specifics of the British market and how Zoopla needs to react to long-term tenures, where homeowners stay in one property longer than ever.

"The average occupancy period for a homeowner has doubled since the financial crisis. So people used to stay in their homes for 9-10 years and they're now staying in their homes for 18-20 years.

"Zoopla has a big part to play in helping agents identify future home movers, from those high intent '0-6 monthers' who will move imminently, to the 6-12 monthers, 1-3 years, 3-5 years and then the prospects who the agents should put away in the proverbial bottom drawer for the next five years."

A complication for British buyers and sellers is 'long chains on thin ice'—transactions take between 26 and 28 weeks, and nobody is on the hook until week 24.

In other words, your dream move could go swimmingly for months at a time only for a deal 50 miles away to break the chain for everyone.

All in all, a tough environment for low-margin deals (UK agents are lucky to earn over 2% and often as little as 1% commission for a transaction).

Add this to low-quality leads, and the marketplace becomes a high-risk, low-reward environment.

I asked Rich Hayes what the biggest or most common request from agents is. His answer was simple: quality over quantity.

"Time and time and time again, it is all about quality over quantity. Every time we send a low value lead, that takes time from the agent, time to process, time to contact—time is money for them, especially our smaller agents who run a very personal service and pride themselves on that service."

Any serious marketplace has to find a way to separate the wheat from the chaff. What can portals like Zoopla do to nurture those long-term relationships in the months (and sometimes years) between home moves?

Hayes says propensity modelling is one solution Zoopla is testing—a new term for me but easy enough to understand:

"We've been spending a lot of time looking at propensity modeling and really understanding how user behavior on site can ladder up to a greater understanding of their intent and their more and their likelihood to convert.

"For example, we take 40 'weight-carrying' data points and feed them into a machine learning model. The machine will tell us that consumers' likelihood to go on to do something of value. We spend a lot of time on understanding quality before we send inquiries to the agent. Meanwhile, we're looking to develop or move the score up as much as we possibly can."

This doesn't mean portals should go radio silent. In fact, a major opportunity presents itself: nurturing prospects through to conversion. Hayes says "Your message as an agent can and should evolve as a prospect's propensity score increases over time. We're looking to support agent in nailing that messaging for their consumers."

As for the consumers themselves, Zoopla has been piloting its 'Zoopla Plus'—a subscription service that would-be buyers and sellers can sign up for while they're active in the marketplaces. In return, they get access to data and insights that would otherwise stay hidden.

This product has already been successful in Sweden (Hemnet) and Germany (Scout24), with significant revenue and demand for consumer products. Zoopla has yet to monetise this service... but how is it performing, and how do you get it right?

"It's been a resounding success. We've had thousands of signups and consumers are sticking around for between 4-5 months on the Plus product.

"We're clearly developing a more informed consumer, a more motivated mover. People who consume that data are significantly more likely to go on to send a lead.

"We've been blown away by the value we're generating for the customer and the conversation now is about potentially offering as much of that data to consumers for free.

"We have a world-class product team, and then it's a lot of trial and error. You need to fail fast and get as much new, interesting stuff in front of the consumer as possible, then measure it and repackage it for the next trial. If the consumer doesn't value what we build, we dust ourselves off and go again."

This brings us to the inevitable topic: artificial intelligence. AI has taken over the industry's product output in the past 12 months, so how does Zoopla perceive AI?  "It's a game changer, and we're obsessed," says Hayes.

"There are obvious perks to helping consumers move. An AI concierge service is going to help hugely. Machine learning and recommended listings are becoming table stakes. We believe there will be meaningful changes in how consumers interact with portals through generative AI, especially when they are high-intent.

"It won't be about scrolling through listings, it will be about getting answers to questions like 'when should I move home?', 'why should I move home?' and 'what do I need to do get ready to move?'

"We believe there's a lot more innovation to come in the next 12 months. There's so much we can do to complement search when consumers are moving house. It's an issue that remains unsolved in the UK and if there's a better brand than Zoopla to solve it, I'd be flabbergasted. We're in an amazing position to use our core data-first approach to help movers move confidently."

I ask Charlie Bryant what the industry should spend more time talking about.

"I don't think we focus enough on on the overall economics for the end customer. We spend a lot of time as an industry focusing on ARPA, user exeperience and content coverage. We would learn a lot more if we spent more time thinking about the end of economics and the real pain points from our customers in terms of their business operations."

This begs the question, how would you solve this problem? Unsurprisingly, AI is part of the answer.

"We need to automate mundane tasks. When I talk to agents today, they say their negotiators are spending less than 50% of their time actually out there talking to home biyers and sellers. That figure should be closer to 75%.

"Despite what some may tell you, agency is still very much a face-to-face business. Buying a home is an individual, emotional choice and agents exist to help movers navigate that path. We should strip away as much as we can that isn't critical to nurturing a personal relationship with a customer—that's the job we're here to do.

Time is running short and Christmas drinks wait nearby. I have time for one more question: Charlie Bryant, what does Zoopla look like in five years?

"Oh, it's a good question! The first thing is that our customers and consumers will have real clarity on why they come to Zoopla. I don't think we've yet absolutely nailed that. Whether it's the apocryphal person in the pub, an agent on the street, or a developer, we want everyone who uses us to say 'I use Zoopla because...'. In five years, that will be ingrained into our brand.

"Number two, we will have really stepped up our game in how we use data to deliver consumer and customer experiences.

"Thirdly, we want people to want to love working with and for us. I've long said that I want Zoopla to be the place where everyone who works here loves being here, and those who aren't here want to be here and we attract the best people in the market. Maybe not one for your readers, but a big one for us."

A final, brief aside. One question I had planned on asking, but didn't have time to, concerned layoffs and restructuring at Houseful—hindsight is 20/20 given that Houseful announced a consultation period with team members in its software division (namely Alto and Jupix) just one week after our in-person interview.

Zoopla cut more than 90 jobs according to 2023's filings, while the departure of the long-serving Nikki Cole—who was already at Zoopla when I entered the industry circa 2015—marks the end of an era.

Zoopla told Online Marketplaces that its portal business will be unaffected, and shared the following quote from Riccardo Dawson, Chief Operating Officer of Software at Houseful:

"As we look to 2025, we are focused on driving further efficiencies in our software business and recalibrating certain roles in our organisation. These proposals, which do not impact our core products of Alto, Jupix, Expert Agent and CFP, were very much a last resort.

"We want to reassure our customers that no roles involved in the development, support, or delivery of these products are affected. Our goal is to ensure we continue delivering enhanced products and services at pace, maintaining the value our customers expect from these industry-leading platforms. We are fully committed to supporting our affected colleagues throughout this process."