Zillow’s business model is in providing homebuyers with extensive data and other information about properties they might be interested in purchasing. This includes data available publicly and proprietary one that before Zillow was available only to brokers and real estate agents through Multiple Listings Services (MLS). Currently, the value proposition of Zillow is its algorithm that calculates the estimated properly price based on a variety of characteristics that buyers would have difficulty assessing themselves. Additionally, across its different platforms, Zillow allows homeowners to post their homes and receive direct offers from potential buyers, request loan quotations, view remodeling contractors, and access information about agents and brokers. Thus, currently, Zillow is a comprehensive platform for individuals interested in buying, selling, or remodeling their house. The visitors receive full information about the houses in the area they are interested in, the prices, changes in prices, and different ratings that help them make a decision.
Unlike Redfin, Zillow focuses on empowering the buyers to choose and purchase a home independently, without being in contact with agents. Redfin’s main features include listings from MLS posted on the website, the ability to contact the website’s own agent, and a virtual room for discussing the paperwork involved in home purchasing. Hence, Redfin is more oriented toward ensuring that a potential buyer makes a purchase with the help of an agent, while Zillow only offers an advertising platform for agents. Zillow is more oriented toward providing information and allowing the consumer to choose independently, even if the choice is to use the services of an agent.
Arguably, the main differentiation point that Zillow offers is its estimated price calculations algorithm, which accounts for factors such as prices of similar homes in the neighborhood, the crime rates, and other important factors. Other websites, including Redfin, feature listing prices that were estimated by sellers and agents, which are less accurate and can be biased due to the agent’s interest in commission or their need to complete the transaction as quickly as possible. Hence, Zillow is more focused on providing information rather than ensuring that visitors purchase a house after visiting this website, unlike its competitors.
Since its establishment, Zillow’s goal was to empower and inform homebuyers, and therefore future innovation efforts should also focus on this. Some of the obvious innovations that could help improve Zillow’s Business Model considering the pandemic would be the virtual tours around the house. Technologies such as virtual reality and the ability to take 360 angle degree pictures support the ability to see all the features of a house without having to visit it.
Next, the company can proceed to help digitalize the process of buying and selling a house. For example, they could help facilitate online meetings between agents, buyers, and sellers to mitigate the need for calls and face-to-face encounters. Additionally, since Zillow profits from the advertisements placed by brokers and agents, it can work towards enhancing this section of the website. Similar to its services dedicated to requesting loan estimates and offers, Zillow can help buyers and sellers choose an agent in their area based on set characteristics and ratings. In this way, consumers who do want to receive guidance and help from an agent will be able to use the website’s data to do this.