It is impossible, as a citizen and a human being, to ignore the events currently unfolding in eastern Europe, as Russia wages what amounts to a war of conquest against the fledgling democracy of Ukraine. Apart from his own propaganda and few isolated echo chambers, Russian President Vladimir Putin is being widely condemned and isolated by business and political leaders across ideological lines, as the world bands together to levy brutal sanctions against him and those associated with Russia.
In times like this, every person who runs a business—no matter how big or how small—has decisions to make. With how deeply connected the world is today, no one can fully abdicate their participation in something like this crisis. What a real estate professional does or says—whether they are leading a multinational brand or a team of four agents in Des Moines, Iowa—matters.
“You build into your brand…the idea that it’s not just about the features that define the product,” says Americus Reed, a researcher focusing on branding and consumer behavior at the University of Pennsylvania’s Wharton School of Business. “It’s also about some kind of statement about the core values that the company, brand, product or service stands for.”
More and more people—particularly younger people—are making decisions about where they spend their money and where they get services based on core values and beliefs, Reed states, adding that the pandemic accelerated this trend as people “were forced to kind of pause and think about what is important.”
The invasion of Ukraine is somewhat unique in that people are inundated with images and reports of atrocities and tales of battlefield heroism every day, and the seriousness, speed and bold-faced nature of the invasion has left everyone who is even slightly paying attention either angry, frightened or likely both. It has become almost impossible for a business leader to stay silent or toe the line, Reed cautions.
“Once it gets framed as brutal ruthless dictator committing genocide and invading another country, it’s really hard, if not impossible, to not have something to say,” Reed says.
A spokesperson for Century 21 Real Estate, which opened its first brokerages in Moscow in 2007, said the company had chosen to withdraw from Russia as well, and that the company did not have any employees based in Russia.
Navigating to CENTURY 21’s English-language webpage for its Moscow brokerage displayed an error message as of Wednesday, though another Russian-language website showed hundreds of listings around the country under the CENTURY 21 brand, which the spokesperson said belonged to the independently owned “CENTURY 21 Russia” affiliate.
A spokesperson for Sotheby’s provided a statement saying it “made the decision to curtail our very limited Sotheby’s International Realty franchise business in Russia,” adding that the company “remains focused on supporting Ukrainians impacted by the tragic humanitarian crisis unfolding in the region,” specifically through a partnership with the Red Cross (something CENTURY 21 also participates in under the Realogy banner).
It was not clear if any other major multinational residential real estate brands were involved in Russia, though online searches did not turn up any results. Century 21 appeared to have the largest number of franchises in the country, with 78 independent franchises as of Q4 2021, according to the company’s spokesperson.
Marie Driscoll, managing director of Coresight Research, said on a recent Ukraine-focused webinar that consumers are not going to forget what they are seeing on social media—bombed-out hospitals and children huddled in shelters. She lauded companies for pulling out of Russia, particularly luxury brands that supported or were patronized by the oligarchs who are largely complicit in the war.
“I think…brands have responded as they should,” she said. “But then the impact on our collective psyche—what’s happening over there, do I feel like buying?”
Sentiment
Many people will certainly hesitate or delay their participation in markets during the chaos, she added. Speaking specifically about luxury, Driscoll predicted a global pull-back in the short term.
“Prices are being raised across the board, and now you have this ‘whamo’ effect of $100 oil perhaps, for three or four months, perhaps longer,” she said. “We choose to participate with brands when we’re comfortable.”
These people who are waiting on the sideline, though, are paying special attention to what companies are saying and doing during the crisis, she added.
“These are brands that we personify; we have relationships with them. In effect, these brands live in our brain matter. We choose to participate with them when we’re comfortable,” Driscoll said. “I don’t think people really feel like buying luxury—rather, we feel empathetic with luxury brands that are giving money to the Ukrainians.”
Greg Reed (no relation to Americus Reed) is associate director of the University of Wisconsin’s Graaskamp School of Real Estate. He told RISMedia earlier this month that the crisis was a “geopolitical wake-up call” and that consumers are going to have a “greater focus” on companies and products that prioritize domestic labor and production—both for practical and ethical reasons.
“Not necessarily nationalistic or patriotic,” he says. “Look at the disruption that happens.”
But on a more qualitative level, the ground-level sentiment regarding the war has been united and powerful—something Reed notes is relatively rare when it comes to recent crises and conflicts.
“This has been incredibly sad to witness,” he says, “but I’m amazed at how quickly the international community has coalesced…we didn’t see cohesiveness on the global pandemic.”
What exactly this might manifest as is unclear, but Reed says he expects business leaders and everyday buyers to move away from industries and companies that depend on autocratic nations to some degree. Extrapolating even further, Reed says the response to Ukraine might even be a chance for people and political leaders to come together on a basic level.
“Who knows, maybe there could be greater cooperation and interaction amongst countries, and God forbid, maybe that ripples down to human interactions as well,” he reflects.
Authenticity
Americus Reed says it isn’t just gargantuan global brands that consumers expect moral behavior from. A small, local or independent business—especially a very visible one like a real estate franchise or agent—is held almost to a higher standard and has more to both gain or lose depending on what they do in the face of the crisis.
“The smaller you are, the more positive it’s probably going to be—at least in this case for sure. Because a smaller company is taking on much more risk in making these stands,” he explains.
Consumers are fully aware that a small, local business or independent contractor is not facing political pressure, and likely isn’t relying on public relations experts to guide their decisions, Reed points out. They also have less wiggle-room as far as how much business they can afford to lose. That makes words and actions on a big issue like this much more authentic.
“It’s a bigger deal—you must really believe ,” he says. “Probably the people who look at that and share those aligned beliefs are probably going to give you even bigger praise.”
Conversely, the potential to alienate even a small segment of your prospective clients by saying the wrong thing or going too far is something businesspeople will have to keep in their calculus—though Reed argues in this case there are very few consumers of any demographic or political stripe that are defending Russia.
“I can’t imagine someone coming and saying, ‘Hey guys let’s pump the brakes, let’s not get ahead of our skis on Putin,’” he quips. “No one is saying that.”
Across the continent, real estate agents and companies both large and small have held fundraisers or collected supplies for Ukrainian defense forces and refugees.
The reason why this crisis has received so much broad support and media attention compared to war crimes and floods of refugees in Syria (with Russia at least partially responsible there as well) is multifaceted, according to Reed, and likely has to do with racism, European history and the specific circumstances on the ground.
Right now, from both big brands and small businesses, consumers are looking for unambiguous statements and action to back it up, Reed says. Hypocrisy is not tolerated, and even well-meaning support can alienate people, he warns.
“It seems more authentic when there is a clear line that’s being drawn,” he says. “Consumers can go look on the ‘Google machine’ and see exactly what you’ve been doing, and they’ll call you out…if you haven’t been doing this stuff consistent with this line in the sand that you drew, that is also inauthentic, and you’ll probably get called out about it.”
Maybe most importantly, in an environment of uncertainty that extends beyond economics, and has many people worried about the possibility of war or nuclear catastrophe, the average person is going to look more than ever for brands, businesses and services that they trust on a deeper, authentic level—something that started during the pandemic, but has become more evident over the last few weeks.
“People are just thinking, ‘Transactions are less important, relationships are much more important.’ What is my relationship with a company?” he asks. “And that will include asking and answering the question, what is this company about—what do they stand for?”
Editor’s Note: This story was updated to clarify that Russian listings are hosted on a website run by an independent CENTURY 21 affiliate and not on CENTURY 21’s website.
Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas, jwilliams@rismedia.com.
