Digital First Series: Digital Transformation of the Real Estate Industry
Since the mid nineties searching for a new home has not centered on newspaper listings or the window displays of real estate agencies; rather potential purchasers have focused their initial attention on information available online.
What exactly has this digital transformation of the residential real estate industry comprised? The process apparently involves two distinct steps: digitisation; and digitalisation. The former followed by the latter results in digital transformation.
Digitisation allows digitalisation but may not necessarily result in it. Where digitisation leads to digitalisation, that is when you have a digital transformation. Given that the main innovation of property portals was effectively (with a hefty price tag) putting agents’ window displays online and, therefore more immediately available, are they really the digital transformation that is going to tick with the Tik Tok generation?
The answer is obviously no: consumers are now used to algorithm-driven personalised advertising appearing alongside pretty much anything they look at online; a study conducted by Zoopla found that nearly 25% of purchasers do not use portals; and it is widely recognised amongst agents that portal fees are high and there are alternative methods of attracting customers.
So what are the alternatives? The options include agents’ websites, digital communications (including alerts), social media and apps. Of course, the common denominator with all of these is the lack of an obvious middleman. That fact, in and of itself, indicates that both agents and consumers can take control of the digitisation and shape the digitalisation in the manner they find most useful.
Purchasers of real estate are like any other purchaser these days – they like to research online. Knowing this, an agent can target purchasers through social media and digital communications so that the customer is then directed/attracted towards that agent’s website/app. Feeling empowered with the knowledge they have obtained, the purchaser can then make direct contact with the agent through their app or website. This direct ‘digital’ contact between agent and customer could perhaps mean that instead of there being conflicting definitions of digitalisation (referred to above) they, in fact, complement each other - the impact on business models is social interaction and it is being driven by purchasers.
The research of customers is the key to an agent’s ability to provide their customers with the experience they want. Traffic on an agent’s website, the information collected via their app and responses to their social media, provide a mine of information about what customers want which, in turn, helps agents attract both purchasers and sellers.
What does the customer expect, and meeting those expectations (aka customer service)
Agents must be ready to expect the unexpected. After the events of 2020 this should not come as much of a surprise to anyone. But let’s not forget that there are some very nifty innovations that may help agents cater for another 2020. For example, the inability to conduct viewings in person is not a problem with augmented reality (AR) and virtual reality (VR) that allow vulnerable, overseas or simply time-strapped customers to view properties from the comfort of their current home.
With a comprehensive grasp on technological innovations and well thought out online and social media presence, the unexpected (be it another 2020, although let’s hope not, or the tech-literate expectations of Generation Z) should not be a problem for agents. With the goldmine of data that is available, innovations such as AR and VR and customers contacting agents directly through their own website, an agent can tailor their replies to fit each customer’s expectations and provide the individualised service that most of us (probably unconsciously) expect and want.
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Real Conf. 2021 - Adopting a Digital-First Strategy
Exploring how property firms can harness the power of digital to grow reach, revenues and market share.