Thursday, February 9th, 2017
Although it’s only just begun, 2017 is already shaping up to be an eventful year. With Trump in the US and Brexit in the UK, “unpredictable” seems to be the watchword for the global market. In a sign of just how quickly things can change, one of Donald Trump’s first executive orders suspended Obama’s mortgage rate cut, increasing the borrowing costs for millions of first time homebuyers across the United States. Across the pond, Brexit looms large on the horizon and, for good or ill, its effects will be far-reaching. Adding to this uncertainty, innovative and disruptive technologies are giving rise to new business models and shaking up the markets.
One such example is the rise of online estate agencies like Purplebricks. Such web-based agencies seek to cater to the increasing demands of the modern consumer, who expects 24/7 availability and high levels of customer service. Their early success has increased pressure on traditional brick and mortar agencies and also led to the creation of “hybrid” agencies, which blend these new technologies with the familiarity of the local estate agent.
Hybrid estate agencies are an attempt to take full advantage of the technology available to an agent while still trading in what is becoming known as “relational capitalism.” Agencies that exist solely online would be referred to as “transactional capitalism”, a more anonymous, and therefore less personal, form of service. At the moment, online agencies are attempting to penetrate the market by offering lower prices, but as has been demonstrated before, once a new disruptor achieves their initial goal, those lower costs tend to rise. Uber, for example, has been known to raise their rates after becoming established in certain cities.
How long it will take for such a price convergence to occur in the real estate space is anyone’s guess. It will depend on several factors outside an estate agent’s control including the economic outlook and, as we have seen, politics. It is clear, however, that once parity is achieved, the successful agent will be the one who can create greater value for their customers, rather than simply offer a slightly lower rate. In fact, according to Accenture, a global research and strategy firm, 47% of UK consumers say they would pay higher prices if it ensured better service.
Such service can take many forms, but for the demanding consumer, it will continue to mean that they can get answers any time of day or night. One example of how technology can help brick and mortar shops achieve this is Rezi Screenz, which allows the display of interactive information in a shop window that can be accessed remotely even when the storefront is closed.
Connectivity and access to information are nothing new when it comes to technological innovation and most experts agree that the next great leaps will involve some form of augmented or virtual reality. Companies like IKEA are already using augmented reality apps to help customers visualise how certain pieces of furniture will look in their homes, turning their printed catalogue into a virtual showroom.
The process for generating such content is already becoming faster and easier. The Matterport Camera, for example, can create a 3D map of a building’s interior which can then be navigated on a computer as though the customer were playing a video game. Their website already touts its use for real estate and it’s not difficult to see how useful it could be. Combined with a virtual reality headset, or even a VR enabled phone, agents of the near future could send a potential customer a fully immersive 3D model that allows them to tour a place without even getting out of their chair.
The same Accenture Global Consumer Pulse Survey mentioned above also revealed that 71% of customers prefer dealing with a human being to digital channels when seeking advice. In the uncertain year ahead, it should be no surprise that first time buyers and sellers will seek out agents who give them personalised, face-to-face service. Those agencies whose business relies solely on the Internet may find that the speed and efficiency they offer is not what consumers are looking for at the moment.
The savvy estate agent will be the one who cultivates great relationships with their customers. In an article entitled “5 Customer Expectations You Must Meet Now”, research firm Customer Experience Insight found that most people do not find constant contact from a business to be a nuisance. It might feel pointless to send emails to customers that never seem to get opened, but not doing so creates the impression that a business doesn’t care, and in today’s market, there are plenty of others who will.
Personalised service is fast becoming the norm, and it seems every industry is trying to evolve to meet this demand. This is by no means limited to including a customer’s first name in the subject of an email blast. Even shoemakers like Nike now offer NIKEiD, which allows anyone with a computer the ability to design, create, and buy customised footwear with the click of just a few buttons.
Data will clearly drive the future of personalised service. Facebook and Google will remain the titans in this area, but smart businesses will have to learn how to focus their efforts on those customers most likely to respond and they will do this by being smart about their data gathering. Forms on a website that simply ask for information hardly ever achieve their objective. Offering discounts or eBooks in exchange for an email address get much higher responses, but the next level of consumer data gathering will have to be clever and nearly invisible.
This does not mean gathering data on a potential customer that they would prefer to not give away. Rather, this means an increase in tracking their activity on a company’s website, for example, to gain insight into what they actually want. For the estate agent, this ability could prove invaluable as it could alert them to a potential hot lead or let them know when similar properties become available. This is exactly the sort of thing that Rezi is designed to provide. Without requiring direct input from a potential customer, it can track their movements across a website and gather a whole host of useful information that an agent can then use to personalise their approach.
When most people think of automation, they picture something like a robot arm building a car. However, these days nearly any task can be automated and an entire economy is starting to come online created by interconnected APIs. It might not come as a shock that after searching for a ski holiday, ads for ski chalets start appearing in the margins of a web browser. Most people don’t give this a second thought, but those little actions are being done automatically by a web of machines all communicating with virtually no human input.
These Application Programming Interfaces (API) work behind the scenes to send personalised emails, offer relevant ad content, and even suggest other items a customer might want. Looking for a ski holiday? Decathlon is having a sale on ski wear! That level of highly targeted, very specific personalisation is only just beginning to take shape, and the near future will see the API economy grow exponentially as more businesses seek to take advantage of this technology to provide unprecedented customer service.
Much of the UK economy is going to be focused on the effects of the Brexit vote. Whether London will continue to be one of the world’s banking centers, for instance, remains to be seen. It is clear, however, that estate agents who can provide a steady hand to hold and guide buyers or sellers through the process will be able to weather any coming storms. Personalised service and automated responses can be invaluable in this effort.
Times change. Ironically, that never changes. But no matter what happens, people will always need homes. The estate agent that will flourish in the future will be the one best equipped to adapt and change with the times. In the coming year, that seems to mean highly personalised customer service being augmented and streamlined by automation. New disruptors will become commonplace and technology that was awe inspiring yesterday will be yawn inducing tomorrow, but a personal approach that puts the customer first will never go out of style.