Changing the Real Estate Market
October 27, 2017
Reports show that the global housing boom we’ve experienced in recent years is losing its momentum. Could this be the long-awaited opening for the real estate industry to join the rest of us in the digital age? The possibilities are definitely there.
One could argue that the industry has lulled in recent years, perhaps resting on the saying ‘If it ain't broke, don’t fix it’. But with a market losing momentum at a time when disruption is not just a buzzword but a real potential threat to all companies and industries, it’s about time that the real estate market starts evolving and acts proactively.
It may very well seem an overwhelming task for any one player in the real estate field to change the entire industry, but perhaps the bark is worse than the bite.
Why should real estate agents be bothered with innovation or disruption at all?
The negative development in the market is arguably an obvious incentive and furthermore the potential is there and ripe for the picking.
The financial crisis is out of sight and the real estate market has been booming globally – until now. According to Global Property Guide’s research, 26 of the global housing markets showed weaker momentum in Q2 2017. Even in the European market where house prices continue to skyrocket, the majority of markets showed a weaker momentum in Q2 2017(1).
If that doesn’t provide an incentive for the market to evolve and act proactively, perhaps this question can: Can an industry that has ignored its massive potential for better customer experiences and general changes for years really dodge disruption?
If you don’t shake things up yourself, there’s a chance your neighbour will, and who truly wants to stand unprepared on the spectating side when disruption hits?
So, let’s explore the possibilities.
Potential sources of disruption
The potential from a combination of an industry untouched by disruption and daring start-up mind-sets has not gone unnoticed by investors. In 2016, real estate tech start-ups received $2.6 billion in funding – 12 times as much as in 2012!(2) A good sign indeed.
While the funding and the will to disrupt seem present, it doesn’t seem that the general customer experience has benefitted from such investments, when browsing various real estate sites. There’s nothing there to show that we’re actually in the year 2017, not 2007 - and it’s not because the opportunities aren’t there.
Matterport and Rooomy are just some of the services that can revolutionize and significantly improve customer experience.
With the introduction of VR to the market, they enable clients to visit homes without having the time-consuming hassle of going there physically. And that’s just one of the technical possibilities - there are likely many others. Still, not many have seized this potential.
However, in Denmark, we have an example of disruption in the real estate market that resulted from smaller changes in not only customer experience, but also from structures in the market- proving that disruption may not require a reinvention of the wheel and that it is both possible and profitable.
Real life disruption in fairy-tale-land
Empty the (beer) bottle and fill it with lightning – a brewery succeeded in disrupting the Danish real estate market. Dissatisfied with the existing conditions as a client in the real estate market, Carlsberg decided to act.
When Carlsberg moved their brewing activities from their old grounds in Central Copenhagen in 2006, they decided to develop an entirely new neighbourhood on these grounds rather than just selling it all and thereby losing a great part of their legacy. Carlsberg Byen P/S was established in 2012 for the development of future adventures on the grounds. As they were literally ground-breaking with the construction of the new neighbourhood, the process of disruption was about to begin without them even knowing.
Carlsberg Byen P/S had no trouble finding an agent willing to sell the astonishing 3000+ units they were about to build. However, they started contemplating: what about the value of the initial contact with our clients? What about the invaluable data provided by potential and realized clients when they search for a home in Carlsberg Byen? What about the potential in establishing a seamless experience from browsing to living in Carlsberg Byen and subsequently becoming an actual ambassador for it?
Changing the structure
Together with Valtech, they put dollars on data and assessed the actual value of a hands-on relationship with potential and future homeowners. Needless to say, that was no easy task. Nevertheless, the answer was clear and so was the path forward. Carlsberg Byen became its own realtor and thus changed the structure in the market.
Unconfined to a large existing realtor framework, they seized the opportunity to continue down the path of doing things differently.
Changing the customer experience
When you’re looking for a home, you need to be able to imagine yourself living there. But how do you do that when the potential dream is in fact just a building site and looks more like a nightmare?
With the freedom to proceed however they liked, unbound by pre-existing platforms and frameworks, Carlsberg Byen truly chose to put customer experience in the front seat.
By using the Sitecore Experience Manager Platform, they had an engine and the flexibility to create actual experiences for their customers. Carlsberg Byen was able to show personalized content wrapped in an explorative design that not only makes it much easier for potential homeowners to imagine the neighbourhood, but provides them with an actual experience in itself.
In other words, Carlsberg Byen P/S provides an experience to their customers that’s more than 2017 worthy.
For more inspiration from our work with Carlsberg Byen P/S - get the full case description.
Keep the ball rolling
Hopefully, Carlsberg Byen P/S can be a beacon of light, showing the way for future disruptors. The ball has started rolling and maybe the rest of the Danish real estate market has been shaken enough to start the process of providing clients with 2017-worthy experiences.
Remember guys: Nothing ventured – nothing gained.