August 16, 2016
During my days at Microsoft, former market share minorities iPhone and iPad invaded the enterprise like a tsunami. Initially, corporate IT teams resisted Apple-tech due to the complexities of supporting multiple platforms and perceived security risks. With a huge Windows and Office install-base to protect, we wanted to believe the levy would hold indefinitely. Guess who won? Modern, tech-savvy professionals in all sectors began demanding work-life consistency resulting in new ergo-friendly workstations and flexible remote arrangements. All of which required support for their personal tech devices.
Consumerization has pervaded nearly every major sector of our global economy – tech, banking, healthcare, tourism, and retail to name a few. According to the Gartner IT glossary, consumerization is “the specific impact that consumer-originated technologies can have on enterprises.” If consumer-based devices, applications, and services can streamline and improve the workplace experience even in the slightest bit, that’s enough momentum to force change and rapid adoption. This is only for low-ticket consumer purchases, right? Wrong. According to a recent Forrester survey, 74% of business buyers conduct more than half of their research online before making an offline purchase. THAT is the power of consumerization on traditionally linear and lengthy purchase decisions. Concurrently, it places tremendous value on the accessibility of “product” information, reviews, and presentation.
If you can recall the days when you owned a home phone, personal cell, work cell, and desktop phone, you’re probably not a millennial. Regardless of your generation, just imagine trying to maintain four unique communication channels, contacts, and voicemail systems in today’s tech-enabled world. This is no different than the burden modern CRE brokers and marketing managers face as they manage a portfolio of properties, personal and professional brands, and associated marketing investments. The modern blend of work and personal lifestyles begs the need for fewer, intuitive tech platforms upon which to collaborate, market, and measure. Prior to the shift towards open data, there was less emphasis and value placed on data presentation – if the product isn’t on the “shelf”, who cares what the label looks like? Now the industry knows that when editorialized and distributed across search, web, and social channels, data is content.
Gartner notes that “consumerization can be embraced and it must be dealt with, but it cannot be stopped.” The commercial real estate industry is no exception, with emergent models like WeWork proactively altering the way tenants “consume” office space. Our industry has historically been underserved by data providers whose business models are based upon limited access and constricted data exchanges. I’m not suggesting that our extremely healthy industry will turn on a dime, but what millennial tenant or broker wants to adopt antiquated processes when information from every other facet of their lives already exists on their handheld devices?
Demand-side participants (tenants and investors) are naturally younger, more digitally-savvy, and have greater purchasing power than ever before. They require unfettered access to information and seamless experiences, which gated data can’t provide. These consumers, especially those in small and growing businesses, begin their searches independently. Until now, they experienced tremendous information and time gaps, which is unacceptable to today’s tenant who wants everything from stock prices, prescription refills, and television on-demand. We’re hearing the same from brokers – they don’t have time for bad leads and uninformed clients, let alone antiquated and faulty data systems. They want to service their clients with the time and accuracy they’re accustomed to operating.
There is a subtle fear that open data and information will disintermediate brokers from the CRE process. Nothing could be further from the truth! If so, financial planners, realtors, and hoteliers would already be extinct. Imagine beginning your home search with your realtor before considering your budget, target neighborhoods, future family size, preferred amenities, or commute. I suspect the process would be much more lengthy and frustrating for you and your realtor. The same will be true for future tenants and brokers, now both equipped with real-time and accurate information, and the digital means to discover and collaborate on ideal work locations.
What’s next for CRE?
1) Mobile-First and mobile-only in terms of web experiences, connections, and information gathering/sharing. Sites and information will no longer be designed in standard landscape format, text heavy and media starved. Information will be pervasive, filterable, and vocal search-friendly.
2) Interactive Content which fully editorializes static CRE listing information. Long gone are the days of heavy investments in building signs, open houses, and brochures. Information about firms, brokers, and properties must be interactive, bite-size, and natively social.
3) Virtual Experiences. Consumer applications and hardware such as VR/AR, drones, and beacons will add context and reality to what has primarily been experienced in 2D. You will not only be able to consume CRE data when and where you’re searching, but will also be able to connect directly with the brokers, the firm, and even the physical property on-demand
Consumerization is here and will continue to revolutionize the way business is done in CRE. Tenants, are your service providers leveraging the latest technology, collaboration, and communication channels to help you find your ideal space? Industry professionals, who will be your trusted partners in preparing for this change, and can you embrace it swiftly enough to accelerate your business?