Supply in consumer needs or follow BlackBerry
MAIN IMAGE: The Great Debate: Ilse French, founder of @ExponentialBlue, Adrian Goslett, CEO of RE/MAX of Southern Africa and Marcél du Toit, founder and CEO of Leadhome in a panel discussion led by 702 broadcaster Bongani Bingwa.
If you want to succeed as a real estate agent or agency in the technological age we live in, you have to understand how to fulfill the true needs of your ‘digital native’ customer for ease and immediacy.
The mobile phone has become the first port of call for millions of people worldwide – it’s where you go when you want to find out something, go somewhere or buy something. “The mobile phone is a game-changer. It has put the power of a super-computer in everyone’s pocket,” says Anwar Jappie of Google South Africa, one of the keynote speakers at last Friday’s inaugural Real Estate Industry Summit (REIS 2019), hosted by Private Property in partnership with Absa in the Sandton Conference Centre, Johannesburg.
Jappie says the technological advances of the mobile phone have also changed consumer needs. Friday’s conference brought the message home that the real estate industry needs to get on board to understand and supply in these needs or risk the chance that another sees the gap and steps in to address it.
- Watch ‘Getting Bang for your Buck’ by Anwar Jappie.
“Client expectations are changing, and technology enables new opportunities,” says Ilse French, an expert on the impact that technological advances are having on the real estate industry and founder of the consultancy firm @ExponentialBlue.
According to French not keeping up with changing expectations has already led to the disappearance of many companies in recent years. Just think of BlackBerry, BlockBuster Video and most recently the esteemed Thomas Cook travel agency.
“They forgot client expectations are changing and they didn’t innovate to meet the changing needs of the client. It’s not technology that’s killing business, it’s not understanding the true need of the client,” French says.
To use Airbnb as an example, French says it isn’t the online hospitality service that’s killing hotels, rather it’s because the latter wasn’t supplying in the clients’ needs for more options with regards to accommodation and pricing. Companies like Airbnb and Netflix are successful because they make the client the centre of their business model. While hotels were adding more rooms, Airbnb saw a gap in the market and they went for it.
Ilse French says the real estate industry has to understand how client expectations are changing. Source: PrivateProperty
- Watch ‘Be Prepared to be Different’ by Ilse French.
Where’s real estate in all this?
French says real estate need to understand that being better simply will not be good enough in future. “We need to make the future client our narrative,” she said.
What does our future (and in many cases current) client look like?
French calls them ‘digital natives’ – people who are accustomed to online expediency and for whom experience matters most. They want the following:
- Personal services
- Seamless integration
- Service on demand
- For everything to be effortless
Change is inevitable and so is innovation, says French. There isn’t time for the real estate industry to wait till a perfect solution is found – change is often messy. At present the real estate industry is still focused on offering a product and a service. What agencies and agents must do is put themselves in the shoes of their customers and start looking at the value they have today for their customers.
“The challenge for you is to find out who is your greatest opposition? It isn’t disruptors or technology. For you it maybe new ownership models,” French says.
What’s the answer? ‘Traditional’ agency or disruptor?
The challenge for the real estate industry will be to find a solution that will be the best fit going forward. Whether this solution will be closer to a franchise-based model or a set-fee model was the topic of a panel discussion between French, RE/MAX of Southern Africa’s CEO Adrian Goslett and Leadhome’s CEO Marcel du Toit.
- Watch the panel discussion ‘The Great Debate: Real Estate Models disrupting the Industry’.
All parties agreed that investing in technology is necessary and that the aim is not to replace the agent but to enable the agent to deliver a better service to the customer. They all foresee that there will be fewer estate agents in future but those that remain will have a different job description and make more money. Eventually it is all about the service that is delivered to the consumer and whether the service he receives fulfills his needs.
All business models will have to evolve to become more consumer-centric which raised the question on the future sustainability of the franchise-based model. Goslett says he would rather that the agents working for their franchise be entrepreneurial-minded rather than employee-minded. Du Toit says he doesn’t believe the franchise-based model will survive which is why his agents are independent contractors.
Goslett ended the debate saying he believes there is a place in the sun for all as long as the marketing is done in a manner that is fair, truthful and accurate.
This is a discussion that is set to continue. Perhaps for now it is best to end with the following remarks by French, she said “No model is future proof, all has to change and there isn’t necessarily only one solution”. You are welcome to share your thoughts on what is the best way for the real estate industry in South Africa on how to deal with the evolving demands of consumers who are increasingly tech-savvy. Send your comments to firstname.lastname@example.org.