ON-DEMAND’ EXPECTATION FROM SA CONSUMERS CHALLENGES THE PROPERTY INDUSTRY
Estate agents and rental property managers that don’t adopt technology in their businesses will be replaced,” says Adriaan Grove from Entregral Technologies. Speaking at the PayProp PropTech event in Cape Town last week, Grove said that in 2018, the property industry will have to adapt to cater for the new ‘on demand’ environment. “Consumers are accustomed to services-on-demand. Services like Netflix, Uber, Airbnb, Takealot and many others are offering instant gratification to South African consumers. The expectation is that all services should adapt, irrespective of the industry,” says Grove.
Grove says that Airbnb has had a profound impact on the property industry in South Africa, and in most cases, estate agencies are using the ability to Airbnb a property as a selling point on marketing materials. “The time is right for the industry to be disrupted locally – it’s happening fast internationally.” He quotes online home selling platform OpenDoor – a platform that pioneered the new iBuyer model, as a good example of disruption in the United States. “OpenDoor is offering a platform that allows sellers to get an instant cash offer on their home, and choose their own closing date. It removes the uncertainty and stress around the price and selling time of your home.”
Grove lists 5 ways in which the industry is drastically changing:
Historically, listings have been kept in physical property files – a completely isolated view of the property in question. The agent was the primary data-keeper, and accessing the information was slow and cumbersome. In this new on-demand environment, listings are virtual, belonging to anyone who chooses to access the information. The listings are far more comprehensive – drawing data from many touch-points. The new role of the agent is that of ‘verifier’, confirming facts and taking questions where necessary.
If you think about the marketing of properties, you think immediately of the Saturday paper, which lists everything available to rent or buy. The consumer now demands that same information be available online. Where previously, a consumer might have looked to the Yellow Pages for estate agency details, that same consumer finds an estate agency via the search-engine optimisation (SEO) of that company’s website and listings. Social media reviews are rising in rank in popularity, and fast over-taking the traditional concept of word-of-mouth.
Louw Liebenberg, CEO of event hosts PayProp says that while many of the guidelines from Entegral might seem overwhelming, he urges professionals in the property environment to not be intimidated by the opportunities available to them in the technology space. “You don’t have to look into the development of a ‘bot’ for your website immediately, rather approach the ‘low hanging fruit’ first: look at how you could move your listings and marketing online – digital spend as opposed to traditional marketing.”
- The changing face of clients
Where once, a prospective buyer or tenant was willing to wait a required amount of time for a response – the ‘always-on’ consumer won’t sit back and wait patiently. This consumer requires a response almost immediately, on whichever platform he or she has chosen to contact you on – be it social media, your website, or via email. The consumer is far better informed than years gone by, and as such, the agent takes on the role of ‘validator’, as opposed to ‘valuator’.
- The nature of an estate agency
The traditional brick-and-mortar agency is being challenged by a new breed of virtual agencies operating online. These agencies use technology platforms to automate a lot of the admin processes to achieve higher productivity, resulting in the ability to offer lower or set fees. A good example would be Purple Bricks in the UK.
- The requirements from estate agents themselves
The barrier to entry for estate agents in South Africa will increase – agents will require a good understanding of digital marketing and the online environment to be able to navigate this fast-paced and different landscape.
“Previously portals that advertised properties on the market were used simply for lead generation i.e. assisting the agent to find possible tenants, which they would then transition to the offline world. In our new reality, these portals are far more integrated into the transaction, ultimately benefitting financially from the transaction,” says Grove.
In the US, portals like Redfin and Compass are pioneering the concept of technology-led real estate companies. The sites are using automated price valuation models using big data, which fulfils the consumers need to have an immediate response at any time of the day.
Grove says that agents in South Africa have the opportunity now to revisit their business models and integrate technologies that will not only help their business evolve, but also satisfy their current consumer base and attract a more technology-savvy audience in the future.