Thursday, June 04, 2015

Explosion in real estate.

INNOVATION EXPLOSION... When will we see the Uber of real estate? Is there an industry disruption around the corner?

Technology and innovation is the hot topic in real estate at the moment with the proliferation of 'world first' innovations being declared. What we have learnt, over 30 years of investing in technology and innovation, (and with a team of four full time IT programmers in this space) is that no matter how exciting a new product looks, it must pass the most basic test... How will it add value to the stakeholders... Will it be embraced and valued... Is it simple to understand and to apply?

Technology is running at such a fast pace world wide, innovation epicentre Silicon Valley releases over 20 'game changing' innovations every week! Some have potential to disrupt traditional industries, yet positively impact consumers. A recent stand out example that has disrupted a traditional industry is Uber. Overnight global traction, while other innovations fail... all based on customer's reaction to its value. 

The real estate stampede to stake out 'first' turf in the technology playground is underway. No one yet knows where this will end, but a real estate Uber is sure to emerge. 

Real estate is already changing fast and the big questions on real estate agents' lips are... What type of agent is likely to prevail? How will a real estate agent look in 2020? 

In the meantime, the question on consumers' lips is who is going to make real estate moves easier, cheaper and less stressful? I seriously doubt many consumers would be too concerned whether real estate agents survive, providing their selling buying or renting experience continues to improve. Just like supporters of Uber feel about the traditional Taxi industry, clearly consumers are supporting it. 

Perhaps looking into real estate's recent innovations will provide some clues? Let's take a look at a couple of these recent innovations. 

Let's take the immersive imaging! This TOP SECRET product, launched in May, was presented to Gen (Genevieve Toop) by a MAJOR online portal. Gen was expecting something really incredible, and so excited to be receiving her exclusive pre-release briefing...

Rewind 6 months. It was around Christmas last year, a couple of young entrepreneur lads from the country presented to Gen and I their breakthrough real estate marketing. It was also top secret. So Matt (who heads up HOOT&TOOT, our IT
and marketing division) and his team took a really close look at this new 'game changer' marketing...

After 30 years of operating in the innovation space, we have learnt the need to test product and systems against our own criteria. 

Is the innovation making our clients life: 1) Simpler, 2) Easier, 3) Richer Financially, 4) Richer Emotionally OR is the innovation making our business more: 1) Efficient 2) Relevant 3) Exciting?

In the case of this one particular innovation, yes it was pretty cool but it had a long way to come for it to be beneficial for clients. It created extra time pressure and expense for our clients on top of, rather than instead of, additional costs yet not assisting clients get a sale. The benefit was that it assisted the AGENT get profile. Ultimately these innovations have the potential to lower costs by creating better imagery but only then will they be of benefit... that remains some years away. 

The great news is that technology that could be applied to our industry is moving at rapid pace on several fronts. I am heading to Silicon Valley in August with a select national contingent of realtors. We'll see first hand what is emerging and find out first hand about the next generation of technology that could have application to the new world of real estate.

In the meantime, 40 of our team spent last Sunday and Monday at the Australian Real Estate Conference in Queensland, one of the biggest of its kind in the world. It is so obvious the entire industry, on an international scale, is struggling to work out how our industry will look in 2020 and how to adapt fast enough to new technology capabilities and changing consumer needs. One thing is agreed; real estate agents must adapt or they will become extinct.

May 2015 gives clear insight into the way things are moving. So many 'firsts' and a conference where trade booths were dominated by technology companies... and dominated by 'First' launches. A new 'first' at every turn. Incredible!!... Actually, it was quite ridiculous.

With 30 years of innovation credentials under our belt, this is by far the most exciting era ever for us. So how do we see 2020?

Agents by 2020 will split into three categories. 

Category One Agent. Highly trained, technology equipped, with sophisticated data marketing. Global markets will be main-stream for these agents, while Asia will become a massive influence. This agent group will have unprecedented capabilities and cost of selling with these agents will fall while their profits will soar through efficiency gains. 

Category Two Agent. These will be traditional agents suffering fast diminishing resources, utilising high cost, low efficiency and increasingly ineffective marketing channels. They will be subject to heavy discounting and
lack of ability to deliver results.

Category Three 'Agency'. The new one. The true DISRUPTERS. Public, big scale business, like REA, Domain, RP Data, Google, Facebook, but probably a name that doesn't even exist today. There is likely to be big moves on real estate from non-traditional players. A big chunk of the existing real estate pie will go to this category. 

Consumers? By 2020 consumers, will demand more, pay less and be highly litigious. They will be impatient, unreasonable and have expectations that today's agents would consider as ridiculous. Full service agencies like Category One will attract the more reasonable consumers who require high levels of personal expert service.

Real estate SPIN will not wash. Facts, knowledge and results will prevail, and be the only currency. 'Crowd' based referrals will become the differentiator.

Toop&Toop feel confident we are on track to help drive these emerging trends and technologies. Researching, testing, adapting... and we are moving fast. We have 30 years of innovation DNA. Sorting the wheat from the chaff (old fashioned term) is what we are experts at. 

By 2020, I have no doubt Toop&Toop will be stronger and more relevant than today.

We are focused on leading the Category One Agency. We will achieve results for our landlords and sellers not dreamt of today.

These are explosively exciting times.

Anthony Toop

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