The old adage, “If you try to be everything to everyone, you’ll be nothing to no one,” could not be more relevant to the prevailing sentiment within the real estate industry today.
Changes are certainly afoot as established brands contend with rapidly evolving technologies and new over-funded entrants to the space, however, in response to this disruption we’ve seen some companies announce that they aren’t exactly real estate companies anymore — despite the fact that they are very much selling real estate.
Given that the continuing evolution of the industry is certain, it is more important than ever for real estate brands and professionals alike to own who they are and double down on investing in and evolving their unique value propositions.
Disruption — again? Really?
For the past decade, the real estate industry has existed in a constant state of anticipation for major disruption. Conference programs have revolved around the topic, industry publications have covered it heavily and top brands have made it known that they too are gearing up for “disruption.”
But while real estate is certainly not the same as it was 10 years ago, the industry has not been flipped on its head in the same way that other industries, such as retail, have experienced.
This is because over the past two years, we’ve seen more VC money invested directly into real estate companies, as opposed to investment in the technology that supports real estate companies — a small, but important, distinction.
The numbers speak for themselves: VC investment in real estate tripled in 2017 to reach $12.6 billion, an increase of $10.8 billion in just two years.
This influx of capital means no more false alarms. With the dollars to make it happen, disruption is really coming to the real estate industry, and despite the years of speculation and anticipation for this disruption, very few companies are actually prepared.
Simply calling yourself a “technology company” does not make you a technology company.
Technology itself is evolving and changing everyday, and focusing on speeds, feeds and features alone is a losing battle. Anyone in the real estate industry, whether it be national organizations, brokers or agents, that try to be “everything to everyone” will simply lose to these disruptive forces.
Rather than get lost in disruption, here’s what you should do:
Find your niche
Instead, the key to survival for real estate brands and professionals is to understand their areas of expertise and unique value, and then use technology to further enhance these offerings.
Like department stores in the disruption of the retail industry, the white-label brands will be first to die because they lack a strong brand identity; consumers don’t know what to associate them with, and so they don’t associate them with anything.
As the real estate industry evolves, companies must define and invest in their brand to be successful through times of disruption. Too often brands try to be everything to everyone, and as an a result, end up diluting, and in turn, devaluing their brand promise.
It is crucial to understand your genuine value proposition — own your story — and hone in on the unique expertise you bring to the table for your clients.
This could be the types of properties you sell, such as luxury, new developments or condos, it could also be the specific knowledge you bring to the table as a neighborhood specialist. Most importantly, whatever your specialty is, it needs to be authentic and real.
Exclusivity has been a scary word to many in the industry. But having exclusive offerings is the only way to stand out. Just like in the retail and CPG industries, the brands that own their niche and keep their exclusivity are the ones that are succeeding despite disruption.
Although exclusivity often gets a bad rap, it shouldn’t because it doesn’t have to mean arrogant or haughty — and it doesn’t mean not being inclusive.
It’s about offering a bespoke product or experience paired with an exceptional level of service within your own speciality. This means that not every customer or agent is right for every brand — and that’s OK.
Own your brand
Whatever your brand, whatever your niche, the way to succeed through disruption is to own it, in every way possible. Invest in brand experience and marketing to the right prospects, and aspire to be the absolute best within your specialty.
Remember, this is only the beginning. Significant VC investment is still pouring into our industry, and we should anticipate more to come. If you are a real estate brand or professional and your plan is to evolve into a technology company to compete with these new entrants, you will lose that race.
The next 10 years
Brokerages of the future will fit into one of two primary categories, and arguably, I do feel there is room for the best of both in the industry.
- The first will be transactionally based. At the most extreme end of the spectrum, a purely transactional brokerage will automate the entire homebuying or selling process without agents. There will be the brokerages that fit into this category that still have agents, but these licensed agents will play a diminished role, becoming call center operators manning 24-hour 800-numbers and letting technology lead in their relationships with clients.
- The second type of brokerage will be rooted in relationships and human interaction. With tailored one-on-one service, the most successful of these brokerages will leverage the best technologies to elevate the brand experience delivered to each and every client, both online and offline, through consistent systematic approaches that promote enhanced personalization.
The reality is that real estate brokerages sell a service, not a product, so they cannot simply become a technology company overnight. Customers see agents as advisers to help guide them through one of the biggest decisions of their lives, and they don’t want to be treated like just another data point fed into an algorithm.
The only way to keep your brand differentiated during this time of disruption is to harness technology in ways that allow you, as an expert and real estate professional, to further own your speciality to deliver a bespoke and unmistakable brand experience.
If technology can replace your role in the value chain, be warned.
Anthony Hitt is the CEO of Engel & Völkers Americas in New York City. Follow him on Twitter or Instagram.