Real estate industry banks on digital platforms to combat COVID-19 impact
Around two weeks ago, a Mumbai-headquartered real estate developer held a customer meet and saw participation of around 1,200 people. While customer meets are common among real estate firms, the only difference this time was that the entire interaction was done virtually, through digital technologies.
This shows how the real estate sector is increasingly adopting digital technologies to mitigate the impact of COVID-19. The advent of the coronavirus pandemic has created a negative impact on every business across the globe, and an industry like real estate has taken a much severe beating.
Ever since the COVID-19 lockdown was imposed in India, the real estate sector was faced with a double whammy of low demand, and a likely labour shortage with migrants going back to their homes from the cities.
In a recent report by KPMG on the “Potential impact of COVID-19 on the Indian economy”, it said the housing sector is expected to see muted demand, with significant reduction in new launches. Also, with possible slowdown in the US and European economies, the potential investments in commercial real estate may either get curtailed or postponed till H2 of the current year.
The silver lining
However, as they say, every dark cloud has a silver lining. In light of the current situation, these digital technologies, which the real estate industry was tinkering around with or using it sparingly, have come into the limelight.
Today, customers keen on buying an apartment are more likely to go online to seek information, interact, and even close the deal.
Abhishek Kapoor, Chief Operating Officer, Puravankara Limited, says, “We have been investing in digital technologies for the last three to four years and created multiple assets. Today, there is much bigger opportunity to test with far better level of acceptability with the customers.”
On a similar vein, Lalit Makhijani, Chief Marketing Officer, Godrej Properties, says, “There is a sea change in the buying behaviour of customers where they are now viewing content online first and the engagement is done digitally.” He further adds that due to Covid-19, with the emphasis on social distancing, it has only accelerated.
The real estate industry started adopting digital technologies mostly for the benefit of non-resident Indians (NRI) customers, who preferred to interact online as distance prevented them from making constant visits to the site or the offices.
This experience created certain maturity in the real estate digital platforms, and has now expanded into multiple touchpoints as there was a comfort factor on both the sides.
For the real estate industry, the first port of call in its engagement with digital technologies has been to make its content available online. This has expanded into many other areas like online customer interaction, virtual tours or site visits, and video chats, among the many other things.
Today, the prospective buyer of an apartment can go through a virtual tour and see every part of the residence like floor plan, structure of the accommodation, outside view, etc.
“In a traditional transaction cycle, the process - from planning to buying - is a tedious and exhausting exercise for both the buyer as well as the seller. Digital transformation will help the builder and buyer to close the deal effectively,” says Bhavadeep Reddy, CMD, HousingMan.
Abhishek says, “From a flexibility and engagement point of view, there is a superior experience through digital platforms. The ability to ask question and look at all information in a shorter quantum of time brings significant efficiency from a customer point of view.”
Realty goes virtual
Unlike in the past, which required the physical presence of multiple participants to engage with the customers, today the real estate industry is able to bring all these virtually together at the same time.
Digital platforms like Zoom calls, Microsoft Teams or WhatsApp business account are all enabling these interactions.
JC Sharma, VC & MD, SOBHA Limited, says, “Considering the current scenario, the established engagement formats with customers is undergoing transformation. Online interaction has taken a dominant place. Each player is coming up with innovative ways to engage with their prospects and clients.”
He further says, “In real estate, the online sale platforms allow us to understand customer requirements faster and serve them accordingly in a faster manner. It helps speed up the decision-making process. We have seen an increasing trend of online buying and are confident that online property purchase will become a common behavioral trait in the recent future.”
Adhering to social distancing
In the current scenario, where there is a strong emphasis on social distancing, these real estate digital platforms are proving to be of immense help as they seamlessly connect agents with sellers and buyers.
“As customers today are extremely focussed on hygiene and maintaining strict social distancing, we do minimal interaction at the site and then go back to digital discussions,” says Lalit.
In fact, the question posed by many real estate developers is whether the buyers really need to visit the property they are looking to buy.
According to the COO of Puravankara, 70 percent of its customers who booked in the month of April never visited the site. “There is an efficiency in the whole process, and it has been an eye opener for us also,” says Abhishek.
Lalit says, there has been multiple benefits through the engagement with digital platforms - be it costs, productivity, further understanding the mindset of customers, and closer interaction amongst others.
Given the very positive experience the real estate industry has witnessed through digital platforms, this will only accelerate the process further with investments into newer technologies and creating innovative ways to communicate with the buyers.
Abhishek says, “We will be rolling out our digital initiatives further. As there is constant innovation, we will be using technologies like AI and ML to target the right customers.”
Lalit says, “We have partnered with leading technology brands seeking out the best possible solution, and are constantly engaging with new software. The intent is to digitise the business.”
This is also the time for the real estate industry to push the pedal on innovation through leveraging technology.
Bhavadeep of HousingMan says, “The lockdown period is pushing everyone to transact online. Builders should now become innovative to bring the sentiment back to the market. As of now, builders need technology-driven sales instead of depending on the old style of selling properties.”
However, there are certain challenges associated with the adoption of digital technologies, especially from the customer or buyer point of view. These primarily rest around the issue of connectivity with the devices and customer savviness in using digital platforms.
The connectivity of devices is more of a technology issue, but there is also the question of how much a prospective buyer is willing to interact online.
Sameer Nayar, Founder & CEO, BuildSupply, a startup focussed on the real estate industry, says, “Digital is the way to go as the current situation is not going to change anytime soon. Customers are ready to adopt this change, and they will go with well-known real estate developer brands.”
The path is very clear for the real estate industry as digital technologies and platforms are only going to become more dominant in the days to come.
As JC Sharma of Sobha Limited says, “We believe online sales will gain more traction in the future as more use of AI, 360 degree views, and video walk through will start getting provided to the customers for them to understand the product better and make informed choices.”