DUBAI, UAE — Residential developers are dealing with a maturing and competitive market where the value of their products is constantly under pressure. The entry of generation Z to the housing market as new tenants and homeowners is expected to add further pressure, given the difference between the expectations of these new digitally native customers and the less than digitally advanced state of the housing industry.
Much like their retail peers before them, residential developers need to differentiate themselves by offering a superlative customer experience that is driven by in-depth customer knowledge and enabled by data analytics.
According to the latest report by Strategy& Middle East, entitled “Creating value and differentiation for real estate developers”, developers can no longer compete largely on product delivery, price, or even sales and after-sales service. They need to provide personalized products and services for customers.
These should be based on lifestyle factors, such as: customer first, lifestyle led, data driven, moving from a focus on transactions to relationships. All these can allow developers to adapt their offerings, increase customer lifetime value, generate new revenue streams, and ultimately, beat the competition.
Personalized experience
Although customer experience is already one of the key factors for developers to stand out from the crowd, these companies can go further to maintain the value of their products.
Strategy& report highlights the recent changes in the retail sector that used detailed knowledge of customers from data analytics to offer exceptional customer experience and deployed multiple channels to build loyalty.
To take the customer experience to the next level, real estate developers should start with a more tailored product development approach, exploiting micro-segmentation of their customer base. They should also take cues from other service-oriented industries, such as the retail and hospitality sectors, to broaden and personalize their services and extend the relationship with customers beyond the sales period.
Moreover, they should explore differentiation using innovative technologies such as the metaverse.
However, working in this way requires a shift in mindset. Thus, instead of swiftly moving from a completed development and looking to the next project, developers should nurture a longer-term relationship with the customer, which will extend the lifetime value of the transaction and provide sustained income through more varied sources.
Data-driven expansion of services
Developers can offer tailored services to the market beyond physical spaces, following in the footsteps of hospitality brands. These could include bespoke concierge services for higher-paying clientele, or services supporting daily needs, based on lifestyle data and real-time feedback from existing and prospective customers.
Ramy Sfeir, partner with Strategy& Middle East said: “Using data to understand customers’ needs while placing them in the right setting can also improve their retention. People appreciate, and like to remain, in cohesive communities that reflect their wants. Such established, digitally enabled communities provide valuable data insights that allow developers to elaborate products and services and come up with new areas for customer engagement”.
For example, Related Midwest in Chicago has teamed up with the app Hello Alfred to provide in-home services and experiences to residents, including move in coordination and apartment setup, closet customization and organization, preparation of baby nursery space, dog walking and grooming, and pet daycare.
Such services build a closer rapport between developers and customers. They enhance the length of their productive relationship, creating a feedback loop, and build ongoing customer advocacy—a vital tool in maintaining competitive advantage.
Exploration of innovative technologies
The metaverse gives developers a significant opportunity. They can offer experiences to prospective and existing customers in established digital communities without needing a realtime physical presence.
Retail and interior design organizations are already using such technologies to provide virtual experiences to customers and nurture the relationship through the buying cycle, gathering valuable feedback and data along the way. This kind of engagement provides the opportunity to sell more and sell new products to existing customers, thereby increasing overall customer value.
Developers can use the metaverse to reflect real-life communities in virtual worlds, and so go beyond the offerings and activities of their competitors.
The metaverse is a way of exploring such ideas as reinforcing community spirit, especially for the large number of people who spend their time in different homes or countries during the year. For example, residents could use the metaverse to participate remotely in activities with the rest of the community. Potential buyers could be introduced as holograms at real-life occasions at the development to give them a better sense of the community.