Technology innovators of today could soon disrupt the commercial real estate sector. The commercial real estate industry has been very slow to adopt digital transformation. Wharton authors Michael Berman, Barry Libert, Megan Beck and Jerry (Yoram) Wind believe that this has to change with both mental and business models or risk getting disrupted by tech innovators and have outlined a five-step process called PIVOT to help companies change.
“The way we lived, the way we consumed, this whole ownership economy much of it emerged out of driving our cars. We built a big house in the suburbs, we moved there, we acquired stuff. The direction of change here is probably different, but it’s comparable in how profound it was and the societal implications.” The Wharton authors noted that a “strong prevailing wind is emerging” in the commercial real estate sector. “The first phase of digital development is finally arising in this location and asset-based industry where technology has long played a minimal role. And for good reason — this is the real asset industry by all measures,” they highlighted.
Mobile, social, Big Data, the Internet of Things, and cloud are being leveraged by industry companies such as Zillow setting a forward driven pace to change the commercial and residential real estate industry. Zillow got its start innovating in the real estate category, creating an unparalleled level of transparency to empower consumers to make smarter decisions about homes. The smartphone and tablet ecosystems create additional opportunities for innovation, as they raise the bar of consumer expectations. We want our apps to be fast, smart, personalized. Before the smartphone, Zillow was a reactive search engine. Come to the front door, enter a search term, and then we provide value. Today, the Zillow app is centered around you to proactively help you find your home.
“For those in the technology world with some background in real estate, the opportunity may seem obvious: Participants in the real estate industry can use technology to make faster and better decisions,” the Wharton authors noted. “But as noted, the real estate sector is one of the few remaining sectors of our economy that has created immense wealth with little or no technology know-how and interest.”
“Assets are losing ground to access, whether the assets are hotels, homes or apartments. This industry has always believed that location, location, location rules. But in the mobile world, where ‘location’ is mainly virtual — many things can be done through smartphones — assets are losing ground to access, whether the assets are hotels, homes or apartments.”