Do you know where your tenants are? What their challenges are? Most customers (66% of them to be specific) want businesses to understand where they are. Customers are craving to have their voices heard. For commercial real estate (CRE) to remain on top of its game, it needs to start listening and understanding what its customers are asking for.
Digital detectives – finding information on the web.
Most of us are used to googling throughout our daily lives, retail renters are no different. Considering that a lot of the brands who approach temp-retail spaces are coming from a digital landscape, they are used to having information at their fingertips. A study from 2018 highlighted that 87% of buyers start their journey online, this percentage will have increased since then. Google also chimes in to say that 53% of people always research online before committing to a purchase.
Web searches give customers, and renters, the power to own the process and be their own decision-makers. This degree of convenient, quick self-service has become a standard in modern society, and CRE should be meeting this expectation.
Without a strong online presence, businesses can lose opportunities to connect with customers. A study by The Harvard Business Review about digital transformation highlighted that 72% of businesses felt that digital transformation would bring their business closer to their customers.
This momentum towards digital will only increase over time now that millennials are starting to make up a large part of the workforce. Notoriously recognized as “the mute generation” thanks to their tendency to avoid phone calls, the internet is their default method of obtaining information. A whopping 74% of Millennial B2B business buyers are willing to pay more for a better business experience – something that every B2B business should take note of.
The internet of information
One thing is certain: the internet is jam-packed full of information. The bombardment of information coming from left right and center means that while the expectation of having an online presence is there, the important thing is making sure the right information is there. People are looking for more useful information online. The normalization of self-service means that the information put online by retail property managers needs to be extensive enough to allow tenants to:
- Find listings online
- Find all the necessary information to see if a listing is a good fit
- Find pricing information
- Learn about availability
Picture a digital native tenant, who wants to experiment with the world of physical retail for the first time. They haven’t yet built a network of contacts in the real estate world, and so, their natural instinct is to type in the search bar for information. This is where the customer relationship begins. Detailed information that proactively answers questions, showcases the offer and highlights a level of understanding, will create a deeper level of credibility and affinity towards a brand.
This level of convenience when looking for information provides tenants with the tools to aid their decision-making process. By letting tenants own their process, manage their own time, and determine for themselves if a space fits, leasing teams will start working with tenants that already have the intention to commit to a lease. This degree of digitization is not to say human interaction will be eliminated, but it gives tenants the choice to either self-serve or engage with a leasing agent.
Understanding the decision process
Traditionally the buying process consisted of five stages: awareness, consideration, selection, retention, and advocacy. The birth of online shopping has naturally added extra complexity to this process. Research conducted by Google led them to identify “The Messy Middle”, the theory suggests that buyers are initiated by a trigger, which leads them to loop between exploration and evaluation before committing to a purchase. This complex loop between exploration and evaluation is emphasized by a constant influx of information and 24/7 access to online shops. Compared with the past, buyers were limited to what products were available to them locally.
Let’s also consider how vacationers look for accommodation online. The first stage is research, where potential guests start planning and determining locations, often using dedicated sites such as Booking.com, Airbnb, Trivago, etc. The second stage is deep diving, guests begin looking for more detailed information by visiting hotel websites. Lastly, guests compare with the competition before committing to book. Notice how the final booking decision is heavily reliant on the information that is available online. The stronger an accommodation’s online presence is, the more likely they are to follow through with a booking. Interestingly, hotels receive 50% more bookings through their own branded sites than Online Travel Agents. This has the added benefit of reducing acquisition costs and creating a stronger relationship with guests.
What does this tell us about booking short-term retail space online? It signifies that once a tenant has been triggered to look for a space, they’ll go through a state of evaluation and exploration before committing. The vast amount of information online can be blinding, so temp-retail spaces need to have detailed information and a clear online presence to help prospective tenants self-evaluate. This creates credibility and trust in space owners, ultimately resulting in regular bookings with returning tenants.
New digital contact channels
The new generation
We’ve spoken about how younger generations communicate differently. Millennials now make up to 72% of the workforce (and counting) with Gen Z following shortly behind, making up to 25% of the workforce.
With Millennials and Gen Z making up a large portion of the workforce, they’re beginning to influence, if not fully, make B2B business decisions. It’s important to consider how newer generations want to be approached because traditional marketing methods will not get you far. These generations are accustomed to information bombardment and are psychologically equipped to filter out the unnecessary. Instead, seamless tech and influencers hold more weight. Once they find you, their first touchpoint is going to be through your website.
“It’s important to consider how newer generations want to be approached because traditional marketing methods will not get you far.”
McKinsey points out that this trend is no longer specific to younger generations. The pandemic fully shook the planet and enforced digitization in areas of business that were not thought possible and it has left its mark for good. Digital self-serve and remote human engagement is now favored over face-to-face interactions because it gives people freedom over scheduling and reduces commuting efforts.
No more human interaction?
This doesn’t mean that personal contact or relationships no longer matter, or that everything will become an anonymous digital process – far from it. Human interaction will always be a crucial element in any form of a relationship. While virtual meetings are the start of any business relationship, a deeper connection and trust-building are formed once a face-to-face meeting takes place. The biggest change to business relationships is the way they are initiated, and at what point in the customer journey they’re formed.
For online leasing, the level of human interaction will depend on the complexity of the lease. Simpler leasing products can change gear to focus on customer enablement, ensuring that tenants have what they need in order to succeed. The human interaction will always be there, but it’s about being there for tenants when required.
Lease online 24/7
There are not many products or services out there that are not yet buyable, bookable, or reservable online. This is where commercial retail leasing stands out like a sore thumb. In many cases, information on temp-retail spaces is offline, meaning that these spaces have no exposure to online savvy tenants. People want to be able to research online, if a tenant finds something that they like, they want to be able to react quickly and commit instantly.
This is the benefit of a digital workflow. It significantly increases the speed and convenience of leasing a space, whilst giving tenants the freedom to engage with landlords while they are in the mindset of committing to a lease. Sometimes the window of opportunity for commitment is small. When browsing online it’s easy to get distracted – the doorbell rings or the dog barks, so capturing tenants in that exact moment of commitment becomes crucial to booking success.
Get an edge up on the competition
Having a competitive edge is the pulse of any business, after all, without it a business wouldn’t stand out. Standing out online has become an even greater challenge now that it is filled with noise, so what’s the best way of making yourself heard? According to Forbes, the best way to stand out online is not only to have a good website but most importantly to have a site that communicates clearly and provides the information that customers want. The idea is to be able to provide any potential customers with information and services 24 hours a day, whenever they want, wherever they want.
Having a good online presence is a necessity to having an edge, but another core to this is customer-centricity. Initiatives toward customer-centric digital transformation can generate an impressive 20-30% increase in customer satisfaction, as well as economic gains of between 20-50%. This movement toward customer-centricity is trending – nearly half of all companies say that improving customer experience and customer satisfaction is the leading influence to starting digital transformation. A massive 81% of marketers are expecting to compete solely on the basis of customer experience in the next two years, with Deloitte also stating that two-thirds of a company’s competitive edge comes from its customer experience.
The beauty of customer-centricity becoming a driving force for digital transformation processes is that goes hand in hand with increased operational efficiency. Streamlined digital processes heavily improve operational performance and cut down time spent on administrative work, giving businesses the chance to be quicker to market and providing the ability to meet customer expectations.
Real Estate is starting to ride the wave, according to the 2019 KPMG Proptech survey, real estate companies are increasingly adopting digital technologies – 58% of them have a digital strategy in place, which is up from 52% in 2018 and 2017. While CRE is normally a little behind with jumping on new technologies, the winds are changing and they too are beginning to digitalize.
The commercial real estate industry is shifting to focus more on tenant-centricity. The first step is to understand where your tenants are coming from and what they’re looking for. This level of understanding can help set businesses up in the right direction to see how they can use digitalization to their advantage. In the end, it’s a win-win for tenants and leasing teams if digital investments are pulled off successfully. It simplifies the process on both sides and strengthens the partnership between occupiers and property owners.