The biggest issue for most businesses is not seeing it coming before the changes actually hit. The reason is that change in the marketplace requires a number of things to happen first. There are five different groups of people in the marketplace:
- Innovators = 2.5 per cent
- Early adopters = 13.5 per cent
- Early majority = 34 per cent
- Late majority = 34 per cent
- Laggers = 16 per cent
Someone can come up with the innovation, but to really get market acceptance it has to be taken up by the early adopters. Until these people have taken on the innovation, the early majority will not follow.
But once the early adopters are happy, the early majority comes on board and the tsunami of change occurs. They are then followed by the late majority. The laggers will only change their ways when the businesses that offer the old way have shut down.
I had personal experience of this with my first business in 1980. I was one of the first to open a one-hour photo shop in Sydney. I opened the first store in about April but went through a really hard time because people were reluctant to embrace the process. They would come to the counter with their films and ask how risky the process was. Some would walk away. We were only bringing in 20 to 30 rolls a day, probably from the early adopters. This went on virtually until Christmas time, when all hell broke loose and we started doing 300 rolls a day. The early majority had decided to give it a go.
I believe the change in the real estate industry has already started, but the real issue is that the old ways are still holding and the time of the early majority's influence is yet to occur. Three things are driving this change process:
1. The internet
Portals such as realestate.com.au and domain.com.au have taken over listings from real estate agents. Few people now go to a shop window to look for a property. Also, why would they search an agent’s website for a property? It is time-consuming and not worth it when you can go to the portal and see every agent’s property.
The second phase of this development will be the segmentation of the internet market. This has not developed full, but will include:
- Consumer-focused portals that provide all the support vendors need to sell their home without an agent
- Investor-focused portals that bypass agents and help buyers find properties
- Real estate agencies that will become even more hyper-local
- The emergence of new entrepreneurial businesses
2. The customers (sellers and buyers)
It is already known that nearly 74 per cent of people search the internet before buying a property. This will only increase. Most buyers don’t want to talk to an agent at this time. They are only interested in properties and getting the information. How upset they must be when searching the internet to find certain properties have no price or no addresses but with a comment to phone the agent. Guess what? Most will simply jump to the next property. Agents should start using modern technology that will allow the agent to provide information 24/7 as long as the customer gives name and email address, and without the need to contact the agent. This whole research process is an opportunity for the agent to impress clients through the internet with their knowledge and good advice.
3. The new style of real estate agent
Alongside the changes above, the role of the real estate agent has also shifted. Customers no longer appreciate the old style of outbound marketing, which is very intrusive when they just want to receive all the information and much more helpful advice. The new agents will understand more about the use of inbound marketing techniques. Agents will be required to have greater marketing skills so their property stands out during an internet search, as the scanning process is probably just three seconds before buyers jump to the next property.
There are exciting times ahead for the real estate industry as agents change their role and focus on the needs of the customers. There will be many opportunities as long as we are looking forward and not backwards to the so-called good old days.