There’s no question that the pandemic set in motion a global digital transformation in 2020 where telecoms tech like Zoom, along with enforced practices such as work from home, became ubiquitous for many workers across multiple industries. For the residential real estate industry, one of the other transformations that’s taken place is a consumer revolution, one in which consumer priorities and expectations for housing have shifted rapidly.
Challenges certainly remain, not the least the uncertain economic climate and rising house prices, but the fact remains that the landscape for the industry is changing, and agents should be ready to adapt to it.
Consumer behaviour changes have accelerated
Consumer behaviour tends to change with time in small increments, continuously evolving to keep track with changes in the macro-environment. However, seismic world events, such as a pandemic, have the potential to rapidly catalyse such change in short order, which is exactly what has happened.
PwC concluded in their latest Global Consumer Insights Pulse Survey that the pandemic forced consumers to become more resilient, both individually and collectively, and to be so resilient, “consumers have had to pivot and adopt new habits”, further noting that “the changes are sticking – signifying a historic and dramatic shift in consumer behaviour.” What perhaps headlines this change is the digital acceleration, in terms of both necessity and acceptance. The digital embrace is no longer the preserve of the digitally native young, now extending significantly across all generations.
In some respects, this trend was launched by one of the youngest consumer sets in the market today – Gen Z. This segment of the market, generally aged between 16-24, are described in a report by the global professional services firm EY as “the next big disrupter”; because as “digital natives”, with access since birth to smartphones, the internet, social media, and everything that comes with modern technology, their demands of technology will necessarily drive innovation and, therefore, impact how businesses engage with consumers across generations – especially with so many services being accessible via mobile or indeed app-based.
As of 2019, at least 84 per cent of over 75s in Australia made use of a smartphone, and the overall smartphone penetration rate in the country is estimated to sit around 80 per cent by 2022. It’s a proliferate figure, which is perhaps why consumers are increasingly demanding the convenience of omnichannel accessibility that enables an integrated experience where they can effortlessly transition their consumer data between their smartphone to other platforms.
These changes will factor in to how consumers in the residential real estate market prepare to save for their property purchases, particularly for the more digitally savvy generations like Gen Z. According to research conducted by YouGov for UBank conducted in March 2021, 61 per cent of Australian Gen Zs are now more likely to take an active interest in managing their finances, ahead of baby boomers (56 per cent), millennials (55 per cent), and Gen X (46 per cent).
The pandemic has also shifted the perspective of home ownership for other consumers, with a Dynata survey finding that the pandemic has inspired 13 per cent of millennials to buy a home for the first time. Given that more than half (61 per cent) of Australian millennials don’t have a savings plan, according to a CommBank study, this will encourage stronger savings habits into the future, particularly as that same study found that 58 per cent of millennials intend to buy a house within the next five years.
But it’s not just the younger demographics who have undergone changes, the consumer insights firm GWI considers 2020 to be “generation-defining” for Gen X and baby boomers in a way that has been much more impactful compared to millennials and Gen Z, as from a digital standpoint hardly any part of their online lives has been left untouched by the pandemic. GWI data also found that 36 per cent of baby boomers claim to feel more confident in using new technology in Q1 2021, an increase of 10 per cent in Q2 2020.
A further survey on real estate trends found that 92 per cent of baby boomers want virtual options on property viewings to continue even after the pandemic is over (as well as for 81 per cent and 86 per cent of Gen X and millennial consumers, respectively), showing that many of the changes that have taken place over the past year-and-a-half are here to stay.
Looking ahead with the 2021 consumer
So, where does that leave the 2021 consumer? In short, changed for good. A 2021 consumer research study from Accenture across 22 countries and 25,000 respondents found that half of all respondents have changed significantly from where they were, with an additional 33 per cent of respondents actively evolving towards this new way of thinking and being. Consumer priorities are shifting, and many of today’s consumers all share more similar values and expectations than in years past.
The advancement of flexible working is a major factor, with work from home leading to new expectations of hybrid/flexible working into the foreseeable future. PwC Australia’s Future of Work lead Ben Hamer found that three-quarters of Australians want a hybrid of home and office working post-pandemic, and only one in 10 wanted to return to working five days a week in an office environment.
This will impact where consumers want to live and what they are looking to buy to accommodate the lifestyle they’re after. And who better to help them achieve this lifestyle than the agents who assist them in their residential buying requirements? It’s only one part of a larger picture, but with consumers now demanding more of the brands they engage with, there’s no better time for agents to evaluate how they can offer a better service to the 2021 consumer.
Interested in more insights on how consumers have changed? Download your free copy of Reapit’s newest report on the Consumer (R)evolution: how to attract, engage and retain the 2021 consumer.
Eddie Cetin is the APAC chairman of Reapit.