E-commerce is clearly transforming the economy, across virtually all industries and businesses. Real estate companies are facing an imperative to adapt to e-commerce, and test their own "e-commerce readiness" via benchmarks and other analyses - both in how they use the new technology internally, and how it is affecting their clients.
For the winners, the rewards could be increased business opportunities, stronger growth and increased market share. In this emerging era of e-commerce, real estate companies will have to be more flexible, innovative and nimble than their clients - and competitors.
They will have to learn to quickly anticipate, meet and exceed fast-changing client needs. To address these challenges, innovative companies in every segment of the industry are developing "the Offer" - new products and services to meet the needs of clients and customers. According to Blur: The Speed of Change in the Connected Economy, by Stan Davis and Chris Meyer of Ernst & Young's Center for Business Innovation, the Offer is based on the demand side of the economy, addressing an entire bundle of broad client desires and demonstrating how a particular product or service will help the client reach their goals. Offers happen when a product is bundled with a service. The real value of an Offer is best seen when a combination of products and services is designed that fully matches an important client "care about."
For example, Transamerica Intellitech (ta-intellitech.com), a subsidiary of Transamerica Corp., offers software packages that allow users to access various types of real estate information. MetroScan houses a comprehensive database of residential, commercial, industrial and vacant property obtained from county assessors and other agencies. The Automated Real Estate Analysis System (AREAS) assesses the value of residential properties and is used in applications such as refinancings that may not require a full appraisal. Foreclosure Investor provides information such as filings of notices of foreclosure that enables investors to buy properties in foreclosure.
Offers are distinguished from traditional products and services by a number of key attributes. Not all are required in every Offer, but the more that are incorporated, the more compelling the Offer. These attributes and corresponding examples provide a glimpse at the revolutionary impact of e-commerce and how some companies are responding.
1. Anytime: Accessibility by users any time of day.
* Residential real estate: An increasing number of traditional mortgageand lenders are beginning to offer services on the Internet. RealEstate.com provides home listings, home financing, appraisals and other services.
2. Real time: Capturing the reality of what is happening rather than relying on historical.
* Residential real estate: Online mortgage-lending services like E-LOAN (e-loan.com) provide prospective home buyers with real-time reports about mortgage interest rates, home values, lenders in the market and other information. Transactions that used to take hours can now be done in minutes.
* Commercial real estate: Likewise, the commercial-property loan process is speeding up. Central Park Capital (www.cenprkcap.com), a commercial real estate lender, has begun to use the online commercial real estate underwriting and processing capabilities of Keystroke.com, a developer of automated loan-processing technology. Commercial-property owners and mortgage bankers can enter key information, including a property's cash flow and characteristics, and within minutes receive a preliminary underwriting.
3. Online: Pervasive connectivity, keeping the Offer updated and available online.
* Real estate: Thousands of Websites are devoted to real estate information including appraisals, www.realtor.com) has one of the largest online databases of home listings, together with links to residential and commercial realtors in local markets., construction management, development, energy management, law and mortgage brokerage. The National Association of Realtors (
4. Interactive: Communicating directly with the client.
* Retail real estate: Retailers are creating multiple channels in virtual and physical space to market products and services.
5. Anyplace: Allowing clients to access the Offer from anywhere, including their homes or while traveling.
* Hospitality/real estate: Travelers can contact the Hotel Reservations Network either by dialing up its Website (www.180096hotel.com) or dialing an 800-number to make reservations and obtain discounts.
6. Learning: Offerers can obtain information about the client and adjust themselves or take new action based on that information.
* Commercial real estate: Based on client feedback, architects are using new 3-D imaging technologies that make it possible for clients to view buildings and manipulate what they see with unprecedented precision. Prior to, architects provide owners and managers with different views of the structure, both inside and outside. By designing a building first in virtual space, clients can identify and correct any problems.
7. Anticipating: Using previous customer preferences to extrapolate what the customer might need or want next.
* Commercial real estate: With the continuing consolidation of many industries, the increase in startup companies and the rapid changes in a "blurred" economy, more office tenants may prefer to lease space for a year, six months, a few weeks or even day to day.
* Residential real estate: HomeSeekers.com, which provides listings and other real estate services, is reportedly attempting to adapt the online auction concept to lending. After the loan applications of prospective home buyers are reviewed and approved online, they would be put out to bid to lenders.
* Commercial/residential real estate: Prudential Real Estate (www.prudential.com/realestate), a commercial and residential network for property investment and home buying, announced an agreement with Palm Computing Inc. (palm.com), a 3Com company, to provide wireless access to real estate information and services for users of the new Palm VII organizer, the first all-in-one wireless hand-held organizer.
8. Upgrading: Offering incremental enhancements to existing offerings.
* Financial Services: Ernst & Young worked with Standard & Poor's to create Ratings Direct, in which data from a dozen different S&P print publications was integrated into S&P's Internet-based, real-time ratings delivery system.
* Real Estate: LoopNet.com, the largest online listing service of commercial properties for sale or lease, recently launched LoopLender, an online commercial real estate loan origination service. Among the leading property lenders who have agreed to take part in this new service are Aries Capital, FINOVA Realty Capital, GE Capital Real Estate and HVB Realty Capital.
Each month LoopNet receives an average of more than $11 billion in properties for sale and 240 million sq. ft. in properties for lease. In total, the service represents more than 80,000 commercial real estate professionals.
A final thought: Real estate firms need to get an "e-commerce readiness" checkup to evaluate their preparedness for e-commerce and develop the necessary strategies. You don't want to be left behind in the fast-growing e-commerce market.