RealTech, or Real Estate Technology, has seen rapid development over the past decade. Its impact has been felt across a wide range of settings, from our homes and workplaces to online and offline retail spaces, fundamentally transforming our daily lives. In this article, we explore RealTech and its expanding role in shaping the world around us.
The digital revolution has revolutionized every aspect of our lives. With people spending hours on their computers and smartphones every day, technology has become a pervasive force that drives our expectations for convenience and accessibility. In fact, a survey conducted by Tech Times found that over 10% of people wake up in the middle of the night to check their phones.
The breakneck pace of technological innovation is transforming the way we perceive and interact with the world around us. As consumers, we now demand instant access to everything from research data to pizza delivery, and businesses are working hard to keep up.
Real estate is no exception. Fueled by the desire to streamline processes and provide seamless user experiences, innovative new technologies are revolutionizing the way we search, transact, manage, and utilize real estate.
One of the most significant technologies driving this transformation is RealTech. RealTech is transforming our relationship with the built environment, providing insights that enhance our interactions with it. As such, it is playing an increasingly important role in our everyday lives.
WHAT IS REALTECH?
RealTech is a term used to describe technologies utilized in the real estate industry that impact the built environment through either strategic innovation or product enhancement. In contrast, PropTech is more focused on specific real estate purposes and transactional practices.
RealTech start-ups employ a model that involves taking traditional systems and processes and overhauling them with cutting-edge software, hardware, and core technologies to address inefficiencies and outdated practices. This extends across the entire real estate industry, from construction and development to agent practices and the way consumers search, acquire, and manage property.
RealTech’s influence extends beyond the home and reaches our workspaces, retail purchasing behaviors, and how material goods are handled in modern urban environments. Rather than reinventing built environments, RealTech is based on a foundation of embedding technology into existing structures, effectively changing how a building is imagined, created, and operated.
RealTech is a strong growth sector, with venture capital investments into various forms of the technology increasing by a staggering USD $19.5 billion from 2013 to 2018, with USD $12 billion invested in Asia Pacific alone.
For Australian real estate businesses, RealTech will digitize many archaic processes and help SMEs engineer enhanced relationships with their customers, employees, and the workspaces they inhabit.
Over the last decade, e-commerce has soared in popularity, providing consumers with an unprecedented range of retailers and products. As a result, shopping convenience and cost-effectiveness have become top priorities for consumers, creating an “on-demand” culture. This has caused traditional brick-and-mortar stores with conventional inventory management, logistics, and supply chain systems to struggle to remain relevant.
To compete with online competitors, some retailers have adopted a hybrid RealTech solution known as “Omnichannel” retailing. This style of retailing involves established shops using digital marketing and sales channels to provide consumers with a seamless shopping experience. However, bridging the gap between online and offline retail experiences can be challenging, requiring a deep understanding of consumer purchasing patterns and preferences for both online and offline platforms.
To gain these insights, RealTech consumer experience platforms can generate customer profiles, provide real-time feedback, and integrate with legacy systems to improve customer relations. For example, Local Measure is a next-generation customer experience platform that connects businesses with their clientele to provide valuable insights that inform retail strategies.
The retail industry is also benefiting from a new wave of hardware solutions, such as sensors powered by the Internet of Things (IoT), that track consumer in-store behaviors and trends to guide them and optimize the consumer journey.
The evolution of retailers over the last 20 years has seen the initial benefits of shifting to an online model exhausted. RealTech solutions represent an opportunity to truly connect online retail models with traditional retail outlets for a comprehensive customer experience. This is Omnichannel retailing in action, made possible by RealTech advancements.
REALTECH IN WORKSPACES
The popularity of shared workspaces such as WeWork, WOTSO, and Regus is on the rise. These spaces offer businesses the opportunity to access lavishly furnished office space in a flexible manner through short-term rentals (STR), which can help to relieve the burden of being locked into long-term leases.
One of the natural outcomes of co-habiting office space is collaboration, as many organizations share ideas, opportunities, and develop capabilities in conjunction with one another. With so many innovative start-ups occupying these spaces, this collaboration is becoming increasingly common.
The trend of businesses taking advantage of STR looks set to continue, with JLL predicting that around one third of all office space will be flexibly shared over the next 10 years.
RealTech is also geared towards optimizing workplace experiences and making them more attractive to employment candidates. In Victoria, for example, the WorkSafe WorkWell program prioritizes mental health and physical well-being by providing access to RealTech digital resources, additional funding, and knowledge. These digital engagement platforms enhance relationships between tenants and help to manage amenities in the building.
REALTECH IN DAY-TO-DAY LIFE
RealTech, the integration of technology into the real estate industry, is set to have an even greater impact on our daily lives as technology continues to advance. One such example is Hmlet, a start-up that has adapted the shared workspace model to residential dwellings, resulting in a steady increase in premium shared living spaces. These spaces offer tenants their own private areas, convenient access to lifestyle amenities, and the establishment of co-located communities, helping residents feel a sense of belonging.
Companies such as Uber and Airbnb, which leverage underutilized, capital-intensive assets like vehicles and homes, have become essential tools for travel, commuting, and accommodation while traveling. These businesses cater to the customer’s satisfaction by providing enhanced experiences while also addressing the challenges of rising urban density and the shortage of assets.
With the global population growing and becoming more mobile, RealTech-based shared asset models like these will aid businesses and governments in tackling these challenges. By utilizing dormant assets, they can provide a range of services while also improving the customer experience.
RealTech and PropTech belong to the same category of technology, but their applications differ. RealTech focuses on enhancing community connectivity, while PropTech is primarily concerned with utilizing technology in real estate and is closely linked to FinTech products and practices.
RealTech’s general categories divided into include:
- Urban Planning
- Design and Construction
- Search, Sales and Acquisition
- Leasing and Management
RealTech has already caused a substantial impact on the way we live, work, and entertain ourselves. The progression of technology is relentless, and it continues to advance. Even if we resist the RealTech revolution, it is inevitable that it will influence our lives. This trend will create numerous possibilities for the global real estate industry, businesses, and consumers, which will improve the quality of life and customer experiences.
According to The Future of RealTech, a white paper by KPMG, traditional operators will face growing pressure to adapt or face extinction as more global investors allocate venture capital funding to discover and cultivate future RealTech innovations.