3 Key benefits of Augmented Reality for the Real Estate industry

We recently evaluated the feasibility of using Augmented Reality for a property builder in the marketing campaigns of their upcoming projects as they were experiencing severe challenges in conversion ratio. Even though there was some revival in the low margin segment of sub 25L apartments, there was a total lacklustre moment in premium category. As per the chart below, Sales figures for the segment between INR 1 CR to INR 2 CR posted a negative growth of 9% whereas projects above INR 2 CR posted a minus growth of 4%.

Reality Watch - Economic Times, 04th May 2016
Reality Watch – Economic Times, 04th May 2016

YoY fall in real estate - Economic Times, 04th May 2016

Restricting launches is not the solution as it will affect cash flow, brand strength and even availability of work force. Hence, the need of the hour is to increase the customer base and an analytics framework s to track customer initiation from the campaigns.

KPI’s of Real Estate companies

Maximum site visits & deal closure

One of the KPI’s for any real estate company is Customer site visits. It is not the number of calls made and the number of visits to your fan page which counts. Customers generally prefer visiting the property before taking a call. Making the customer visit the property is only getting half the way through. When it comes to big ticket investments, prospects have a fair idea about the brand of the developer and their only concern is lack of time to visit the property. Wish there was a way where they could view the property, from wherever they are.

Quick Turn Around Time (TAT)

Most of the real estate purchases are made with an intention of moving out of a rented property and any delay in project will ultimately lead to financial burden for the customer. This situation is created because of various reasons, the major reason being changes in design. This issue could be avoided if the customer is clear about their requirements. There are projects which are delayed for more than 8 to 12 months which tarnishes reputation of the builder apart from throwing the financial stability of both parties into a chaos.

Delay in possesion-Economic Times 13th April 2015

Chart on Delay in Projects (Source: The Economic Times, 13th April 2015)

Effect of Ad Campaigns

On an average reality companies spent around 3 -4 % of their revenue for brand building and promotion of projects through print and digital media. It is very important to assess the impact of campaign to gauge the responding population and their demography. Well chalked out campaign helps to boost the visibility among the crowd. It will lead to interest generation in the property. Analysis of Ad/campaign performance requires dependable data which is not traceable in most cases, especially for print ads.

These KPI’s are common for the Real Estate industry and we believe that using Augmented Reality in real estate sector has several benefits. We outline below the 3 Key benefits that serve as enablers to the concerned KPI’s.

  1. Key benefit of using AR to maximise site visits and deal closure

Realtors know how closely knitted Customer visits are to the property and deal closure. The quicker the site visit with family takes place better the chances of closing the deal. Being a key KPI, everyone knows how difficult it is to bring all key stakeholders to see the property and guide them in the decision making. Many a times, it is a herculean task to bring everyone on board together to visit the property. Thanks to new age technologies and high speed internet, this issue can be easily tackled by using Augmented Reality @the cost of a candy.

Study conducted by 3M shows 43% more chance of customer decision making in favour of purchase if they are shown the products with powerful visual aids (Source: Minnesota School of Management, March 1986).According to Samujjwal Gosh, V.P-Marketing of Lodha Group, taking clients on a virtual tour of the property has become a key functionality of their digital marketing team and is expecting this to generate 25%- 30% of the revenue in the next 3 years.

Augmented Reality is more than visual. AR helps the prospect virtually see inside the property and walkthrough while just sitting at the office or having dinner at home. There is no necessity to take a break out of hectic schedule and endure a long drive just to see the property. The real property, room by room comes alive just while you scan the catalogue or the ad in a newspaper!! Apart from going through each room they can even gauge the surroundings and the neighbourhoods. The prospect will be able to get 360 degree view of the property including groceries and places of prominence nearby and on which direction the house is facing etc.,. Even, children who are becoming a key factor in decision making will be excited to find slides, see-saws and play area coming live during the process.

Guess the biggest advantage of this? Those who have difficulty in bringing everyone in the family together to visit your property will find this functionality really useful. Augmented reality helps them go through each and every room and surroundings one by one and discuss in detail with other family members. They are able to arrive at a collective decision at a better speed. The advantage: Decision making process is quicker and closing the deal is simpler! The first and the foremost important KPI is attained.

Augmented Construction Plan

2. Benefit of using AR in Quick TAT in delivery

As we have seen above, sticking to a promised Turn Around Time is quite important especially with new rules in place which specifies strict penalty for delay in handing over of property. The foremost advantage of maintaining delivery time is enhanced brand value and customer loyalty. When you dig deeper into the real problem of a genuine builder with regard to delay, they are structural changes articulated in the last minute or individual changes due to the disparity in understanding between realtor and buyer. By using AR, even a layman can visualize and understand the specs and amenities thereby greatly minimising misinterpretations. Apart from providing augmented or enhanced visualisation during the promotion stages, where the prospects can walk through each rooms and surroundings, the AR app can be more interactive during the subsequent stages. Once the deal is through, app can be customised to help buyer to decide on color of paints, design and location of placing furniture and can even virtually try out various combinations and plan even during the basement stage itself so that the complete poka-yoke (mistake proofing) is in place from the beginning and projects run on time. The benefit: Customer is happy, brand value is high and next project planning is easy.

Furniture and Room colour AR

3. Benefit of using AR for precise analytics of each campaign

Gauging the performance of every campaign is very important for real estate business because 3 – 4% or even 5% of the revenue is pumped into ad space of which 50 – 65% is on paper ads. It has always been an off target affair identifying the reach of paper ads.

AR is such a sharpened tool of Data Analytics so much that it can dig out the complete database live and on the spot. AR helps with live updates on who is viewing your ad in paper or catalogue, from which location and the contact details which makes it easier for business development executive to contact the probable customer even while the prospect is scanning the image in catalogue or paper. In fact, the customer may be contacted as and when they are viewing the image of property which may even amaze them to realize the quick response the team is giving them. The data analytics can be easily downloaded to a computer for any kind of further analysis and can help to decide on any shift required in the target audience or even can be used for the next project decision based on interest coming in from different locations.

Data Analytics - Rebecca Merrett

Conclusion

Speed is the buzzword in real estate when it comes to closing the deals. Augmented Reality reduces the burden of regular site visits and improves interactions which in turn enhances transparency and leads to quicker buying decisions. The advantage of limitless visualization possibilities of AR helps customers plan home décor in advance and save valuable cost and time. Moreover, since the buyer gets a better idea about how each and every rooms will look finally makes it easy for suggesting any alterations in advance. When it comes to cost part each scan might not cost you more than the price of a candy.

The author may be contacted atinfo@smacarsolutions.com for details and clarifications.

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