Let’s talk about configuration in real estate
What does configuration actually mean? It’s a fair question, considering that the term is rarely used in relation to property in the UK. Nevertheless, this word is familiar to most of us. After all, both useful and rather annoying, third-party cookies accompany us at every turn in our daily lives and demand to be ‘configured’.
In principle, configuration is an artistic act, you design something according to your wishes, be it your car, apartment, garden, a yacht or now with PROPSTER, a future home. Yes, we were also amazed the first time we saw a yacht configurator but, in the end it just proves we are on the right track with what we are doing for real estate. When used correctly, online configuration is a powerful, transparent and, above all, effective and cost-saving tool. Crucially, it goes hand in hand with our goal of improving customer experience.
The automotive industry, as in the case of Maserati, recognised the power of configuration over 30 years ago. The Italian car maker offered potential buyers the opportunity to have more input and control in their purchase through configuring their own dream car. On the one hand, this involves the customers in the buying process from the outset, connecting with them on an emotional level and, on the other hand, it significantly reduces production costs. After all, if we were to build cars today the same (outdated) way as we do with real estate, a mid-range car would cost us around 250,000 euro to produce.
The benefits of merging property configuration and e-commerce
PROPSTER has embraced the changing consumer habits to combine e-commerce methodologies with online configuration, in one online platform.
In the apartment configuration process, for example, the purchaser is invited to log into the platform and then view various product options before configuring the fit-out and overall appearance of their future apartment. Within this process, each customer is given a choice of 4 to 8 fit-out options for each product category (whether it’s wall colours, door types, flooring or furniture sets). The options presented to purchasers are determined by the developer in advance.
It’s important to avoid a sensory overload caused by too much choice whilst also offering ample and suitable choices to purchasers in order to reduce customisation requests that can be costly and slow down construction progress.
The studies within our platform revealed that when offered such an optimal amount of product options through the online configurator, 80 to 90% of purchasers make all of their choices within the platform, without requesting customisations. It happens because the buyers are offered essential and sutiable products in a way they are used to seeing online. This process resembles visiting an e-commerce shop with a single difference: you can actually view your choice of products applied in your future apartment.
Another important aspect borrowed from e-commerce, is to provide the products with prices and details. In this way, you provide your buyers with the necessary level of transparency in terms of cost and supporting information. It’s a true blessing if a property developer manages to avoid one-off customisation. This is especially relevant when it comes to developments with a large number of units.
Configuration is more than a nice option to offer purchasers, it actually works well in practice.
Yet at the beginning, our idea to accelerate the digitisation of property development was met with consternation and ridicule: ‘Online configuration of property?’ ‘E-commerce methodologies?’ ‘The entirety of the project life cycle managed through a single platform?’ ‘Surely that can’t work’.
In retrospect, we’re pleased that we didn’t let the doubters discourage us from implementing our vision and creating a platform that actually solves existing problems that have been holding the real estate industry back.
The pain of managing large scale residential projects (100+ units)
Let’s take a closer look at the benefits of offering online configuration for property buyers. Say you’re developing a property with 100 residential units (or more) and are wondering how to offer additional value that justifies the high cost of individual properties. Or you’re already planning to provide buyers with fit-out and furnishing options but have concerns that the process will turn into a customisation nightmare.
Potentially it’s a scenario to become true, as the larger a project is and the more units it has, the higher the probability that execution errors may occur, or buyers request more one-off customisations. To get a realistic picture of the additional costs you may incure, as well as the savings you can achieve by offering in-house configuration, check out our savings calculator.
Since 2017 we’ve been improving our platform so that property companies can run projects smoothly, regardless of their size and complexity. All documents, communications with stakeholders, choices & configuration preferences are kept inside the platform. Property managers have access to this information at any stage of the project lifecycle, it guarantees a more accurate way of managing large- scale projects.
We’re also acutely aware that many property developers still rely on Excel for managing projects. Let’s be honest, above a certain sheet size the ease of use begins to wane. For all of its useful features, Excel is certainly not the most user-friendly or efficient way to manage complex real estate projects. Its use often results in a loss of overview and, potentially, a nervous breakdown. In all seriousness, a specialised system is the most effective and hassle-free to manage your projects going forward.
The full cost overview by means of configuration
To sum things up, with PROPSTER we’ve combined configuration with e-commerce to improve the property purchase & management process, including all the aspects in one platform:
- Creation and exchange of documentation
- Online configuration
- Project handover and defect management.
The big goal we are chaising is to simplify the work of project developers, create transparency for both parties and involve the customer in the process from the outset. At the end of the day, the buyer or end-user is our focus. Thus, with PROPSTER, the buyer has anytime access to detailed information about prices and product information on fit-outs and furnishing options as well as information on construction deadlines and progress.
For many buyers, the purchase of a home is the most significant investment they will make and it’s therefore important that we reduce information asymmetries. Online configuration and product selection help the buyers get the full cost overview of their future apartment in a detailed and more realistic way.
The buyers of tomorrow are today’s digital natives and are therefore comfortable completing their purchases online. If you’re late to the “digital native bandwagon” as it relates to property, you’ll be left behind. If you get on board with e-commerce and online configuration now, who knows where you’ll end up? Maybe, you’ll be the first real estate developer to offer configuration of the property on Mars.
Without any doubt, online property configuration is here to stay. If you’d like to delve deeper, we invite you to request demo access today and trial PROPSTER for 14 days, completely free of charge and obligation.