Burgeoning demand of housing in tier 2 and tier 3 cities post COVID-19, low interest rates, return to office for a number of businesses as well as the growth of physical retail with people stepping out to shop, are just some of the factors that will fuel the growth of the real estate sector in 2023.
A Reuters report suggests that housing prices are expected to rise by 7.5% in India in 2023, higher than the inflation rate predicted in 2023 (which is at 5.14%).
Here’s a look at the seven marketing trends that will fuel this growth.
Emerging technology will continue to generate demand for real estate as a category in 2023. We are already seeing people buying land on metaverse through NFTs (Non-Fungible Tokens), and this trend will grow as people will see this as an investment opportunity and try to earn revenue out of renting out their land.
The use of AR/VR will become du jour in real estate as well as in other high ticket-value categories such as automobiles, fine jewellery, consumer durables etc, as customers would like to experience the product from the comfort of their homes. Of course, in case of real estate, a purchase decision will be taken only post a site visit in 95% of the cases. However, at Columbia Pacific Communities, we have been able to sell units through a VR experience to customers sitting in faraway Paris.
And this, we believe, is the power of VR.
The influence of influencer marketing
Recent reports indicate that the influencer marketing industry will grow at 25% CAGR in the next five years and it will be a billion-dollar market in India. Why is this data point important for the real estate sector? Because growth in the housing sector is being driven by the Gen-z and the millennial audience, with those even in the 23-25 age group buying houses. This has obviously been a result of the pandemic, and the younger generation spending more time indoors, thereby seeking a home of their own. Low interest rates and the “high returns” nature of this investment category are the other driving factors of this post-pandemic trend. However, real estate brands need to realise that influencers – both micro and macro, are one of the most effective ways of reaching out to this consumer segment and earning their trust. And they are more reliable than celebrities to forge a connection with the young audience.
Until now, we have seen categories such as beauty and personal care, fashion and jewellery and gadgets and devices leverage the power of influencer marketing. In the new year, we will also see real estate as a category roping in influencers to craft captivating stories. Certain players such as House of Hiranandani and Lodha Group have already tapped into this trend. And more are likely to follow in the coming year.
The real estate industry is likely to see higher adoption in CRM (Customer Relationship Management) automation. Automation in CRM helps manage leads better and increases efficiency within teams by culling out only those prospects that are genuinely interested in a company’s product or services. As businesses grow and teams manage multiple projects across geographies, there will be a need to automate a large part of the pre-sales process within real estate, along with the lead nurturing process to drive higher conversions.
Real estate as a category has always had a reputation of hard-selling its products, and being very aggressive with its communication. The industry which used to largely focus on offer/deal led communication to create an urgency in the market particularly at the time of launch, will gradually pivot to soft selling. This is because, the post pandemic consumer, who is spending a lot more time at home, is a more discerning one. Hence, the focus will be on creating a unique value proposition to cut through the clutter and offer the same to the customer through meaningful communication. For leading brands in the space, there will be increased focus on educating customers through content creation, such as whitepaper etc, and building advocacy in the category.
The Fifth P of Marketing
“Personalisation” is being touted as the fifth and one of the most important Ps of Marketing. Fortunately, for marketers, this is not unachievable today, given the amount of data one has access to, and also thanks to AI. It is estimated that 80% of consumer today are more keen to interact and transact with businesses that personalise the experience and the communication for them than those that don’t. In the coming year, more and more real estate brands would get into persona-based marketing, as opposed to taking a “spray and pray” approach.
The real estate category is one of the biggest offenders when it comes to blasting off irrelevant sms-es and emails to users without really studying the audience profiles and whether people have a real need for their products. Real estate as a category, has primarily leant on mass marketing. However, that is set to change, with sophisticated real estate players understanding that over 90% of consumers find mass messaging both annoying and intrusive, resulting in a lowering of key brand metrics such as preference and affinity.
Focus on Referral Marketing
With stories of builders not handing over projects on time leaving home buyers high and dry, and developers cheating customers of their hard-earned money, trust is a depleting currency in real estate. Yet, trust is the most important element in a high-ticket value category in which customers invest a large portion of their lives’ savings. Real estate players will realise that referral marketing or word-of-mouth marketing can unlock huge growth potential, provided they are being able to create superlative customer experience and delight every customer.
According to a Nielsen report, 92% of customers are more likely to buy a product basis a friend’s recommendation than by seeing an ad. At Columbia Pacific Communities, a sizeable number of our customers have been acquired through a referral programme. The cost of acquiring such a customer is low even if you pay a referral fee and referral customers are usually very loyal to the brand. So, it’s a win-win.
And finally, in 2023, the category will mature and shun the exaggerated style of advertising that hooks the customer at the beginning, only to disappoint her later. Consumers today value authenticity more than anything else. And hence, real estate brands will shift towards crafting communication with a WYSIWYG (What You See Is What You Get) approach. Tall claims, fancy set-ups, adding fluff are all passe. In the brave, new world, the product will do the talking. And an authentic way of representing the product and the brand story would be a real estate marketer’s top priority.
Views expressed are personal.