Real estate is quickly becoming a numbers game. Of course, at its core, our business is about helping clients buy and sell houses - and it always will be - but the method we use to find those clients and how we go about pricing their homes or the homes they want to buy involves a whole lot of analytics. Even running a modern real estate brokerage is heavily steeped in numbers.
If we take a holistic approach and look at the entire evolution of analytics in business, we see that we've come quite a long way - but there's still more work to be done. Think back to the early 1990s when basic back-office reporting reigned. Numbers weren't connected to the front-office business and were used mostly to support internal decisions. Let's call this the 1.0 phase of analytics.
Next, during phase 2.0 in the early 2000s, companies like Google and PayPal started to look at large amounts of unstructured data. Thus began the rise of data scientists and, under their watch, data management activities took on increasing popularity.
Enter phase 3.0, when big companies started adopting big data. Conglomerates hired data scientists and acquired smaller analytics shops to harness the power of their analytics.
Finally, we reach phase 4.0, where we are today. With the onset of predictive analytics and cognitive analytics comes machine learning. Suddenly, artificial intelligence is no longer a plot line in sci-fi movies, but a viable decision making tool for business. Combine the ensuing age of AI with a justifiable obsession for big data and analytics, and business leaders must now confront the reality that when the process of analyzing analytics becomes fully automated, machines may dictate our next move.
But are we as a business collective ready to trust what these machines have to say, and is real estate as an industry in line to embrace this technology?
If we take a cue from other booming industries, the answer is yes.
In advertising, AI has certainly been embraced, though it's still niche marketing for now. In November 2017, BMW created a car inside Snapchat that was designed with life-like precision. Unlike Snapchat's dancing hot dog or AI bitmojis, this was the first product to be translated into the augmented reality world as an ad, in this case, to commemorate the launch of the BMW X2. Users could virtually walk around the car, see its features with exquisite detail, change its color and interact with the product in an entirely new way. November 2017 also saw Adidas release a mobile app in partnership with Salesforce. The app evolves as a consumer interacts with it, tailoring to the preferences and behavior of the user to create a highly personalized mobile experience. Embedded artificial intelligence learns about the user's specific predilections to show him or her customized product recommendations, articles, blog posts, videos and real-time updates about the user's favorite sports and athletes.
So, if advertisers, tech companies and social media giants are embracing AI, can the real estate industry in particular embrace it, too? If we take the real estate industry as an example, this could mean mobile home-search apps that get smarter as you search for a particular type of property. Imagine mobile-friendly websites or apps that customize the home-search experience based on the preferences of its user: Are you looking for a vacation home in Montana? Are you a first-time buyer? Are you interested in properties that feature swimming pools in the backyard?
Then, each time the consumer logs in, he or she is delivered information the app already knows is important to the consumer in his or her pursuit of a home.
An AI-enhanced real estate industry could also mean agents advertising homes using virtual reality, where users can experience a home just like they experienced a new BMW on Snapchat, interacting with the property through the smartphone in their hands. Maybe there's staging involved, too, or even remodeling. A user can eliminate a wall, add a coffee table, change the paint color in the living room and begin to virtually visualize the property as his or her own.
In a 2017 report by PwC Global, the firm estimated that by 2030, AI would contribute $15.7 trillion to the global economy and by the same time, local economies would see an approximate 26% boost in GDP from AI activities. The study confirms that the central question surrounding AI is not its viability, but rather its ability to be used responsibly.
Beyond the idea of AI being a science not fully understood, it's also an initiative that must be deployed for the benefit of the real estate consumer and not as a harbinger of damaged goodwill. Data leaks and hacks have been consistent headlines in 2017, and if the real estate industry is ready to embrace AI, we must do so responsibly and with the consumers' safety in mind.
In order to use it efficiently, though, skilled employees with both domain and data expertise are essential for its successful implementation. Customer data must be protected; AI technologies must be reviewed and updated as the science behind them develops. Do you have the necessary talent in place to properly control AI technology? That answer will decide whether you're ready to have an AI-enhanced system at work.