In this editorial, 2023 Awards Advisory Board member Kristopher Drey is talking PropTech. Drey, formerly Head of Product at Groupon, explains the promise and potential of property technology, for businesses and consumers alike. Keep an eye on the PropTech vertical at the 2023 Product Awards. Send Awards nominations to [email protected]
The PropTech segment has taken the lion’s share of the VC funding over the past few years, topping out in 2021 at over $30B raised. This is a booming and dynamic sector. What is PropTech? Simply put, it blends the physical world with the digital to create the “phygital,” layering digital technologies into and around a physical footprint. For example, leveraging IoT to create a smart building by placing sensors in a conference room that senses when a person comes into the room and then turns the lights on, opens the shades, and adjusts the HVAC, and does the opposite as the last person leaves the conference room. This not only improves workforce productivity but also energy efficiency and sustainability. PropTech is automating mundane tasks, and minimizing expenses.
I have spent the past 20+ years in digital product management and the last decade+ in the PropTech space. And I am deeply passionate about both of them. I have had the good fortune over the years to work on many exciting PropTech projects. I will highlight several of those in this post, including technologies like RPA (robotic process automation), immersive computing (AR/VR – augmented reality, virtual reality), smart speakers, and AI/ML (artificial intelligence, machine learning) bots.
On PropTech products that are changing the world
Now let’s dig into some of those cool PropTech products that are changing the world as we know it. Smart devices will make us more efficient and bring us closer to the customer. Meanwhile, thrilling the consumer with personalized and extreme conveniences creates unprecedented brand loyalty. Billions of IoT (Internet of Things) devices will fill apartments and offices. These devices can alert maintenance teams when an appliance needs service – based on manufacturer data, maintenance history, and usage data – to reduce further damage and to hasten customer convenience. Imagine if a device, communicating with a washing machine, used a resident’s calendar and activity history to automatically schedule a maintenance appointment. Then, it sends an alert when a service worker will be arriving. Or imagine smart appliances automatically ordering service parts when needed and having them delivered.
On immersive computing
Immersive computing is a complex innovation that combines software and hardware to change the way we see the world. In simple terms, Augmented Reality is seeing the world around you via a device that layers things over your real world view. (Think of Pokémon GO.) Virtual reality is using a special headset to see an entirely new world that is completely digitized and unique to your real world environment. The PropTech applications are many.
Imagine if a new maintenance worker was called to an apartment building that was having circuit box issues. Using an AR-enabled device, the worker could a digital overlay of the busy and confusing circuit board. The overlay would label every circuit and wire as well as provide step-by-step instructions on how to fix the problem. Think about the workforce productivity improvements and cost savings of reduced training times.
On collecting data for predictive analysis
All of those IoT sensors collect highly valuable user and behavioral data that could be used for predictive analytics. This is a powerful way to use past data to forecast future behavior. Who will renew or not renew their apartment or office lease? Who will buy which products at the mall, and when? Predictive analytics are at the core of data execution, driving advanced analytics to develop deeper personalization, or to make better sales recommendations resulting in significant cost savings and operational efficiencies. Based on accurate real-time forecasts, these models can anticipate what might happen to aid decision-making. Predictive analytics can forecast retail demand, optimize price inventory, determine potential apartment turnover, and stay ahead of ongoing maintenance needs.
Amazon has patented what they call the anticipatory shipping model. It uses big data for predicting what products consumers are most likely to purchase at specific points in time. The items are then sent to a local distribution center so they will be ready for shipping the moment they are ordered. In this way, Amazon makes use of predictive analytics to increase sales and profit margins while decreasing its delivery times and expenses.
And finally, another digital technology in PropTech is robotic process automation (RPA). Think about all the paperwork that is generated when a new company moves into an office building. The leasing agreements, code documents, building specifications, etc. Using RPA bots, the often mundane tasks of creating and/or filling out standard documentation can be automated by teaching bots to do these simple tasks for you. Copy/paste certain language from one doc to another. Collect data from a spreadsheet and add it to another document. Or log into an HR system to initiate new tenant contracts and automatically forward them to the right individuals. All can be accomplished with RPA tech.
On the potential of PropTech
Don’t tell me this potential is not exciting! On the B2B side PropTech enables tracking footfall at the mall to provide insights into where you should put each retailer. And PropTech puts smart speaker-equipped digital assistants in hotel rooms. These help travelers order pizza delivery or book theater tickets and arrange for transportation all at once. For consumers and businesses alike, the promises and realities of PropTech are improving the way we engage with properties.