By Steve Coulson, co-founder and CEO at Kitt
Providing an end-to-end service is not a new concept, with industries such as food delivery and retail becoming disrupted by this model. With companies acting as the servicing middle-man providing everything from beginning to end, the average consumer has grown to now expect this all-inclusive experience in their day-to-day life. However, the commercial property industry has been trailing behind.
Today, the ease of experience has become the key selling point for consumers and this is no different in the world of real estate. By adopting an end-to-end approach, the industry can capitalise on operators’ unique ability to automatically match supply and demand, verify the supply side for quality and be able to offer transparent pricing of the whole process, making purchase decisions easier.
Marketplaces vs Managed Marketplaces
A marketplace is an example of an end-to-end service that connects two or more distinct types of participants to enable transactions, i.e. buy and sell products or services. However, a managed marketplace creates a ‘network effect’ where marketplaces can improve the customer experience by being more involved in the execution of transactions. We see this in the food delivery space. Platforms such as JustEat and Grubhub were created to successfully connect restaurants and consumers from their phone. This disruption then went a step further when organisations like Deliveroo and UberEats emerged with the ability to not only match supply and demand, but offer a superior experience with delivery and real-time tracking.
The challenge our industry faces is that buildings are fixed and can be costly to change and embrace technological advancements. An HBR article noted “the more difficult the barrier, or the more barriers a disrupter faces, the more likely it is that customers will remain with incumbents”.
Due to property owners often being individuals, investors or owners that have been unchanged for years, they’re usually not prepared for, and have been slow to react to technological transformation. However, by embracing technology, they can compete with the big players with an experience optimised at scale. . Take WeWork- a geographically scalable product that provides a high-quality mass offering across multiple sites, all accessible via one marketplace platform. However, what is missing in this service is the personalisation aspect of these sites which doesn’t allow for a company to have its own bespoke front door.
Personalisation is key
As we return to the office, more and more organisations are considering its value. The pandemic has changed how, when and why we work and instead of using the office five days a week, organisations are now using the space as it suits them. As a result, we are seeing a move away from a one size fits all model towards a more personalised, tailored space specific to a brand. This has posed difficult challenges for independent landlords as the personalisation aspect has limited their tenant pool.
What landlords can take from the successes of other managed marketplaces such as Deliveroo and Etsy is utilise the resources available to them through these platforms. End-to-end managed office platforms operate in a similar way in that we are able to automatically match supply with demand, whilst ensuring a bespoke service. This allows agents and operators to work together, let landlords deliver a product and allows us to take care of the rest – creating exciting and tailored workspaces for tenants.
Silicon Valley investor Bill Gurley describes disruptive marketplaces as an opportunity for creators to connect economic traders that would not otherwise be connected – unlocking potential that did not previously exist. The same applies here – there’s such a valuable opportunity for the office industry to connect traditional landlords with a new type of tenant that has grown to expect more..
The property industry needs to acknowledge the benefits of adopting a marketplace mindset that will allow them to take full advantage of the ‘network effect’ to extend their product, have instant access to an established network of buyers and sellers and to be able to offer competitive market pricing – with little interaction needed between the landlord and sellers themselves.
