A Dose of Digital Reality for Builders?

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They may be a little late to the game, but
John McManus, publisher of BuilderOnLine.com,
is betting home builders are about to get a dose of digital reality.  McManus, reporting from the Consumer
Electronics Show (CES) currently underway in Las Vegas says the digital age has
already transformed the purchase of goods and services; the National Retail
Federation says 174 million Americans shopped both on-line and in stores
between Thanksgiving Day and Cyber Monday, and 51 million shopped only in
stores. But 58 million confined their shopping to their mobile phone, PC, or
laptop
.  Last Friday’s jobs report would
have met the most cautious of analysts’ estimates for 161,000 new jobs were it
not for a loss of 20,000 in the retail sector.

Those figures are, in essence, a payoff for the billions of dollars
stores, even those that also have a brick and mortar presence, have invested in
making on-line shopping a comfortable and rewarding experience for consumers. But
so far, McManus says, residential development and home building have been
shielded from the intensity and pace of change that has taken place in other
consumer market places.  Now those changes
are coming, and at unnerving speed.  

He describes three areas where technology will be quickly
changing residential building operations.  The first, and the most dramatic use of
technology, is a new model marketing newly constructed homes.  Big builders are trying to drive down costs to
bring more affordable homes to market.  One area of focus is the buying experience itself,
and the resources builders currently spend on it. This includes building model
home parks and sales and design centers to be the retail, consumer-facing
dimension of their operations.

McManus suggests channeling a big chunk of those resources, he
says 75 percent, into “technology and data-enabled virtual experiences” for
consumers.   He quotes a discussion with
a CEO of one of the major home builders he met at the CES who said building only
one model home at each residential development, rather than four, changes the
game economically. “What we’re investing
in building, maintaining, warehousing, merchandising those models in all of our
communities, we could instead develop rich experience with augmented and
virtual reality tools.  It’s time for us
to catch up to the rest of the way consumer businesses go to market, instead of
doing this the antiquated, far more expensive way that we’ve been doing.”

So, McManus says, look for a sea-change in production home
building, with model and design center investments diverting into
technology-enabled buying experiences. He gives no specifics, but we envision standing
in a builder’s lone model home, a center entrance colonial perhaps, and using a
virtual reality device, tour each of his other three home designs.  Or, with a methodology already in use by one
quartz counter manufacturer, scanning a room in the model then test driving various
trims and finishes.

There are few digital or real-world markets that don’t depend on
some form of customer ratings or reviews, and McManus expects technology will
soon deliver this for homebuilders as well. 
One new entry is the provision of a star rating for energy and water
usage performance and, perhaps within months, we will see introduction of a
standardized rating and review system for builders.

Another change underway is less dependent on technology than a
result of it; specifically, the shift to on-line consumerism mentioned
above.  This “Amazon-ing of America,” as
he calls it, is having a profound impact on traditional shopping malls.  Builders are looking at failing and abandoned
ones as so much real estate, ripe for repurposing.  The generally good locations they inhabit
give them a new future as “higher-density, mixed use, attainably-priced
complexes perfectly situated for many metro area’s housing-starved workforce
populations.”



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