However, one change that has been particularly influenced by the pandemic is a consumer revolution, with consumer priorities and expectations for housing evolving as people made lifestyle adjustments. Yes, issues such as rising house prices and an uncertain economic climate remain significant issues, but the evolving landscape of the property industry also represents opportunity for estate agencies from the new type of consumer.
Shifts in consumer behaviour
PwC, in its latest Global Consumer Insights Pulse Survey, noted that consumers had been forced to become more resilient, both individually and collectively, as a result of the pandemic, adopting new habits, many of which appear to be sticking around, something that the firm suggests signifies a “historic and dramatic shift in consumer behaviour”.
It’s quite significant, as consumer behaviour usually doesn’t shift all that rapidly, adjusting only in small chunks. The pandemic, however, added fuel to fire, both in terms of a digital transformation affecting how we work and live, but also what people want out of a home.
It would likely come as little shock to most that being stuck at home forced people to revaluate what they’re looking for. In an age where space is at a premium and one in which we’re increasingly reliant on technology to communicate – along with the return of the commute, that has had many homeowners and tenants considering more flexible/hybrid working option – location, location, location has itself become more flexible.
The consumer data company GWI acknowledges this change, noting in their 2021 consumer trends report that “consumers’ attention has shifted as the internet has swept in to help us manage our lives more effectively, and their behaviours have shifted too.”
It’s the young who lead
In many respects, it’s the younger generations who are driving change that is impacting across the demographic spectrum. The next big grouping that the property industry should have their eyes on is Gen Z – this group is aged roughly between 16-24 and have been described by the global professional services firm EY as “the next big disrupter” in the sense that so much is happening, politically, socially, technologically, and economically, which Gen Z have grown up around, but particularly with regard to how they interact with technology as ‘digital natives’.
With so many services now available on mobile and through apps, and with 75% of Gen Z consumers using a mobile phone or smartphone as their device of choice, the way forward is inevitably going to be tailored towards this demographic, which will drive change and innovation for all consumers.
But it’s not just technology where Gen Z are driving more changes, research from Zopa found that approximately one-third of Gen Zers already have savings of more than £1,000, and are the least likely generation to have any form of debt. With as many as 66% of Gen Zers already saving for a deposit for their first home, this puts them in a good position to buy a property before the current average for first-time buyers, approximately 34 years old in the UK.
Stepping up a generation, millennials (roughly aged between 25-39) have also seen a shift in perspective over the past year, with the challenges of the pandemic influencing millennial priorities when it comes to homeownership. Such that a Dynata survey found that 13% of millennials were directly inspired to buy a home for the first time because of the pandemic.
And whilst that may not seem like a noteworthy increase, it may well signal the beginnings of a shift in behaviour amongst the generation which has often been dubbed Generation Rent.
In fact, when this view is overlaid with research from Aldermore Bank, we’re seeing the very real beginnings of a shift in mindset: this study found that millennials were the biggest savers during the pandemic, saving more than any other group and increasing their personal savings by 32% in 2020.
Technology grows up
However, the younger generations haven’t been alone in changing. GWI considers 2020 to be “generation-defining” for Gen X (40-55) and Baby Boomers in particular, as from a digital standpoint the pandemic has had a more profound impact compared to younger generations. The same GWI report also found that 36% of Baby Boomers (the generation aged roughly between 56 to 74 that have traditionally been slower to embrace the digital age) feel more confident in using new technology in Q1 2021, an increase of 10% on Q2 2020.
For the property industry, it might be interesting to see that another survey on real estate trends found that 92% of Baby Boomers want virtual options on property viewings to continue beyond the pandemic, with 81% of Gen X and 86% of millennial consumers also expecting virtual viewings to continue, further indicating that these changes are sticking.
What next for the 2021 consumer?
There can be little doubt that consumers are changing, whether it be their habits or their priorities, but if 2020 taught us anything, it is that while all generations of consumer are unique, they are being drawn closer together with a shared set of expectations and values. This is a point raised in an Accenture research survey which found that half of all respondents across 22 countries and 25,000 respondents felt that they had changed significantly over the past year.
What this has led to is a new type of consumer, one in which the distinct values and expectations across multiple generations coalesce into a more singular customer type, what we call the TECTAC consumer. The TECTAC consumer is tech savvy, experience driven, credibility focused, transparency seeking, availability demanding, and community valuing; and when it comes to their expectations of digital transformation in the delivery of services by suppliers, consumers across the generations are steadily becoming united in these values.
This universal transformation gives agencies the opportunity to reach buyers of all generations – because even though different generations have different expectations of their next home (such as scaling up, moving closer to schools, or simply getting out into greener pastures), how agencies reach them is increasingly tied together in the expectation of a richer digital service delivery.
With so many prospective and existing home buyers and owners currently revaluating what they’re looking for in a home, it will surely lead to a long-term shift in the market (to succeed what is currently happening) as more people seek to make a home that fits closer to their newfound priorities.
Whether it is, for example, the ability to work from home or on a more flexible basis, or otherwise, simply how this new consumer engages with the property sector to buy, sell and rent houses. The 2021 consumer quite possibly has changed for good, and that’s an opportunity for estate agencies with the right technology behind them to embrace the digital revolution.
Interested in more insights on how consumers have changed? Download your free copy of Reapit’s newest report on the Consumer (R)evolution: how to attract, engage and retain the 2021 consumer.
*Mark Armstrong is the Chief Executive Officer of Reapit