The rising popularity of coworking spaces all comes down to one significant factor. Flexibility.
Looking back, it’s staggering to think of how few organizations in the commercial real estate sector actually considered flexibility to be something worth offering to such a large and lucrative market.
But that’s exactly what disruption is, it makes us look back and wonder how we ever managed without it.
And as with any disruptive trend or movement, everyone wants a piece of the action. Everyone has seen the amount of flexibility that is offered in the coworking sector and wants it for themselves. The origin of this movement is undoubtedly in coworking, but perhaps the naming is already outdated. As the desire for flexibility expands into all company sizes, it’s workspace as a service that clients are really looking for.
But flexibility comes at a cost. Most tenants cannot afford the current cost of these flexible workspace services, even when it is offered. This problem brings a big opportunity for the sector. There is a large market with a clear need that is not yet being satisfied because the costs are simply too high for the majority. It’s down to the most competitive companies in the industry to innovate and introduce new processes that reduce the cost of flexible workspace. These companies will be the winners and take the lion’s share of the market.
As has been the case for many other industries, it’s time for commercial real estate, a traditionally slow-moving giant, to look to tech as an enabler. As unlikely as the partnership may seem, disruption demands change. Workspace providers need to find ways to automate processes, cut costs, create something new – ultimately compensate for the costs of today’s tenant demands. If they want to remain competitive, they need to change up their usual approach to business.
How can technology help workspace providers cut the cost of providing flexibility?
First and foremost, everything needs to be available online.
A few photographs and a building description are not enough. Millennials are becoming the largest market segment and are known as ‘digital natives’. They are accustomed to not only finding but also transacting everything they need online. They are not willing to visit 10 different office locations for viewings. Unsurprisingly, 99 percent of this generation start property searches online and are also comfortable making big-ticket purchases via websites. The oldest millennials are about to turn 40 and many are in decision-making roles within their companies. It’s time for the commercial real estate sector to pay attention to their needs and expectations.
This growing market segment needs more information to be available online without any human interaction. Though this might seem demanding, remember they are also willing to agree to more without your teams even saying hello to them. There are many different ways for meeting the needs of this market, but what we do know is that access to information and a great user experience online are paramount.
Go beyond the standards of the last decade and think about how you can let this virtual audience experience your property portfolio at a distance. Not only will it please your clients but it will reduce your overhead. Think about how much time can be saved by having those first property viewings take place without the involvement of your sales team. That doesn’t mean they are no longer needed – to the contrary, they can pick up stronger leads that technology shortlisted for them and focus on closing the deals.
How do you reduce the cost of workspace flexibility in design departments?
Offering flexibility does not mean every client needs a fully customized design project. When it comes to offering flexible office design we can look to other industries for inspiration.
Almost all car brands offer configurators. We all expect this now, but for many years there was no way to influence your own vehicle design online, on the go. Now there is choice and flexibility. But look closer and you can see that there are strict rules that govern what can be customized – and what not.
Modular design has allowed the automotive industry to offer flexibility to the end-user. Not only that – it has also given them the opportunity to up-sell the base product in order to extract maximum value from each sale. This method can be applied to the ‘workspace as a service’ offering in order to give clients choices without the costs of a custom project.
Experienced office designers know what most clients are looking for in an office and will be able to categorize these in a way that allows workspace providers to create an office design configurator.
How does this cut costs for design? With limited but flexible choices you can drive down project delivery times by having a fixed inventory of furniture and other assets, also benefiting from economies of scale.
In the not so distant future, there is a choice to be made about who uses these tools. Perhaps you can relinquish control completely and make a configurator available online so that potential clients can truly see what their office space could look like, complete with costing and delivery timelines. Something that is likely to appeal to millennials and reduce consultation time at the beginning of a project.
What about the data?
If a workspace provider is looking to introduce technology into their offering, it requires changes in processes but also a digitized understanding of the underlying real estate and inventory. This may seem daunting but if approached correctly, it can actually improve processes beyond the design phase.
The key to a successful implementation of technology in real estate is to keep a single source of truth that all stakeholders can eventually access. The data the design department use needs to match that in the sales team, the installation teams, and even maintenance. If workspace as a service is offered, all parties need to be on the same page. In construction, BIM is on the rise, and we need to take a similar approach to shared, widely available information during the building’s lifetime. Similar, but not identical. While BIM is squarely aimed at professionals, its “lifetime counterpart” needs to be easy to use and flexible enough to provide value in a wide range of decision-making processes
If companies wish to tap into the success of the coworking movement by offering flexible workspace as a service, they must first accept the need to change. Without evolving long-standing processes and norms, most clients will be out-priced or underserved, and even today’s largest companies will lose market share. What happened in other industries already shows us the impact new technology and great user experience can have – without these, millennials are likely to look elsewhere.