Like all things technological, the “Internet of everything” (IOE) has great promise-both to change how residents behave and also to generate hype well beyond its reality. So, how do we separate the true promise from the hype and discover what really matters?
Looking at other disruptive technologies (cell phone GPS disrupting GPS device makers, Uber disrupting traditional taxi service, etc.) to see what separates those that really changed the game from the rest is very instructive. The best share a couple of traits.
First, they make things easier, cheaper and/or faster. Think about how streaming and other online media technologies have replaced much of mainstream physical media, such as print newspapers, magazines or music CDs. They supply us with content whenever we want it at a low cost.
Second, they create, and then are supported by, a true technology ecosystem. For example, the iPod begets iTunes, which then supplies the music to the iPod; smart phones were designed to support web-based applications and are now supported by millions of those apps; and streaming video provider Netflix produces exclusive, original shows like House of Cards, creating a reason for the public to purchase or continue to purchase a Netflix subscription.
Assuming that IOE ultimately delivers to both of those points, what’s it mean for multifamily housing? Let’s briefly look at why it’s likely to be useful to residents and operators alike.
For our residents, IOE translates to:
- Easy to use. I remember the first time I got into a car that started by reading the code from the key fob in my pocket rather than inserting a key in the ignition. It was not only different but so simple. The IOE promises some of the same ease of use for entering my apartment, the parking garage, common areas, etc.
- Money saving. Imagine if you could turn down your air conditioning in the summer when you leave and then turn it back on through a smart phone app 20 minutes before you come home. You arrive to a cooled home, save money and feel good about reducing energy use.
- Cool. We all have friends who just can’t wait for the latest gadget. They waited on a long line for the first iPhone, and they’re the first to upgrade. Or maybe that’s us. The point is that a segment of consumers enjoys being among the early adopters of new and interesting technology.
For, multifamily operators, on the other hand, IOE offers opportunity for:
- Added value. All of the factors that consumers care about that we mentioned above are areas where developers can potentially add value for their customers. By understanding what IOE benefits residents value, multifamily firms can ensure their apartment communities, units and services fit those needs, helping our residents feel good about themselves and their homes and saving hard dollars.
- Resident insights. Multifamily firms often survey residents and conduct focus groups only to end up essentially guessing at what residents really want. With the IOE, it will be possible to have concrete data on things like exactly which areas of the buildings residents actually spend their time versus where they say they would. Just like Vail Resorts can track the lifts and runs a skier skis, we could track entries, exits and time spent in various parts of the building, helping us figure out where best to invest dollars.
- Branding. Early adoption of IOE can add to the hip, forward-looking branding they may want for an urban development. As the IOE becomes more common, the practice will grow into mainstream development, as leading brands will not want to be left behind.
Donald Daviddoff is the founder of Denver-based D2 Demand Solutions, a management consultancy practice.