The Internet of Things, or “IoT” is a not a new concept but it is definitely making waves in recent times. Fundamentally, IoT is a concept where every day inanimate objects or devices have the ability to communicate and transfer data over a network often without a need for human-to-human or human-to-computer interaction.

This concept of network connectivity and remote data exchange has also been coined as the “Fourth Industrial Revolution”. Widely used in manufacturing, logistics, farming and even healthcare, vast improvements in inventory/ livestock management, product/ patient monitoring and even distribution tracking has benefited these industries recently. A major example would be the automobile industry where automobile manufacturers have integrated data devices embedded into key parts of their cars when not only it allow individual cars to be easily traced anywhere globally for the dispatch of a recovery service upon a breakdown, it also allow individual parts to alert the mechanics on wear and tear or near malfunctions during a routine servicing.

With such advancements associated with the IoT, it is not surprising that this next wave of technology is to be explored and implemented to benefit the stakeholders in the real estate industry.

Going beyond “smart homes” and buying things online

For everyday consumers and users of real estate, the impact of IoT remains relatively nascent. The cynic in us might think technology is mostly marketing and hype while the concept of connected sensors and smart devices making decisions without human input may not fully benefit an individual. However, despite Singapore’s smartphone penetration the highest globally, we may not be fully be aware of the impact of IoT and the possibilities behind it.

Focusing on the residential sector, the ideology of a smart home gets floated by property developers as a product differentiator or as a marketing spin. More often, new residential projects are equipped with “smart home” features that allow the remote access of climate control devices, the operation of certain appliances as well as the operation of home security and monitoring devices. These features are generally only the tip of the iceberg as what the IoT can offer to the residential market.

Smart home products are already on the increase in this industry. Constantly, these devices are generating data, receiving information in real-time from anywhere, at any time. With the right use of data analytics, daily movements and patterns can be analysed to create bespoke comfort settings for each individual. Appliances will be able to suggest entertainment to the occupants, monitor the level of key groceries and make an order to the online grocery store when required, even make you a cup of coffee at an appropriate time. Smart home products will circle around the offer of unprecedented technology, so much more than the hardware that one may see.

In this ageing population, a smart home can offer the benefits of the ability to monitor movements of the aged occupant as well as tracking the vital signs of the occupant to be monitored remotely by the family doctor. Toilet fittings can be able to analyse urine samples upon usage and the data can be supervised accordingly. In addition, home security systems can also be connected and configured to send a message to the consumer’s smartphone via the mobile network remotely if the user is away from their home.

Generally, the examples are endless and all we can predict is that connected devices will likely creep into most businesses, especially into the business of retail.

Massive consumer behaviour changes towards retailing in recent times have also have made an immediate impact on the traditional retail businesses. Retailers as well as landlords are forced to integrate e-commerce into their business and explore multi channels of retailing or omni-channelling in order to stay relevant.

Based on a report by Google and Temasek, it was mentioned that Singapore’s e-commerce market will be worth US$7.4 billion by 2025 and online transactions will make up 6.7% of all retail sales. Currently, the market is only estimated to be just US$1 billion with a market share of only 2.1%.

Retail mall owners and retailers are thus encouraged that traditional shopping remains highly relevant at least for now and all that matters is how to maximise the concept of omni-channelling of retail as well as leveraging on the possibilities of the huge amount of data from consumers and their patterns. Assisted through the technology such as Beacons or Radio-Frequency Identification (RFID), every shopper with a smart phone can be alerted by any promotions by specific shops the moment they are in proximity of the retail mall. Through data analytics, a personalised shopping experience can be provided to each individual shopper by respective shops based on their past patronage and product recommendations can be made based on the recent items purchased or even by online shopping. Personalisation is touted to drive the retail market as it is observed that consumers are overall getting fatigued with the myriad of choices in the market.

For example, based on a shopper’s previous visits and transactions, the shopper can be alerted of a freshly baked batch of baguettes from a baker previously patronised, and a recommendation of cold cuts can follow suit to go along with the purchase. In addition, a picnic basket set from a certain store at a certain colour could also be alternatively suggested based on the consumer’s transaction patterns.

For the retailers, understanding consumer’s preference and habit is key to their store product and inventory. Smart inventory management could also be implemented via IoT and the logistic companies.

What does it mean for the real estate industry?

Opportunities are abundant for the real estate industry with IoT. The large amount of information arising from user activity and preferences allows building owners and managers to understand their tenants as well as their building users.

Cost management remains high on the agenda for building owners through cost efficient building management. Building management systems can be programmed to autonomously sense, communicate, analyse, and react to the occupants and other machines in a nonintrusive manner. This will and already have made a significant impact on the Corporate Real Estate industry. Continuous monitoring and predictive capability of IoT-enabled buildings can allow the building manager to anticipate any repairs or maintenance issues by enabling a building manager. Preventive maintenance rather than corrective maintenance can be conducted way before any defects occur, even before the occupiers can notice or highlight. All these features will be able to allow building managers and owners focus on cost savings on asset management and possibly pass on the savings to their tenants.

With IoT, all the information collated can also be used to boost marketing strategies and therefore possibly increasing revenue. Residential sales marketing may be geared to identify potential buyers upon their visit of the show-flats. Data analytics can possibly suggest a learned suggestion on the buyers’ lifestyle through one’s travel or shopping patterns. Previous show-flat visits can also be tracked to learn about their housing size enquiries as well as their specific requirements. The marketing personnel can thus be advantaged to approach their prospects with the right products in lieu of a better success rate.

As the business of retail is constantly evolving, retail mall managers or landlords are able to review and work with their tenants to refresh their tenant mix and offerings based on consumer patterns and traffic analysis. Retail malls who are IoT-enabled are thus able to remain relevant and be ahead of the challenging retail industry.

Is the real estate ready for the Internet of Things?

Remarkably, this is an industry conundrum. Critics might be cynical that technology is predominantly marketing and hype. There is also an overall concern surrounding the security and privacy of the data that is being transmitted and shared. A majority may frown on their movements or activities being tracked like a “big brother” and at the same fret on data falling into the wrong parties to be utilized for the wrong use.

Generally, as Singapore is all ready to embrace and embark into a Smart nation. After all, the Info-communications Development Authority of Singapore has envisioned that ‘’A Smart Nation means people and businesses are empowered through increased access to data, more participatory through the contributions of innovations and solutions, and a more anticipatory government that utilise technology to better serve the citizens’ needs’’

The real estate industry as such can ride on with the data resources alongside with this nationwide push and delve further into maximising the benefits of this technology wave for both consumers and providers. After all, the opportunities are deemed to be boundless.