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No industry, including real estate, is safe from the disruptive innovation of the age of technology.. A growing number of proptech companies are challenging industry incumbents to embrace digital transformation or face the disruptive effects of powerful digital technologies. Let’s explore how virtual tours, digital twins, and other proptech trends are spurring digital transformation in real estate.
What are Digital Twins? Why are They so Disruptive?
Simply stated, a digital twin is a living digital model of a physical space in real-time, based on operations and environmental data collected from IoT sensors and devices.
A digital twin is distinct from some of its earlier precursors, such as digital replicas and digital shadows. The key feature of the digital twin is the dynamic, symbiotic relationship between physical and virtual objects, with automatic data exchange. This eliminates the manual input of data and allows for real-time insights, enabling better decisions and planning.
The IoT sensors that allow digital twins to be modeled can be configured to capture a wide range of different data points related to the environment, energy consumption, and operations of a physical space. Moreover, these sensors employ innovative edge computing practices to collect and represent data extremely efficiently.
Business leaders who employ digital twin technology will immediately see how environmental factors such as humidity, weather, and temperature affect their products, properties, or operational practices.
Companies that take advantage of this sophisticated business intelligence data are more likely to control environmental externalities and create new business processes that reduce costs and improve productivity, giving them a leg up on competitors.
According to Willow, Digital Twins optimize real estate assets and income. Asset managers who take advantage of this technological opportunity will gain advantage. Read more here to learn about how asset managers can best implement digital twin technology on their networks.
How Digital Twins Drive Innovation in Real Estate
Digital twins allow real estate developers to identify inefficiencies, thereby reducing construction and operational costs when building new properties. By creating a digital twin of a specific property, developers can model the environmental and operational outcomes from specific design and construction details. PropTech giants like Matterport, regarded as "the Kleenex of reality capture" due to its brand recognition and ubiquity, have already brought these operational benefits to a large number of companies.
Moreover, digital twins allow real estate companies to reduce an existing property’s environmental impact, lower its energy costs, and reduce operational inefficiencies by providing real-time data related to these key areas. Decision-makers can then compare this data to a model that projects outcomes that result from different modifications to the property and learn the best path forward, all while limiting their risk, costs and reducing externalities.
Often, making a property more sustainable and environmentally friendly will allow firms to cut operational costs and take advantage of various government environmental subsidies and incentives.
How Digital Twins Enable 3D Virtual Tours
Since digital twins gather data through multiple IoT sensors, they allow real estate firms to develop truly immersive 3D virtual tours. These interactive virtual tours are a significant advance from the previous technology that was based on 360-degree video and panoramic photography.
Buyers are increasingly motivated to take a virtual 3D Tour of a property rather than seeing it in person, because it saves significant time and allows for careful inspection of every facet of the property.
It is only with a digital twin that a buyer can view a truly lifelike virtual tour, making them feel as if they’re actually inside the physical space of a property. Technology companies such as 3DVista and Ricoh Theta are well-known for providing immersive and imaginative 3D storytelling experiences. This allows real estate firms to present a stunning, realistic model of their properties.
Digital Twins and Virtual Staging
Creating a digital twin of a property also allows firms to offer 3D tours, complete with virtual staging. Traditional property staging refers to the practice of making a property as appealing as possible to potential buyers. It often involves placing furniture, decorating, and designing a property in a way that best highlights its value. Since traditional staging often involves the acquisition and placement of furniture, decor, art, and greenery in a property, it can be quite expensive and time-consuming.
Virtual staging is a powerful and cost-efficient alternative since it allows furniture and decor to be virtually placed in a property and viewed via an immersive 3D virtual tour. This allows sellers to easily and convincingly highlight the best features of their property. Prospective buyers can view the most compelling version of a property from the comfort of home, on their smartphone, computer, or tablet. Service providers like GoPropTech are also leveraging the benefits of digital twin technologies to produce virtual tours and virtual staging that are remarkably true-to-life.
The Digitization of Real Estate
Because young consumers increasingly prefer to make buying decisions online, virtual tours and virtual staging will be a popular sales and marketing tool for individuals, startups, and real estate firms. As this piece in The New York Times explains, many of the traditional assumptions about marketing are based on the consumer behavior of baby boomers, who aren’t digital natives and are less familiar with digital technologies.
On the other hand, Millennials, who now are 75 million strong, are the new generation of property buyers. Millennials are all too comfortable making buying decisions online. Many of them prefer to!
Couple this with the fact that VR and AR technologies are improving exponentially, offering increasingly compelling virtual experiences, and it’s easy to understand why the future of real estate is digital.
Why Companies Across Different Industries are Being Pressured to Embrace Digital Transformation
Recognizing the inevitability of digitization, leaders in the real estate industry and innovative proptech companies are on the leading edge of digital transformation trends. Their initiative is spurring innovation in other fields as well.
Many manufacturing companies integrate digital twin technology into their factories to streamline their supply chains, improve quality control procedures, and lower operational costs. That’s because digital twins allow manufacturers to collect data about a product and its parts throughout each phase of the manufacturing process.
For example, if a defect is noticed in a product, that product’s creation can be traced back to the exact manufacturing plant, conveyor belt, and machine where it originated. They can then gather operational and environmental data from the specific time at which the product was manufactured. That data might show an increased temperature or humidity that contributed to the product’s defect or a mechanical glitch in one of the manufacturing devices that needs to be corrected.
Digital twin and 3D virtual touring technologies are already revolutionizing real estate and will have a catalytic effect on the digital transformation in other industries.