Why Is Real Estate E-commerce
Like the Fashion Industry?

Style De Jour...  As John Hagel, our keynote speaker at the PikeNet Forum said last week, "E-commerce and the fashion industry are similar because both are driven by enormous uncertainty," which naturally leads to extreme focus on the style de jour.   That's why it's so important to step back in order to appreciate the larger canvas.  So here's the picture that I took at the Forum.

Differing Agendas...  We heard about widely varying strategies pursued by owners (AEW, Divco West, Lend Lease, Lincoln Properties, Shorenstein), tenants (Amazon, Bank of America, Cisco) and service providers (CB Richard Ellis, Colliers International, Cushman & Wakefield, Jones Lang LaSalle, Staubach, Trammell Crow).  Although nobody officially spoke for the industry consortiums (Constellation, Octane, Office Technology Consortium, and PACT -- Pension Advisory Committee on Technology), members of each were represented.  Yet there was very little consensus on specific Internet applications, revenue models or implementation timeframes.  Only a general commitment to "an industry platform open to all."

Cost Escalation... Even though John Hagel argued that the Internet has triggered the "systematic reduction of interaction costs," none of our speakers felt that the Internet had reduced their overall costs.  In fact, quite to the contrary, all firms felt burdened by increased technology expenditures.  So the question that each asked was, "Who will absorb the costs of making the industry more efficient -- brokers, landlords or tenants?"     Everybody wants the other guy to pay to make transactions "quicker and faster."

Adoption Challenge... As Mark Rose, Chief Innovation Officer at Jones Lang LaSalle, stated, "Our challenge isn't technology, it's cultural change."  That's why JLL wants to see funding for seven years for any new web-based service.  There's no quick hit.  It will simply take many years for the industry to change.  So how do we make progress?  Perhaps, Ian Cameron from the IDRC Foundation put it best when he urged "implementation through prototyping." ... (To be continued next Monday.)

--Peter Pike / ppike@pikenet.com