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Impacts of Technological Innovations on the Commercial Real (2)
Impacts of Technological Innovations on the Commercial Real Estate
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Introduction
Over the years, commercial real estate has continued to be the main contributor to the stability of the economy for most countries. Nearly all sectors in the market are linked to commercial real estate either directly or indirectly. The commercial real estate segment is one among three segments of the real estate sector. It consists of properties and spaces used for business purposes only. These property types include office buildings, warehouses, restaurants, malls, medical centers, and retail premises. Commercial real estate has also experienced growth in its lifetime, especially with technological advancements invented by day. It embraces and heavily relies on technology to facilitate its operations. Technological innovations are responsible for some of the biggest operational and supply shifts experienced in the commercial real estate market. An assessment of the commercial real estate sector depicts and outlines the impacts of technology on the sector. This paper aims to research and analyze the impacts of technological innovations on the commercial real estate sector.
Technological innovations have increased the demand for commercial real estate properties by production industries. Technology has enhanced the production of improved and cheaper goods by industries using the CRE properties. According to CBRE (2019), there was an increase in sales volume from 16% in 2017 to 23% in 2018 for production industries. Six hundred billion worth of sales was witnessed between 2017 and 2018. The expansion by retail industries to meet the growing market targets has prompted commercial real estate to restructure its setup, adopt modern space plans, and improve its infrastructure. Commercial real estate also employs modern construction equipment to develop tenants’ desired infrastructure and property construction plans, attracting their attention and maintaining prolonged relevance in the market (Ratcliffe et al., 2021). Technology has also solved the problem of physical proximity through the invention of lifts and elevators. Commercial real estate has benefited from the invention of lifts and escalators because they can now use small land pieces in their property construction. It has allowed for the construction of skyscrapers, termed ideal office spaces (Barkham et al., 2018). The presence of skyscrapers also increases the desirability of property location hence increasing the space’s market value.
The invention of the internet has been one of the most significant technological advances that have strongly impacted the operations of the commercial real estate market sector. A review of the Harvard Business article (2017) revealed that two-tire businesses in commercial real estate that used internet information in their decision-making were more profitable and productive than their competitors. The internet avails vital information about the market conditions, other properties in the market, socioeconomic conditions, and economic indicators to commercial real estate investors who use it to make crucial decisions regarding their projects (Kok et al., 2017). It allows them to study the market, understand their potential clients’ property expectations and preferences, their competition, and the standard rent rates that prevail in the market. Statistics show 66% of executives in the commercial real estate sector have gained a competitive advantage due to data and analytics. It is an improvement from 37%, recorded in 2010 (Zhang et al., 2016). This information helps property owners, and investors cut their transaction costs through efficient decision making. It becomes an added advantage because investors can use internet information on trends in the commercial real estate sector to predict future outcomes and gravitate their construction of projects to fit the trends.
Commercial real estate has also embraced the digitization of property advertisements and viewing. Property owners have adopted virtual means to showcase their property in the market, reaching out to a larger crowd than manual methods. Studies show 53% of companies in the commercial real estate sector have invested in various tech firms (Barkham et al., 2018). With the pandemic’s onset, movement restrictions, and minimal physical contact in the market, digitization has proved convenient and effective. Potential clients can now view properties in the market at the comfort of their houses through virtual showings and open houses. Other technological innovations include omnichannel, augmented and virtual reality, personalized sales, and real-time auctions (Yigitcanlar, 2016). Digitization accounts for three-quarters of the growth experienced in the current commercial real estate sector. 40% of firms in this sector have an established road map for their digital transformation. Property owners have incorporated digital leasing processes and digital sales as well. It has therefore made has work easier for realtors in the industry. Buyers can find their desired space over a short period without unnecessary strenuous, time-consuming movements.
Technological innovations have enhanced the productivity of the intellectual property. Modern transportation systems have rendered economic agents’ physical proximity irrelevant (Kummerow & Lun, 2015). Modern institutional structures characterized by downsizing, outsourcing, and smaller task-driven teams have emerged in the commercial real estate market. Capital-intensive structures have been replaced in low-density sectors by functional cubicle spaces that rely on technology entirely. The office spaces have also been affected because some clients have opted to work from home, thus not needing the office space. According to Deloitte’s commercial real estate outlook (2021) 49% increase in vacancy is expected for second-tier commercial real estate properties. A 47% decrease in rental properties is also expected because of the shift experienced in the market (Gujral et al., 2020). This move downsizes the commercial real estate sector since most spaces are left unoccupied. On the other hand, properties like warehouses continue to gain popularity and attract many clients.
The e-commerce penetration into the commercial real estate sector has seen many retailing firms shift to online distribution of commodities to their customers. Statistics show It has experienced a growth of 37% in 2019 only. This percentage translates to approximately eight hundred billion dollars channeled into E-commerce (Piazolo & Dogan, 2020). Most of them don’t need physical spaces to operate from. Therefore, they rely heavily on warehouses to store their commodities and distribute them using modern transportation systems. For this reason, commercial real estate has shifted its focus and resources to constructing more modern warehouses to meet the niche in the market (Veuger, 2018). The demand for warehouses has shot by 22% in 2021. Approximately one thousand eight hundred tenants needed over 660 million square feet. Individual tenants. Statistics show that third-party logistics leased a minimum of 100,000 square feet of industrial spaces last year only (Barkham et al., 2018). It was equivalent to 31.3% of the market share and one hundred and twenty-two million bulk square feet.
With the health and safety of their clients in mind, Commercial real estate players have built modern and advanced spaces that incorporate technological aspects for functionality. Property owners strive to avail modern facilities essential for their tenants, like a good internet connection (Kok et al., 2017). Research shows 90% of tenants in office spaces consider internet availability before leasing the space. Motion sensors, intruders, and fire alarms have been installed in CRE premises to enhance the security of their clients and their property (Veuger, 2018). In addition, doors with automatic sensors and touchless plumbing fixtures have been used in most properties to make the experience of their tenants unique, satisfactory, and convenient. A 2017 white Paper states that a property’s connectivity and advanced security measures increase its market value by 3.1%. Property owners are more creative than ever and develop spaces that promote their tenants’ good health and wellness. They go for features that enhance natural lighting, reduce congestion and thermal, and increase the comfortability of their tenants. Technology has made it possible for investors to construct properties that have all the necessary and modern features easily and affordably.
Conclusion
Commercial real estate has experienced undeniable progress over time because of technological innovations in various fields in the market. Technology has made its operations easier, faster, and more productive. Property owners boast of meeting the high market standards and the demands of their clients thanks to technology. However, it is also important to acknowledge that some innovations have negatively affected the commercial real estate sector. Players in this market sector should therefore moderate technology incorporation and look out for their employees and wellness. It is expected that more technological innovations will emerge in the future, influencing the changes in the commercial real estate market sector. Therefore, commercial real estate players should stay positive and open to new technological advancements to maintain relevance in the highly competitive markets.
References
Barkham, R., Bokhari, S., & Saiz, A. (2018). Urban big data: city management and real estate markets. GovLab Digest: New York, NY, USA.
Gujral, V., Palter, R., Sanghvi, A., & Vickery, B. (2020). Commercial real estate must do more than merely adapt to coronavirus. McKinsey & Company.
Kok, N., Koponen, E. L., & Martínez-Barbosa, C. A. (2017). Big data in real estate? From manual appraisal to automated valuation. The Journal of Portfolio Management, 43(6), 202-211.
Kummerow, M., & Lun, J. C. (2015). Information and communication technology in the real estate industry: productivity, industry structure and market efficiency. Telecommunications Policy, 29(2-3), 173-190.
Piazolo, D., & Dogan, U. C. (2020). Impacts of digitization on real estate sector jobs. Journal of Property Investment & Finance.
Ratcliffe, J., Stubbs, M., & Keeping, M. (2021). Urban planning and real estate development. Routledge.
Veuger, J. (2018, September). Digitalization real estate on American Real Estate Society 2018. In 2018 CIRRE Conference: 3rd Conference of Interdisciplinary Research on Real Estate (pp. 149-154). Hanze University of Applied Sciences.
Yigitcanlar, T. (2016). Technology and the city: Systems, applications, and implications. Routledge.
Zhang, D., Zhu, P., & Ye, Y. (2016). The effects of E-commerce demand for commercial real estate. Cities, 51, 106-120.
How Amazon.com use their Digital Channels to Achieve Success
How Amazon.com use their Digital Channels to Achieve Success
Introduction
The Internet is one of the major areas that have developed tremendously with the evolution of information technology (IT). To cope with technological developments and to compete effectively, companies increasingly exist in the online world (Bass, et al, 2008, p. 6). As well, IT development has opened opportunities whereby customers are able to do online shopping from online stores of companies existing online, rather than going to shop in physical retail stores and shopping malls (Bass, et al, 2008, p. 6). One of the largest and most competitive companies that exist online is Amazon. Through its online business, Amazon has been able to attract a huge number of customers from over 150 countries. Amazon.com is the main website of Amazon company in which it displays its products which comprise of millions of books DVDs, music, and videos. The site also displays other products offered by the company such as household items, apparel and clothes, electronics, drugs and cosmetics, among others. These products are also displayed in websites of affiliate companies.
Based in Seattle, Washington, Amazon opened its website on World Wide Web in 1995 and operated at a loss until 2002 when it attained its first annual profit (Daft, 2003, p. 137). Since then, the company’s profits have grown tremendously and the company continues to sustain competitive edge in the online market. One of the major drivers of successful performance of Amazon has been the effectiveness the company’s management which has steered the organisation to cope with the rapidly changing market needs as technology evolves.
The main goal of this report is to analyze how Amazon.com uses their digital channels to achieve success. Specifically, the paper analyses the nature of the company’s management structure and management strategies which has helped to steer it to success. Precisely, the paper provides a description of how the management strategies have steered this company to cope with effects, influences and changes in the online business environment. In the course of this evaluation, the paper assesses the impact of IT on the company’s success. Generally, the report expresses how management theory can be utilised to enhance effective performance of modern organisations.
Amazon’s management resources and capabilities
In today’s business environment, effectiveness of an organization’s management team as well as management strategies and networks highly influence capacity for successful performance (Robinson & Menon, 2009, p. 73). As noted earlier, one of the major reasons for the successful performance of Amazon for many years has been its effective management team led by the founder and Chief executive Officer, Jeff Bezos. According to Robinson and Menon (2009, p. 73), Amazon’s management upholds four views of leadership namely; transformation view, paradigm shift, power and social responsibility. However, the company’s management has always capitalised on a transformational leadership approach which enhances good relationships within the organisation and between the company staff and online clients and consumers (Robinson & Menon, 2009, p. 73).
One of the unique characteristics of transformational leadership is that it has a positive impact on the development and performances of the followers. According to Bass and Riggios (2006, p. 42), transformational leadership skills are often not ingrained in an individual’s personal traits, but are learned. However, some individual traits make it easier for a leader to display transformational leadership behaviours. For instance, studies have shown that the trait of agreeableness is positively associated with such leaders. Another common characteristic of transformational leaders is that they have strong ability to recognise emotions of others and to understand their behaviours. As a transformational leader, Bezos has always displayed these traits and thus it is not surprising that he has been able to accomplish change in Amazon by building networks of positive relationships.
Bezos has continuously been innovating new strategies which help the company to meet its goals. His leadership focuses on inspiring company staff to believe in his as well as in their potential, to always work hard and focus on creating a better future for the company. His approach has thus created constant change in both the company and the staff as technology and market change. According to Daft and Vershinina, (2010, p. 584), Bezos’s leadership has always focused on enhancing change in the company’s mission, structure and strategy as market needs change. Importantly, Bezos has been the central figure behind the company’s continuous innovation of new products and technology, which is one of the key areas of the company’s successful performance. Bezos does not rely only on tangible rules to control specific tasks and issues within the company. Rather, he focuses on intangible qualities such as ideas, vision and shared values within the organisation to build effective relationships, find common ground to enlist the company staff and to give larger meaning to different activities in the change process.
It would not be excessive to say that transformational, visionary leadership is the real magic behind the tremendous success of Amazon.com. According to Daft and Vershinina (2010, p. 584), the passion and enthusiasm of the online business in Bezos enabled him to secure millions of dollars financing from numerous investors. As noted, the company did not perform well for several years after it was established. However, according to Vershinina (2010, p. 584), Bezos continued to inspire employees with his vision of a new and uncommon kind of retailer as the company continued to struggle. Eventually, the company managed to achieve profitability and leadership in the business in 2002. Since then, Bezos has kept Amazon innovative with bold moves. A good example of this was the move to use Amazon’s operations, logistics expertise and technology to provide services to other services to other companies and entrepreneurs (Vershinina, 2010, p. 584).
The leadership of Amazon places accountability of success in the hands of each of the company’s employees. According to Vershinina (2010, p. 584), employees of the company are rewarded for putting both their minds and their hearts in their work. Bezos spends considerable time with employees, patting backs and giving pep talks. He personally keeps on reminding employees on the front lines that they are the heart and soul of Amazon and that only through their efforts can the company succeed. As a result of this support, the company’s employees have been able to work hard to steer the company to success.
Amazon’s online strategy in the wake of IT evolution
Since the company attained command in the online business, Amazon has always focused on sustaining competitive edge through continuous innovation and change, as the Internet continues to evolve. The company’s leadership has always ensured that its website is well updated and organised in a way that it provides more convenience to customers who wish to purchase products online rather than wait for delivery (Frisch, 2011, p. 56). The leadership ensures that the site offers the best customer experience through enhanced speed and convenience. For instance, according to Frisch (2011, p. 56), Amazon allows customers to rate the company’s products displayed on the website. This enables customers to make informed purchasing decisions. Some customers may purchase and others may not, depending on their views. On top of this, the company has an instant order update feature which provides past information about the product they are interested in (Frisch, 2011, p. 56). For instance, the feature provides information on whether the product they are interested in or they are ordering was ordered during the previous years.
Amazon.com’s consumers do not have to call all local stores to find a product (Frisch, 2011, p. 56). Amazon has formed partnership with Borders, which enables this company direct customers to the closest store that offers the desired products. Also, by partnering with other international and local suppliers, Amazon has been able to provide more options for their customers. Consumers are only required to provide a zip code. Amazon has been able to achieve this through the use of Z-shops. These are online business retailers offering similar products to Amazon and who set up online shops under Amazon umbrella. According to Frisch (2011, p. 56), this strategy enables Amazon to get as much information as possible on consumer purchasing habits.
Another long-term decision made by Amazon’s management is to enhance a competitive product pricing strategy. The products displayed on the website of this company are based on menu pricing. According to Byers (2006, p. 10) “in menu pricing, the seller sets the prices of products and buyers decide if they are or are not willing to pay the price.” Amazon focuses on offering the lowest price on products compared to its competitors. Basically, the company passes savings which are derived from its operating expenses to its customers in the form of lower prices for the products it offers. Third parties using the site are allowed to set their different prices for their products and sell them alongside Amazon’s products.
The success of this company is also as a result of successful diversification of their offerings to different products and services (Lopez, 2009, p. 12). Apart from using its website, Amazon offers differentiated content through partnership and alliances with other wholesalers and retailers. As a result, Amazon has been recognised by the largest number of online customers as a global bookstore that offers high quality products and services. Amazon’s advertising and marketing strategy focuses on attracting the interest of the targeted customers and building its reputation as a strong brand. The company has been creating affiliate websites that display its products which help in expanding its business market. In addition to the above strategies, Amazon has a “1-Click” program which helps to streamline the buying process by storing customer information (Lopez, 2009, p. 12). In short, the company’s integration of online operations and physical stores leads to great efficiencies in operations and great satisfaction to customers.
Summary
In summary, Amazon is one of the largest and most successful companies that exist online. The company offers a wide range of products which are displayed and can be purchased from its main website, Amazon.com as well as in other websites of affiliate companies. The successful performance of the company in online business is undoubtedly attributable to its effective leadership in the wake of IT evolution, specifically the Internet. The management of Amazon adopts a transformational leadership approach which is a key factor in enhancing good relationships within the organisation and between the organisation and consumers. Bezos, the founder and CEO of Amazon has been the central figure behind this organisation’s continuous innovation and changes which have enabled the company to cope with changes in technology and to meet changes in market needs. Steered by the company’s management, Amazon’s online strategy has been quite effective to meet the changing market needs. The components of the company’s online strategy include offering the best customer experience, effective pricing strategy, offering differentiated products and implementation of Z-shops and the “1-Click” program. Generally, the successful performance of Amazon can be attributed to the effectiveness of the company’s leadership through continuous innovation to cope with changes in technology.
Recommendations
Generally, as Lumsden, et al (2009) explains, e-commerce is a continuously growing area as evolution of internet technology continues. The ability of businesses to effectively compete in the global market is going to increasingly depend on their use of e-commerce. As noted, effective management as well as brand reputation are some of the Amazon’s important assets, which steered the company to become a market leader in the online business. In order to sustain this successful performance in the global market, Amazon has to maintain its current reputation by continuously observing and addressing the needs of its. The ability of the company to continuously gauge the needs of customers as market needs change as well continuous development and maintenance of good relationship with customers is essential to its success in the future. Precisely, the company must continue developing and initiating technological changes as internet continues evolving.
References
Bass, R M & Riggios, R E 2006, Transformational Leadership, California.
Bass, R M, Bass, R & Bass, R R 2008, The Bass Handbook of Leadership: Theory, Research, and Managerial Applications, Simon and Schuster, New York.
Byers, A 2006, Jeff Bezos: The Founder of Amazon.com, New York.
Daft, K M & Vershinina, N 2010, Management-International Edition, Cengage Learning EMEA, New York.
Daft, R 2003, Management, 6th edn, Cincinnati, Thomson South-Western, Ohio.
Frisch, B 2011, Who’s in the Room: How Great Leaders Structure and Manage the Teams Around Them, John Wiley & Sons, California.
Lopez, S C 2009, A Qualitative Study of an E-Commerce Organization in Transitions, ProQuest, West Sussex.
Lumsden, G, Lumsden, D & Wiethoff, C 2009, Communicating in Groups and Teams: Sharing Leadership, Cengage Learning, New York.
Robinson, T & Menon, M 2009, Jeff Bezos: Amazon.com Architect, ABDO, Washington DC.
Impacts of Internet
Impacts of Internet
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How does the Internet impact language?
The internet has significantly revolutionized how we connect with one another. Internet abbreviations have arisen as a new type of shorthand since communication has become so easy at our fingertips. This basically implies that we have means that we have refined our ability to adjust to a variety of communication settings. According to David Crystal, depending on the platform you’re utilizing, there are a variety of linguistic styles to choose from. He gives Twitter as an example. They requested users to answer to one question at the outset of the app’s development: According to David Crystal, depending on the platform you’re utilizing, there are a variety of linguistic styles to choose from. He gives Twitter as an example. They requested users to answer to one question at the outset of the app’s development: “What you’re doing?” This resulted in a type of journal in which a user’s inner thoughts were described to their followers. Later on, the app’s prompt was altered to “What is happening?” Users were more likely to communicate what was going on around them rather than their inner thoughts. Users are shifting away from writing in the first tense and toward the second and third tenses. Because it is no longer a journal, but rather a news source, the tenses begin to change. Despite this range of linguistic patterns, the internet has had little influence on language, particularly the English language. According to David Crystal, “Every internet domain influence the way you use language in quite specific ways but it isn’t yet possible to predict the future because it’s all so recent. It takes a long before new trends, technological or otherwise, influence the language in a permanent sort of way. The internet is too young yet.”
How does the Internet impact culture?
According to David Crystal, there will always be naysayers when it comes to new technology. “There are prophets of doom that have said that text messaging is a disaster,” he says, adding that the internet is no exception. The opposite has actually happened despite their negative premonition. The internet has had a huge beneficial influence on the creation of a global community. This technology has shown to be quite useful in presenting other cultures to a wider range of individuals. It makes a wide range of experiences that were previously restricted to a certain place available to people on the opposite side of the globe. Apart from introducing other cultures to a new audience, the internet has also aided in the formation of a global internet culture. For instance, amongst internet users, there is an implicit global etiquette not to expose someone else’s personal details without their knowledge, which even has a negative reputation to describe it referred to as doxing. Another example of global internet culture is making individuals in need viral in attempt to get them the assistance they require, such as in a natural disaster or humanitarian catastrophe. This may be seen in the way the international world banded together to help Syrian refugees. The internet has also facilitated the development of new forms of expression in music, art, and literature.
How does the Internet impact literature?
The usage of acronyms in literature is not a new trend. There are many more abbreviations and shorthand in nineteenth-century literature than we are aware of. According to David Crystal, there was nothing to do in the afternoons and nights during the Victorian era, therefore they would regularly play language games. As a result, the effect of the internet on literature cannot be traced in the way people use language today. The internet’s effect on literature may be observed in how literary creations are fostered and circulated. “Text messaging as a genre is turning out to be extraordinary creative,” says David Crystal. Some magazines, such as The Guardian, have held text message poetry competitions in which both young and old individuals have competed. The internet has also benefited many budding authors by offering a forum for their work. Wattpad and Archive of Our Own, for example, feature hundreds of novels in many languages from all over the world. These books are made available to readers for free reading at their leisure. Similarly, works by authors all over the world may be instantly delivered to their readers via online purchasing. Books that we had to wait weeks for are suddenly in our hands in the short amount of time.
How does the Internet impact education?
According to David Crystal, the internet has boosted literacy in school-aged youngsters. “The more you text, the better your literacy scores. The earlier you get your mobile phone, the better your literacy scores” He says. This is due to the fact that the primary acts employed in communications are writing and reading. This serves as practice for writing and reading, and it provides young people with numerous opportunities to apply what they have learned in the classroom. Children that use the internet are always reading something, which creates a completely different learning environment than previous generations. The trade-off is that internet users; both children and adults have walked away from reading lengthy information. Nonetheless, frequent exposure to text on the internet has had a good influence on literacy. Crystal goes on to say in his interview with the RSA, “The main development in English language teaching curriculum over the past twenty years is to inculcate into kids this notion of appropriateness of language. Replacing the older, black and white, correct, incorrect concept of language by a more sophisticated notion that every style of language has its purpose and you’ve got to see what the purpose is.” It is now necessary to differentiate which types of information are more efficiently delivered through text than through other forms.
How does the Internet impact society?
The internet has had a significant influence on how we interact with one another in current times. It has urged us not just to gaze inside, but also to be active observers of what is going on around us. “The internet has become more of an information exchange mechanism than it used to be,” says David Crystal. As a result, the speed with which information is shared has increased dramatically. The need for a facilitator or the media is reduced because people may now share information directly with their very own areas of influence. Certain material may now go viral, which means it can be shared and re-shared with an increasing number of individuals in a short period of time. However, this creates a breeding ground for mis-information and dis-information. This was clearly evidenced during the COVID-19 pandemic. Almost immediately, incorrect information about the illness and its vaccinations began to circulate. These pieces of information made their way throughout the world, contributing to people believing a plethora of hoaxes. As a result, immunization rates in many nations across the globe have been hampered. This example demonstrates that internet users now have a new duty to be more attentive about the stuff that they receive. All of this contributes to a more active and involved society. Being a part of a vocal society may always help to bring about change.
Reference
David Crystal – Texts and Tweets: myths and realities (2010) Interview. Royal Society for Arts, Manufactures and Commerce, YouTube. Retrieved from https://www.youtube.com/watch?v=Boj8VYzDAy8 on November 24, 2021.
David Crystal – The Effect of New Technologies on English (2014) Interview. British Council of Serbia, YouTube. Retrieved from on https://www.youtube.com/watch?v=qVqcoB798Is November 24, 2021