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Introduction
The growth and competitiveness of the real estate industry across the globe drive big market players to embrace technology and innovation in order to improve customer satisfaction and facilitate work processes. One of the technologies that show promising prospects but are not properly presented in the sector is virtual reality (VR). The effect of the presence in the virtual world is created through translating images to a head-mounted display with a screen in front of the eyes of an observer. Currently, VR technologies are applied in some industries, including military, commerce, health care, marketing, and entertainment (Mathew 2014). The perspectives of using virtual reality in the real estate industry are also significant, and Ray White Company will potentially benefit when applying VR technologies in the process of working with customers.
Research Problem
The problem to address with the help of applying VR in Ray White is that the company currently faces decreases in customers’ satisfaction with the organisation of the property search in Australia, resulting in their high spending, decreases in loyalty, and even choices of other companies. Customers’ negative experience is associated with a time- and resource-consuming process of looking at or inspecting houses and apartments.
Ray White offers a wide range of options for rent and purchase, but because of the limited time resources, customers cannot view all of them. Distances between sites may be quite large, and apart from that, buyers-to-be like to take their time walking around the property to make sure that everything is up to their standards. Due to the fact that clients miss out on some of the options, potential buyers might feel neglected and not cared for.
Customers have to do the property search in their free time, and it is easy to understand their frustration and dissatisfaction if they cannot find a good property right away. Furthermore, the problem is more critical for those customers who are not residents of Australia, and they need to spend additional time and resources waiting for their turn to inspect available houses. Additionally, the competitive advantage in the real estate industry of Australia significantly depends on customer loyalty and satisfaction. However, as recent statistics show, the residential property market in Australia is thriving, and this tendency is likely to stay for years to come for several reasons.
First, Australia has one of the most urbanized populations in the world, with the share of people living in urban areas being at around 89.65% (Australian Bureau of Statistics 2018). Moreover, the population growth rate of 1.6% surpasses those of other developed countries such as the United States (0.6%) and Canada (1.2%) (Australian Bureau of Statistics 2018). From this perspective, Ray White needs to find an appropriate solution to the problem of decreases in customer satisfaction to attract more clients.
Research Question
The focus on the currently observed problem with the process of inspecting houses and apartments for the clients of Ray White and the information on the industry trends make experts find solutions to the discussed problem. The application of VR technologies in the real estate industry is viewed as one of the most advantageous solutions to the problem, but more research is required to determine its real benefits. The application of VR will provide Ray White with more options to organize the process of selecting the property, and more potential clients will be attracted to the company to use this option. Therefore, it is important to conduct research on the specifics of using VR in the real estate industry to assess potential gains for Ray White. The following research question will guide the study of the discussed aspects:
RQ: How can the implementation of VR technologies that allow viewing the property improve customer satisfaction?
Sub-questions important to guide this research and analyze additional information related to the issue include:
- How exactly should VR technologies work to make the improved experience possible?
- Given that the status of ownership increases with age, will the technology be popular with older generations?
- Will customer satisfaction with the VR experience actually convert into purchases?
Importance of Applying Virtual Reality by Ray White
The application of VR technologies in Ray White will lead to significant decreases in costs associated with addressing customers’ needs. Although the company will require buying specific VR equipment to ensure all clients have access to VR technologies in the company’s office, costs of equipment will be lower than logistics costs and employees’ bonuses for accompanying clients. More customers will become attracted by Ray White because of the provided opportunity to inspect properties without visiting them. The company will potentially gain the reputation of the leader in the industry with reference to applied innovations.
Additionally, costs for recruiting more employees will decrease as one employee will be able to assist several clients using VR technologies in the company’s office. Thus, Ray White will directly resolve the problem with customer service and decrease the excessive search time, addressing customers’ needs and offering several variants during one visit to the office. As a result, an environment geared towards mutual benefits for the company and clients will be created, and its creation is possible only through the integration of customer needs and wishes.
Four Primary Practices
According to Joyce (2005), the four specific primary practices that contribute to the organization’s progress are strategy, execution, culture, and structure. The proposed project is directly related to the realization of the two of these management practices: execution and culture (Figure 1). According to the principles of flawless execution, it is necessary to avoid disappointing customers. Therefore, products need to be up-to-date and addressing clients’ expectations (Joyce 2005). In the context of this project, using VR technologies, Ray White will demonstrate its focus on innovations and changing industry conditions.
The company relies on the quality of the property that it offers, and houses and apartments do meet customers’ expectations. Additionally, customers’ expectations regarding the quality of proposed services will also be met. Ray White will avoid ignoring the customers’ experience at all stages, supposing that customers only need to feel delighted at the final stages – purchasing and post-purchase.
The second relevant management practice is culture with a focus on creating a unique performance-oriented philosophy in the organization. When using VR in their practice, employees will be empowered to address clients’ needs to their full extent, and they will be able to improve everyday operations. The use of VR can also be viewed as an approach to improving the culture within the organization with reference to creating a positive and comfortable working environment for employees. Thus, they will receive opportunities to work in fully equipped offices without working extra hours associated with usual practices in the industry.
Literature Review
The existing literature on applying virtual reality in the real estate industry has been reviewed to determine how VR can influence customer experience and satisfaction. The use of VR in this industry is not widely covered in recent studies, although the topic of applying VR in other businesses is actively researched. As recent statistics have shown, VR technologies are on the rise after a rather slow and rocky start. For instance, the VR market is projected to grow 7.7 times between 2018 and 2022 (Liu 2018). In 2014, only around 0.2 million people worldwide used VR gadgets and devices, but today the number has reached 171 million (Liu 2018).
Furthermore, 70% of VR users express intention to use gadgets more frequently and even buy customer sets (Petrov 2019). As a result, VR became actively used in architecture, engineering, sales, and other areas because VR attracts customers and saves costs (Jones & Livingstone 2015). Thus, the VR market will potentially undergo exponential growth in the years to come, and the pioneers of VR technologies are likely to be the ones to profit the most from their early investments.
In the real estate industry, proponents of VR technologies emphasize their role in organizing virtual tours, examining model houses, reducing costs, and looking around projected facilities. According to Deaky and Parv (2018), the main advantage of VR for the real estate market is the possibility to easily examine 3D models of buildings and spaces, eliminating costs for logistics and numerous visits. Ullah, Sepasgozar, and Siddiqui (2017) also state that VR guarantees receiving higher customers’ involvement for minimum costs, and the overall management of the contract with a potential customer also improves.
As it is stated by Palm (2016), despite claiming to be customer-oriented, only half of the real estate companies that participated in his study actually conducted any evaluation of their relationships with customers. The researcher concluded that becoming more client-oriented implies two tendencies – towards improvement and quality signaling. In this case, VR is used in order to improve services. Thus, virtual tours are viewed as the future of the real estate industry, but this aspect is not studied properly in the available literature on the topic.
In spite of researchers’ focus on studying the benefits of VR for different markets, including the real estate industry, there are a limited number of studies on the relationship between using VR and customer satisfaction. Most studies are focused on how VR influences customer behaviours without reference to their satisfaction levels (Kim 2015; Ullah & Sepasgozar 2019). Puķīte and Geipele (2017) claimed that when it comes to real estate, it is almost impossible to predict customers’ behavior at any of the stages in the buying process. However, it does not mean that real estate companies should give up improving work processes. Furthermore, the market is getting more personal: given its oversaturation and the availability of information on the Internet, customers expect personalized offers.
A virtual reality tour might make it possible to raise customers’ awareness and make the experience more memorable. Jones and Livingstone (2015) state that real estate companies benefit from diversifying their communication channels including more innovative methods. According to Mütterlein (2018), implementing VR has the potential of bringing about three kinds of change in customers: cognitive, affective, and conative.
In the context of real estate, the cognitive change would mean absorbing more information about an object, e.g., a house or an apartment. Effective change happens when customers are moved by the emotions that they derive from interacting with a product via VR technologies. Lastly, the conative change concerns the actual intention to purchase a product or service driven by the new information that a customer has received.
Researchers accentuate how essential it is for consumers to retrieve as much information as possible before purchasing services. Van Kerrebroeck, Brengman, and Willems (2017) tested mobile virtual reality (MVR) on human subjects to study their reactions and attitude. The researchers investigated the role of vividness (imagery richness and interactivity) in transformational brand management. They discovered that consumers liked 3-D videos more than usual 2-D counterparts, primarily due to the vividness of the former. VR technologies accounted for a better presence, which ultimately led to more positive experiences when interacting with the technology. Dadwal and Hassan (2016) came to the same conclusions when studying the impact of implementing VR in tourism and hospitality.
VR tours to sites and properties had the potential of relieving stress and entertainment value for the participants. According to Backhaus et al. (2014), VR might promote disruptive products and services, i.e., those that are so innovative that customers might fail to imagine how they work. However, gaps in the literature regarding the study of the relationship between VR application and customer satisfaction indicate the necessity of conducting additional research to determine how VR application can benefit the organization.
The purpose of this literature review was to determine the background factors associated with the application of VR technologies in the real estate industry. These factors include customers’ attitude to VR, their interest in using innovative technologies, customer satisfaction and the readiness of the industry to apply advanced technologies (Sirgy 2014; Juan, Chen & Chi 2018). Although customer satisfaction is regarded by researchers as one of such factors, there is little research on the connection between VR application and clients’ satisfaction (Palm 2016; Puķīte & Geipele 2017).
The review of the literature allowed for referring to these factors when preparing interview questions for participants in order to study how VR technologies used by Ray White can contribute to improving customer satisfaction and loyalty.
Methodology
The present research will employ a qualitative methodology based on conducting interviews for collecting data. A qualitative methodology is selected as collected data are expected to provide researchers with better insights into the knowledge and attitude of customers towards VR technologies. It will help to capture the nuances of their buying experiences and intentions. A quantitative design based on conducting surveys is not appropriate to address the set research questions because of gathering and analyzing only quantitative data that cannot be used to determine how VR can be applied to improve customer experience and satisfaction (Rowley 2012).
The purposive sampling approach will be used to recruit 24 participants interested in renting/buying properties in Australia (Robinson 2014). This number of respondents will help to collect enough data on addressing the research questions. The participants will be recruited online and by phone by making both cold and warm calls, i.e., contacting the existing customer base. The sample of participants will include 12 men and 12 women (22-50 years old) from different regions of Australia, who plan to rent or buy the property and who are ready to visit the office of Ray White.
Twenty-four semi-structured interviews based on the protocol including eight probing questions will be conducted individually with the participants in the office of Ray White. A day before each interview, the participants will be provided with an opportunity to use VR technologies for selecting the property. The next day, they will answer interview questions in the office of the company for about an hour.
Interviews will be conducted face-to-face with each participant in the company’s meeting room to avoid interruptions and make them feel comfortable (Rowley 2012). The form of a semi-structured interview will provide participants with opportunities to share any information and details they want (Alshenqeeti 2014). The interviewees will be informed in advance that their answers will be recorded to transcribe narratives for further analysis.
Data Analysis
The qualitative data collected with the help of interviews for further analysis include transcriptions of the participants’ narratives (answers to interview questions). Thus, all the interviews are to be recorded and transcribed for further analysis without indicating confidential information about the participants. The narratives are to be analyzed according to the principles of thematic analysis with the help of the NVivo software. The first step of the thematic analysis is the coding of the data to determine similar patterns in the participants’ answers to questions with reference to their direct answers, comments, and other types of reactions (Alshenqeeti 2014). The second step is the identification of major themes prevailing in the participants’ narratives regarding the use of VR technologies.
To assess the effectiveness of the offered methodology, a pilot study has been conducted. During 24 interviews, participants expressed their visions regarding the use of VR in the real estate industry. For example, Participant 1 stated, “I like using VR to look at apartments without visiting them”. Participant 2 added, “It took me only 30 minutes to inspect two houses and one apartment, it is almost impossible in real life”. Participants 3-5 accentuated the usefulness of VR in selecting the property. Participants 6-9, among others, agreed that VR can significantly improve the first stage of choosing the property.
Participant 10 noted, “I will be dissatisfied if other companies will not propose me using VR for selecting houses, it is a great experience”. Participants 11, 14, and 17 stated that VR technologies made them feel impressed by what they saw. Participants 12-13 asserted they would like to use VR in their practice. Other participants stated that VR is a new step in the real estate industry to improve clients’ experience. Participant 23 claimed that VR can satisfy customers’ expectations. Participants 21, 24 provided some recommendations on enhancing the use of VR in the industry.
Likely Findings and Their Importance
Thematic analysis of data collected during interviews has helped to find common themes and patterns in the participants’ narratives to constitute semantic clusters. The following major themes have been determined and can be potentially related to customers’ experiences: ‘novelty’ (29% of codes are related to this theme), ‘surprise’ (22% of codes), ‘curiosity’ (17% of codes), ‘usefulness’ (16% of codes), and ‘satisfaction’ (16% of codes).
Furthermore, among the participants, 82% belong to the age groups of 22-35 years old and 36-45 years old respondents, and 18% represent the group of 46-50 years old respondents. These findings demonstrate most participants’ interest in VR technologies to be applied by Ray White to improve their customer experience and satisfaction. Conducting full-scale research, it will be possible to learn more information about potential customers’ attitudes towards VR technologies to decide on their implementation to increase customers’ satisfaction.
The potential findings of the research will provide the background for implementing VR technologies at Ray White to improve its organizational performance. The information about the participants’ attitudes towards VR collected via interviews will be used to improve interpersonal relations between customers and employees to increase clients’ satisfaction and increase the performance of the organization because of an opportunity to serve more clients at a time.
The answer to the question of how the implementation of VR technologies can improve customer satisfaction will provide gains for the company in terms of execution and culture. Thus, after the research, the execution practice will improve as the delivery of services to clients will change: more clients will be served by fewer employees, and fewer resources and less time will be required. The culture of the company will become more client- and performance-oriented, and as clients’ expectations regarding inspecting maximum apartments for minimum time will be addressed, their satisfaction will increase.
Estimated Costs
Table 1 presents the timetable for organizing the research with reference to the estimated time, related activities, and required resources.
Table 1: Time and Resources Required for Research.
Table 2 represents the financial costs related to organizing and conducting the research. The main categories include the costs required for purchasing and using VR technologies: headsets and VR programs. The costs are estimated with reference to the average prices in the market. The other category of costs is related to the organization and performance of the research with a focus on collecting and analyzing interview data.
Table 2: Estimated Costs.
Reference List
Alshenqeeti, H 2014, ‘Interviewing as a data collection method: a critical review’, English Linguistics Research, vol. 3, no. 1, pp. 39-45.
Australian Bureau of Statistics 2018, Interesting facts about Australia’s 25,000,000 population. Web.
Backhaus, K, Jasper, J, Westhoff, K, Gausemeier, J, Grafe, M & Stöcklein, J 2014, ‘Virtual reality based conjoint analysis for early customer integration in industrial product development’, Procedia CIRP, vol. 25, pp. 61-68.
Dadwal, SS & Hassan, 2016, ‘The augmented reality marketing: a merger of marketing and technology in tourism’, in K Klinger (ed), Mobile computing and wireless networks: concepts, methodologies, tools, and applications, IGI Global, Hershey, PA, pp. 63-80.
Deaky, BA & Parv, AL 2018, ‘Virtual reality for real estate – a case study’, IOP Conference Series: Materials Science and Engineering, vol. 399, no. 1, pp. 1-12.
Jones, C & Livingstone, N 2015, ‘Emerging implications of online retailing for real estate: twenty-first century clicks and bricks’, Journal of Corporate Real Estate, vol. 17, no. 3, pp. 226-239.
Joyce, W 2005, ‘What really works: building the 4 + 2 organization’, Organizational Dynamics, vol. 34, no. 2, pp. 118-129.
Juan, YK, Chen, HH & Chi, HY 2018, ‘Developing and evaluating a virtual reality-based navigation system for pre-sale housing sales’, Applied Sciences, vol. 8, no. 6, pp. 952-961.
Kim, S 2015, ‘A study on the real estate information system based on virtual reality technology’, Advanced Science and Technology Letters, vol. 87, pp. 82-87.
Liu, S 2018, Virtual Reality (VR) – statistics & facts. Web.
Mathew, S 2014, ‘Important of virtual reality in current world’, International Journal of Computer Science and Mobile Computing, vol. 3, no. 3, pp. 894-899.
Mütterlein, J 2018, ‘The three pillars of virtual reality? Investigating the roles of immersion, presence, and interactivity’, Proceedings of the 51st Hawaii International Conference on System Sciences, vol. 1, pp. 1407-1415.
Palm, P 2016, ‘Measuring customer satisfaction: a study of the Swedish real estate industry’, Property Management, vol. 34, no. 4, pp. 316-331.
Petrov, C 2019, 35 virtual reality statistics that will rock the market in 2019. Web.
Puķīte, I & Geipele, S 2017, ‘Determining customer satisfaction in the real estate management sector in Riga’, Baltic Journal of Real Estate Economics and Construction Management, vol. 5, no. 1, pp. 226-237.
Robinson, OC 2014, ‘Sampling in interview-based qualitative research: a theoretical and practical guide’, Qualitative Research in Psychology, vol. 11, no. 1, pp. 25-41.
Rowley, J 2012, ‘Conducting research interviews’, Management Research Review, vol. 35, no. 3-4, pp. 260-271.
Sirgy, MJ 2014, Real estate marketing: strategy, personal selling, negotiation, management, and ethics, Routledge, Abingdon.
Ullah, F & Sepasgozar, SM 2019, ‘A study of information technology adoption for real-estate management: a system dynamic model’, Innovative Production and Construction: Transforming Construction Through Emerging Technologies, vol. 1, pp. 469-476.
Ullah, F, Sepasgozar, ME & Siddiqui, S 2017, ‘An investigation of real estate technology utilization in technologically advanced marketplace’, 9th International Civil Engineering Congress, vol. 1, pp. 22-23.
Van Kerrebroeck, H, Brengman, M & Willems, K 2017, ‘When brands come to life: experimental research on the vividness effect of Virtual Reality in transformational marketing communications’, Virtual Reality, vol. 21, no. 4, pp. 177-191.
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