Buckingham Place’s luxurious amenity spaces are completed and fully operational! Residents have moved in and are already enjoying the recently completed 1st and 2nd floors of the project. Units on levels 3 – 5 are scheduled to be delivered throughout early October.
In an increasingly digital world in which smartphones are evolving seemingly daily, it’s time for the multifamily industry to make headway on the technological front. Truly, operators' and developers' livelihoods may depend on it.
Even when considering the recent evolution of tech-focused campaigns, the apartment arena has only scratched the surface of digital marketing.
“The industry has done a really great job pushing out a variety of advertising campaigns and digital strategies,” says Morgan Porter, director of digital marketing for LMC. “But we’re spending too much time creating campaigns and strategies only to hope the foot traffic and qualified leases will increase. Instead, we should be dialed into the audiences we've attracted with these marketing dollars, optimizing their experience, and capitalizing on the spend by studying their engagement with our websites and social channels.”
The ability to determine how prospects arrive at your site—and how they engage with your content when they get there—qualifies as gold for digital marketers, who can properly attribute leads and build marketing strategies based on users' key performance indicators.
It’s easy to get lost in the giant sea of digital marketing tactics that have been unearthed since the beginning of the information age, but it’s clear that three approaches in particular represent the future for multifamily: marketing-automation systems, multitouch lead-attribution models, and Google’s ever-evolving algorithm.
Marketing Automation Saves Time, Delivers Key Data
Marketing-automation software, such as HubSpot and Marketo, simplifies everyday marketing processes and saves time by alleviating the need to repeat mundane tasks such as updating rental rates across several channels and automated email campaigns. If a community can update its rents on one platform and automatically feed that information to every other one of its marketing channels, that saves the property manager the time it would have taken to update the channels manually.
Marketing-automation software also delivers key data pertaining to the search habits of prospects engaging with your channels, such as the location and timing of their searches.
“I believe location data is very underutilized, and it’s a huge key performance indicator [KPI] that I lean on heavily,” Porter says. “When I look at website data and user engagement, I find a lot of nuggets hidden in the locations of our users when they do their searches. I can see how they found our website, where they are when they're searching, and when our prospects are conducting their discovery searches versus applying for a home.”
Porter commonly adjusts her geotargeted locations to ensure that LMC isn’t posting irrelevant ads, using ineffective search terms, or targeting an unconnected audience. The more engaged the users, the more likely the community websites will appear in quality searches.
Conducting a deep data analysis on a particular community, Porter discovered that a significant number of website visitors during the day were searching for apartments from a downtown market over an hour away. However, by 7 p.m. the website audience was much closer, with a significant percentage based within five miles of the community.
“This data point indicated that we needed to adjust our digital ads and social reach to target this downtown metro area during the day and run an additional, separate campaign closer to home in the evening,” Porter says. “The interesting piece of the puzzle was the original assumption that the prospective renter wouldn't want this long of a commute, so the discovery of this KPI was very eye-opening.”
Within the first two weeks of the adjustment, the community closed 14 leases. That was without spending any additional marketing dollars but simply adjusting the strategy to complement the users’ KPIs. That’s one of many examples Porter has of utilizing data to adjust SEO, social, or pay-per-click strategies at an underperforming community and delivering results.
Multitouch Attribution Provides Clearer Picture of What Sealed the Lease
In the past, marketing teams would credit a conversion to a prospect’s first or last touch point. If the prospect first discovered the community through a flyer, the flyer received full credit for the lease. In other instances, if the prospect last visited the community’s website before signing, the site would be deemed the winner. Yet, this type of attribution model is extremely flawed, according to industry experts.
Imagine a man leaves his Chicago home in the morning to attend a concert in San Francisco that night. He takes an Uber to the airport in Chicago and flies to Denver. After making a connection with the help of a friendly gate attendant in Denver, the gentleman arrives in San Francisco. He then takes a trolley the final two blocks. You wouldn’t give the trolley full credit for getting him from Chicago to the concert.
Just like our detailing of the Chicago traveler’s itinerary, multitouch attribution enables marketers to credit each touch point along the way on a weighted basis. In the case of our traveler, the airline flights would receive the bulk of the credit, but those smaller commutes and the friendly gate attendant would receive some as well.
During an apartment search, a prospect typically visits several channels ranging from review sites to community website to ILS listings to social media ads and others. Multitouch attribution allows each of those touch points to receive its share of the credit.
“Multisource attribution is the wave of the future, and there are ways you can use the data available to you now to make decisions based on the weighted touch points,” says Trevor Riley, senior vice president of product for property management software company Entrata. “Properly applying the data can equate to significant ROI boosts now and down the road.”
Armed with these data, digital marketers can determine which channels are most effective and adjust their marketing strategies accordingly on the fly.
“The data tells the story,” says Jennifer Anderson, director of B2B marketing for RentPath. “A conversion always seems like a win, but when you can evaluate all the touch points used by the renter before they decided on your community, it holds even greater value.”
When planning a mixed-use site, it's imperative to choose a retail anchor that tenants and the community at large will actually like.
As multifamily development continues to pick up in resurgent downtowns and city centers across the country, identifying the right complementary retail tenants remains an important part of the development mix.
The first consideration should always be identifying the right candidates to suit the tone and tenor of both the neighborhood in general and the residence in particular. A fast-food brand is unlikely to be a good fit for your new luxury apartment building, for example.
The biggest and most important priority is finding retail concepts that people like: places they want to visit, products they want to purchase, and services they want to use. Staying in touch with which retail concepts are resonating with multifamily tenants will continue to be a key piece of the mixed-use puzzle.
Here's what the multifamily retail landscape looks like in 2018:
Coffee Is Still Hot
You can’t have a discussion about retail and multifamily without mentioning coffee shops. Saturation is always a concern when you have a segment this hot (no pun intended). As coffee consumption continues to increase, more coffee shops and concepts will open. Although Starbucks remains a top contender in the coffee niche, we’re seeing the millennial generation placing more of an emphasis on unique coffee concepts—and they're willing to pay more for it.
For example, coffee chains like Blue Bottle Coffee are beginning to disrupt the sector. They provide a trendy boutique feel but still have the advantage of being a chain, so people know what to expect no matter what location they visit. This proliferation and popularity of niche products and concepts shows no sign of slowing down. This is a trend that is evident across the retail spectrum, with plenty of local, regional, and national names to choose from.
Authenticity in Demand
We're witnessing a surge of interest in local, authentic, nonchain retail concepts—a trend especially evident in the restaurant sector. There are a mix of national chains wanting to get into the market—with mixed success—and local/homegrown food purveyors who are still the most desirable tenants downtown. Nationally, casual dining concepts are in demand, and those with an authentic feel or fresh approach are getting the most attention. Bakersfield, for example, a popular new restaurant concept inspired by authentic Mexican street fare, is expanding across the Midwest and the Ohio Valley.
At Your Service
Dining concepts and service retail, such as laundromats, convenience stores, and banks, remain among the strongest-performing categories for multifamily. In any city where urban development and redevelopment are picking up steam, population growth is driving a corresponding need for service retail. With continuing uncertainty about the relationship between online retailers and traditional brick-and-mortar brands, food and service retail will never go out of style.
Working It Out
Cycling, yoga studios, and a whole range of new and emerging exercise concepts continue to gain traction in mixed use. From kickboxing and Pilates to variations on CrossFit-style personal-training gyms, this is a space where innovation and creativity have really taken off. The convenience of being able to exercise in the same building as one lives continues to be a driving factor in the multifamily landscape, especially for urban dwellers.
Local and Regional Edge
Two things tend to give popular local and regional retailers somewhat of an edge when it comes to urban multifamily synergy. First, in the early stages of a turnaround like the one we're seeing in Detroit, brokers, developers, and civic leaders are recognizing the unique opportunity available to carefully curate the retail and mixed-use environment. They tend to be focused on interesting, innovative concepts.
There still isn’t a ton of available retail space in downtown Detroit, but as more space opens up, we’ll likely see more-familiar, national concepts finding ways to get a foot in the door—that is, if they can overcome the second issue behind local and regional retailers' prominence: size. National chains tend to be somewhat formulaic with respect to store size and layouts, which can be tricky in an urban context where older spaces aren’t all going to be the ideal cookie-cutter size. Some flexibility and experimentation will likely be needed.
Look at how long it's taken Target to refine and settle on a workable urban concept, for example. That will likely remain a challenge for more than a few national brands in the years ahead.
Quality and Experience
With growing demand for “something different,” retailers are finding creative new ways to differentiate themselves. Sometimes that’s a high-end concept, like a full-service dermatology office similar to The Carter Snell Skin Center in our property The Scott at Brush Park in Detroit, or a premium product, like the artfully crafted city bikes from Detroit Bikes in our nearby property The Albert Capitol Park. Other times, it’s a retail experience that's more service oriented, as with optician Warby Parker.
In sum, it’s all about finding a way to reposition yourself within a specific niche, like branding a beauty-products retailer as an apothecary and focusing on organic and all-natural health and wellness products and services.
Understanding which brands and multifamily-friendly retail concepts have traction, and which new ideas are coming down the pipeline in the months and years ahead, isn’t just a big part of developing successful apartment projects and thriving neighborhoods—it’s about creating dynamic, diverse, engaging urban environments. The places where people will want to live, work, play, and stay.
Chris Coleman, VP of Development at Wingspan, periodically shares his thoughts and observations on property development news.