DIGITAL MARKETING INTO DIGITAL COMMUNITY: PREPARING PEET’S FUTURES

PART ONE: GO ASK ALEXA

“Alexa where should I live?”That question, shouted at a little internet-connected microphone, seems more than a bit ridiculous. Why would anyone ever ask a device – any device – where they should live?

But let’s break this down a little bit.

Although Amazon has only recently arrived in Australia, it’s been a huge part of the retail landscape in the US and the UK for twenty years. There’s a whole generation of consumer who have never known a world without Amazon. From the time they received their first Amazon gift card, they’ve had an account, and have been ordering all of the millions of items Amazon has on offer.

A decade ago, as they bought their first smartphones, Amazon followed them, with its own apps. Amazon knew what they looking to buy, and where they were when they were looking to buy it.

Amazon so coveted that information they even launched their own smartphone – the Fire Phone – but in a rare misstep for Amazon, the Fire Phone crashed and burned, then disappeared without a trace.

But out of the ashes of the Fire Phone came Alexa, Amazon’s ‘voice assistant’. With a limited repertoire of ‘skills’, Alexa first served as a hands-free interface to Amazon itself. You could order diapers or play streaming music from Amazon’s huge library or even ask it to time an egg.

Alexa came along at exactly the right moment in time to benefit from a sudden and unexpected maturity in artificial intelligence.

Alexa is part of a much broader trend toward embedding artificial intelligence pervasively throughout the word.

I use the phrase ‘artificial intelligence’ almost like it’s a magic spell – it tells you something’s in play that seems almost impossibly complex, shrouded in mystery, the realm of boffins and a scientific priesthood.

The dark truth of artificial intelligence is that it is simply a way for computers to learn from their mistakes. No more and no less. There is no magic. Just endless repetition.

We’re fond of saying that we learn more from our failures than from our successes. Take that, and multiply it by the absolute focus and indefatigability of a computer program, and that’s modern artificial intelligence. That’s the whole of it.

Every day, people say over a billion words to Alexa. That’s a lot of mistakes, and a lot of learning. In 2018, Alexa will be able to interpret much that’s said to it in English.

Ditto Google Assistant, and ditto ditto Siri. They all have so many people saying so many things, that they make so many mistakes, which they all learn from to get better at interpreting speech.

But speech does not a mind make.

We are all familiar with that “digital disappointment” when we make a request to Alexa or Google Assistant or Siri, and listen as it fails spectacularly. Alexa may be adept at interpreting language, but that, as it turns out, was the easy bit. The hard part is turning our weird commands into some task Alexa knows how to perform.

“Alexa, where should I live?”

That’s calling on Alexa to make a judgement. Yet Amazon knows so much about its customers – where they live now, where they visit, the things they buy, the shows they watch, and the times of day when all of this happens – that it knows them, if not intimately, definitely deeply. Amazon has watched its customers for years, and has profiled them.

Those profiles became the way Amazon made its product recommendations. In the very early days, Amazon bought a small startup named Firefly, that specialised in recommendation engines. At first, Amazon used the technology to recommend music and movies that customers might like because similar customers – that is, customers who had made similar purchases – had also made these purchases. If I like Midnight Oil and The Saints, and you like Midnight Oil, chances are higher that you’ll like The Saints.

Amazon knows its customers, knows their likes and dislikes, and Amazon knows where its customers live. People of like mind tend to cluster together in communities. I live in the NSW electoral division of Newtown, the only electoral division at state or national level where a Greens candidate was elected on first preferences. That’s not an accident. It’s very likely there are similar consumption patterns across my division – lower levels of car ownership, higher levels of public transport, more eating out, fewer children, and so on.

Amazon knows this, because it sees not just one customer, but all the customers in a particular area.

So when I ask “Amazon, where should I move?” it might follow with, “What city do you want to live in?” If I say “Perth” or “London” or “Los Angeles”, it can refer to its deep knowledge of its customers, looking for similarities, and a few streets in Northbridge that fit the bill, Central in Singapore, and Sukhumvit in Bangkok.

I might have learned as much from a Google search, but Amazon’s selections are backed by data, history, and customer profiles. If Amazon makes a recommendation – down to a specific building on a specific street in a specific neighborhood in a specific city – I should be able to ask Alexa how it came to that decision.

Whether or not Alexa does any of this today is immaterial. The infrastructure to it is has been in place for years. With very little effort, Amazon could add a new skill to Alexa that would allow it to answer this question, answer it well, and drive customers to a particular purchase option.

Buying a home isn’t like buying a desk lamp – all sorts of other factors enter into it. A recommendation is not a sale. But where Alexa gets it wrong – where the customer interaction doesn’t end in a purchase – Alexa learns from its mistake, and does better next time, and the time after that, and the time after that.

After Alexa has answered that question a hundred thousand times, it’s gotten really good at factoring in all of the customer’s needs.

And when that happens, why would anyone do anything other than ask Alexa where they should live? After all, they’d never be able to do such thorough job on their own. None of us have the resources, nor the breadth and depth of data that would help us make that call.

Yet Amazon already does.

That Amazon doesn’t already do tell people where they live is a combination of accident and intention. Accident, because Amazon hasn’t gone into real estate – yet. Intention because although Amazon knows a lot about us and our neighbors and our communities, it never betrays what it knows.

Unlike Facebook, which gets caught again and again taking the data we share with it, then weaponising it for use by advertisers and propagandists, Amazon has restricted its use of that information to make the Amazon buying experience better.

Gerry Harvey can see the threat in this – but what he’s selling is something that anyone can buy anywhere.  What Peet is selling is unique and specific and rolls so well with what Amazon knows that it might not be a bad idea to approach Amazon about a partnership that can drive customers to the home of their dreams.

The more data you have, the more you can help support the buyer in their decision, and when you take what you know and multiply it by what Amazon knows, there’s a lot of very happy outcomes for everyone – Peet, Amazon, and the home buyer.

But that’s just the beginning of the journey. What’s required next often involves a leap of faith.

PART TWO: UNSEEN AND BELIEVED

Now that you’ve got a potential customer, you have to close the sale. You might invite the customer to visit your website, where they can see beautifully rendered architectural drawings of a site that’s just a field today. If they’re really excited, they might even drive to the site to see — a field.

Buying something that doesn’t yet exist is an act of imagination – and involves a leap of faith. Peet has both the history and pedigree to make that leap of faith a short jump. But imagination, that’s much harder. Unless we’ve had some training in the arts, it’s difficult to see something in our mind’s eye.

Fortunately there’s a new technology to help us see what’s not yet there.  

You might remember two years ago — when Pokemon Go came out of nowhere to become the most popular mobile game ever. Everywhere, game players stared into the screens of their smartphones. Those screens showed the real world – plus Pokemon. It wasn’t just reality as captured by the camera – it was ‘augmented reality’ – reality plus computer-generated data.

All of the latest model smartphones have enough power to create sophisticated augmented reality, and in a few months we’ll see millions playing Harry Potter: Wizards Unite, another augmented reality game.

Augmented reality isn’t just for games. Seamlessly integrating the real world with simulation, it offers the perfect technique to project a future vision for a room, a home, or a community.

IKEA has already capitalised on this with their IKEA Place augmented reality app. The app scans your room, measuring walls and floor, then presents a catalog of different items of furniture that can be selected and ‘placed’ into the room, to arrange, to style, and to purchase. Why travel to the showroom when you can bring the showroom into someone’s lounge room?

It’s very easy to imagine a slightly different version of this app that would allow a potential customer to visit a Peet greenfields site, open the app, then let them site and design their own home from the plan. Once they’ve done that, they can ‘walk through’ the home, adding or removing features as they desire.

This isn’t vastly different from the kinds of tools already used today to help sell properties in the planning stages, but being able to site a home makes it feel more tangibly real than anything you might see on a screen.

As powerful as that is, it’s just the starting point. Peet designs and builds entire communities, so the app should be able to show the master plan surrounding the individual home. How will it look when it’s all built? How far are we from the park? From the school? From the shops?

This is where augmented reality offers far more than any other solution; it’s a scaffolding for the imagination, a time machine transporting customers years into the future, so they can decide if that’s the future they want for themselves.

Of course this is only half of it. Alexa can recommend, augmented reality can provide the vision, but these decisions – among the biggest ones we’ll ever make – require careful consideration. Customers will talk it over with their partners, their friends – and their Facebook.

Social media provides a global platform for people to connect, discover their common interests, share what they know, learn from one another, then put that learning to work. We’re now so well connected that it is possible for us to make our decisions drawn from the best information and the widest range of experiences.

Everyone who has ever purchased a Peet home will have something to say about that experience. And they have somewhere to say it.

You can argue about whether it’s fair, wether it’s balanced, whether it’s reasonable, but you can’t argue any of it away. The good glows, the bad stinks – and both of them stick around forever.

There’s only one real way to deal with social media: connect to it, embrace it, share across it, learn from it, and put what you’ve learned to work.

A personal story: a few years back I was debating whether to spend a lot of money – well over a thousand dollars a night – on a luxury resort in Phuket. As you do, I went on TripAdvisor to read the reviews. All of them glowing. But I know that businesses pay big bucks to game those reviews, so I did the opposite, and read the most negative reviews.

That’s when I learned every negative review was immediately followed by a response from resort management acknowledging the problem – and the steps taken to ensure that problem would never occur again.

No one is perfect. No one expects perfection. What we all expect is an authentic response. We expect people to listen to us. And when we feel we haven’t been heard, that’s when we get angry. That’s when the knives come out, when the pile-on begins, when social media acts as amplifier of all of our worst qualities.

That’s exactly what you need to avoid. Every consumer-facing business needs to protect its public image zealously. In the era of social media that means being connected, being aware, and being responsive.

People will forgive a lot if they know you’re listening, and if they see you trying.

It’s not hard – yes, it will consume resources, as employees will need to pay attention to social media, and have the capacity to respond before things grow out of control. But the alternative is to drown in unanswered negativity.

Does the board get a quarterly ‘social media report’ that helps you to understand what is being said about you?

Now let’s take everything that we’ve already covered and turn it upside down and inside out.

PART THREE: INSIDE/OUT

So far we’ve used the best available technology to generate leads and close the sale. That’s great, but we need to be thinking bigger. The tools we have on offer can do more than this – just by rethinking how we use them.

Let’s walk this landscape again, but this time from the customer’s – now homeowner’s – point of view.

When the homeowner asks “Alexa, where should I live?” they’re asking Alexa to condense and summarise everything Alexa knows about their likes and dislikes. It’s presumed that Alexa knows this, because Alexa – or something like it – has been a close companion for years. They’ve grown up together. That intimacy implies enormous familiarity. That familiarity means there’s much that never needs to be said – it’s simply taken as given.

Alexa knows how much space they need, how many kids they have, how much they spend on groceries and gadgets and what kind of music and movies they enjoy. Alexa knows when they need an Uber, and when they go to bed.

All of that helps Alexa make a decision, but that decision can be made in consultation. You can engage with that decision-making process, in a back-and-forth negotiation of features and price that creates an optimum offering – one that balances needs against costs to create something that is almost literally irresistible because it wasn’t designed by you, it was designed by Alexa, based on everything it knows about the homeowner.

This is the other side of artificial intelligence and big data. This is a side we don’t lean into because it hasn’t been much for revenue generation. In a world of mass production, customer choice might involve particular colour — but not a whole lot more. With a home, much more detail and depth can be developed in concert with the homeowner, and in a manner that’s mostly invisible to the homeowner. It’s Alexa talking to Peet, co-developing a proposal.

By the time the homeowner sees anything it’s more than refined; it’s an as perfect-as-possible reflection of that homeowner.

You already offer all sorts of options to the homeowner. That’s already standard practice. But that process is manual and time consuming and fraught – because people are rarely sure they’ve made the right choice. Using artificial intelligence and profiling in this way helps the buyer through the options toward a design that they’re going to love.

And depending on how free Amazon wants to be with its data (Facebook is probably a lot more free with their data, but that’s gotten them into heaps of trouble lately) you can do your market research by examining the tastes of hundreds of thousands of potential customers, sifting through their desires to help direct your development choices. Via assistants like Alexa, development seamlessly becomes co-development, a partnership that benefits both parties.

Now let’s come back to social media – both the amplifier and curse of modern businesses, and turn that around, too. Peet doesn’t just build houses – it creates communities. One of the most enduring complaints about communities is that it’s difficult to connect with and come to know one’s neighbors. You can live next door to someone without knowing that you might share a common interest, or have something to teach one another.

Back in 2011, I drafted a plan for City of Sydney which looked at their 2030 vision for a City that was ‘connected’. For them that meant lots of bike paths.

That’s a great thing – but it overlooks the real need for the residents to be connected, establishing relationships around common interests. This does happen naturally, but – as I pointed out to them, and want to impress upon you today – we have quite excellent tools to help us connect together around common interests, and we can use that build the bonds that form strong communities.

Think Facebook, but instead of billions of members, just hundreds. All local. All within the community. All with great tools to help them connect, to share, to organise, to plan and to do great things.

It’s not that everyone will take these tools up – many people simply won’t have time. But the time will come – for almost everyone in the community – when they’ll be glad those tools are there, because those connections will help them through a difficult moment, or something they simply haven’t encountered before.

On Facebook and Twitter and Instagram, we can forge global communities around a particular interest inside of an afternoon. It’s time to turn that around, and go local with those community social networks.

And – most importantly – Peet is deep inside these community social networks – listening, responding, assisting. This is the way you connect yourselves to the daily lives in the communities you build. Build it into the communication. Build it into the fabric of the community. Then you never have to worry about being thought of as an ‘outsider’. You’ll always be the ultimate insider, right at the center.

When you plan your next community, develop a community social media strategy that’s embedded at the core of that community. Make that a key point of difference. Lean into it. And be prepared to follow the community’s lead, because they’ll take you into all sorts of unexpected places, all while building enduring relationships.

It’s going to be the best sales tool you’ve ever seen.

Now for the final turn around, we’ll take the connection to these assistants, put it together with the community social media platform, and put it all through augmented reality. It’s no longer a tool that helps close the sale. Now it’s a tool for community planning – driven by the community, shaped by these AI assistants, and presented for inspection, review, comment, and improvement. This closes the loop, because now every aspect of the community is co-developed, through a community process that’s supported by community social media, and can be seen by all.

Again, not everyone is going to have time for this, but if something is going in on your street, or in the lot next to yours, you’re likely to be very interested – and grateful for the opportunity to both review and contribute. Nothing is a surprise, because the homeowner has seen it all, had input in all of it, and discussed with the community before it happens.

These community planning and development decisions are among the most fraught, because they often feel like they’re being dropped in by outsiders who don’t understand the needs of the community. This approach short-circuits that. With this, there is no point where the homeowner is outside the decision-making process. They’re always on the inside, always invested in the best possible outcome – for themselves, and their communities.

Now that’s not ever going to be perfect. There are always going to be disagreements. But at least they’ll be open – where they can be reviewed, discussed, and mediated within the community. It’s not perfect, but it’s far better than how we do things today, and represents a new model for co-development of a community.

It’s where we’re going, and Peet has a unique opportunity to lead the way there.

PART FOUR: DENSE FUTURES

There’s so much more that I want to to cover – but we’ve got limited time. So we’re going to pick up the pace just a little bit and touch on some developments that are emerging, important and might represent new opportunities for Peet.

Sustainability is a core Peet value. It’s going to be a huge part of the what customers look for in their homes. And a huge part of that is going to center around energy.

A West Australian company – Power Ledger – leads the way into part of that solution. Two years ago they developed a technique that allows neighbors to sell their solar power to one another. That’s always been possible, but the accounting made it cost prohibitive. Power Ledger provides the underlying software support for a system that seamlessly and inexpensively tracks who’s selling power, to whom, and how much the buyers must be billed for that power.

Power Ledger means that every Peet homebuyer can now have a solar power option on their build – with a ready market of customers for that power, right in their neighborhood. Local generation of solar power is increasingly inexpensive – and while it’s not as efficient as a gigantic solar array, it’s cheaper than the ever-more-expensive power delivered over privatised power grids. The homeowner can now build their energy costs into their build costs – and have a revenue generation built in. Power Ledger and Peet are an ideal marriage: you build solar-powered communities, they provide the accounting that makes it all work.

Another drive to sustainability comes from a different direction – the drive to density. Three generations of aspiration for a house on a quarter acre suburban block have ended, replaced by a desire for urban density and flexibility. This echoes the arc of the Millennial career, which no longer moves in a straight line through the major passages of life – graduation, marriage, children, retirement – but now bounces from point to point like a pinball. A twenty-five year old doesn’t know what they’ll be doing when they’re thirty-five, and looks for the kind of home that offers the same open-ended possibilities.

Over the last three years we’ve seen the emergence of a new kind of high-density urban living, as represented by three different startups: WeLive, Starcity and Loftium.

A subsidiary of the co-working office space provider WeWork, WeLive offers furnished apartments with all sorts of amenities – for a few days or for a few months. It’s not quite a hotel, nor quite an executive apartment, but something that looks to serve a flexible and mobile workforce.

Starcity leans into this trend, offering ‘community homes’. A recent New York Times article decried this rise of ‘adult dormitories’ – where residents have a private bedroom, and share common spaces such as living and kitchen areas.  They’re marketing tagline is ‘We’re bringing community back to the city.”

Hold that thought, we’ll come back to it in a moment.

The final startup to look at is Loftium – they’re offering a way for Australians to afford the enormous down payments needed to buy a home. How? They offer a deal: a downpayment for the right to rent one of your rooms via AirBnb. It seems an ingenious idea – so long as they don’t run afoul of neighbors, zoning, or the hotel sector.

The future we’re heading toward is one that is less predictable, and more mobile. People may not need to move frequently, but they’ll want the freedom to do so – to follow a gig, a career, a partner, a dream. All of these opportunities exist in our cities. Cities offer density. Density is opportunity. The person you meet in your ‘community home’ tonight could be your business partner – or life partner – tomorrow.

21st century city living balances density, community and opportunity. There’s no one right solution for everyone. Some will want to be able to come and go, and the freedom of WeLive. Some will want the community support provided by Starcity. And some simply need to economic acceleration offered by by Loftium.

And this isn’t a new idea. Another recent article noted that until the postwar period, much of the housing within our cities came in the form of ‘community homes’ – famous residence hotels like the Barbizon in New York, all the way down to much more humble boarding houses. In many ways this is a reversion to a historical mean, a feature cities have always had.

Let’s tie this urban future into everything that we’ve already discussed. “Alexa, where should I live?” Who’s asking that question? When those words are spoken by a recent uni graduate, the answer could be something that looks nothing like a greenfields Peet development, but looks a lot like a Peet urban development, a development that’s been driven by deep research into the needs of a new generation who value flexibility and community.

Because you’ve already built your ‘community social networks’ in your greenfields communities, you know how to build them in these dense urban communities. Because you have deep knowledge of these homebuyers, you can craft a product that meets their budget – and their desire to be part of a community. In short, you have everything you need to pioneer a new kind of urban living – something that’s far beyond what’s on offer at WeLive or Starcity or Loftium, because it leverages your century of experience in creating communities, and multiplies that by what you’re learning from those communities and their assistants.

You have a few years to design and develop this next generation of products. Listen to the assistants. Help people imagine the future with augmented reality. Use community social media to cement strong communities.  Do all of that and by the mid 2020s, when someone asks, “Alexa, where should I live?” there will be only one possible answer: Peet.