PRIVATE REPORT LABEL MARKET
Strategic Innovation
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Most consumer related business decisions can arguably be simplified down to one main goal- competitive advantage. The four main types of competitive advantage are cost leadership, differentiation, defensive strategies, and strategic alliances. Specifically for our multifamily clients, all four of these are directly related to the strength of their amenity offering and their ability to innovate. “Necessity is the mother of invention,” and in times of economic uncertainty the need to strategize new ways to connect with consumers is heightened.
Of course, innovation always carries a level of risk that must be weighed against potential loss. One type of risk that helps mitigate this is by adopting practices from other markets that are already tried and tested. For example, several years ago we discussed a typical time share concept with one of our senior living clients - being able to amenitize their network by offering a way for residents to rent suites in other properties for travel, like a vacation ownership program. Since then, they have successfully created the Revel Seasonal Residences, one of the only programs of its kind that exists currently for multifamily senior living properties.
““Necessity is the mother of invention,” and in times of economic uncertainty the need to strategize new ways to connect with consumers is heightened.”
“Another way to innovate with potentially lower financial risk is to utilize current amenities or spaces in a new way to create new revenue streams or generate higher renewal numbers
This represented a comparatively low risk opportunity because most residents were already familiar with the concept in the hospitality market. Their residents can now easily travel between properties that are a part of their Revel brand while also enjoying the level of service they are accustomed to at their home base. It is probably just a matter of time before more of our clients realize they could benefit by introducing similar programs to connect their assets and further foster brand loyalty.
Another way to innovate with potentially lower financial risk is to utilize current amenities or spaces in a new way to create new revenue streams or generate higher renewal numbers. Some examples we have seen of this (and some we haven’t seen in multifamily YET) is to introduce food and beverage services to residents, community gardens, retails spaces, gear garages for equipment rentals, or open spaces for use to nonresidents or community organizations.
Photo Info: Skyline, Falls Church, VAA study done last year by Venn, an international resident experience company, found supporting evidence that renters are more likely to renew their leases if they feel connected to the neighbors and their community. Creating programs that develop this connection while also adding potential new revenue streams is a win-win for properties. While pretty much all current community amenity programs include resident lounges, co-working spaces and common rooms, most renters recently surveyed don’t base their renting decisions on whether a community has those spaces, but rather on if those spaces allow for connections to local businesses, expanding their social network, or creating opportunities for volunteer work.
Pre-COVID, the amenity arms race was all about bigger, better, newer with cutting edge technology, full-service recreation spaces, and high design common spaces, but the post-COVID world is less about the spaces and more about the connections those spaces can foster. More and more, consumers are seeking experience over product, and understanding consumer motivation helps property managers and developers make smarter strategic decisions to further advance their offering.
Photo Info: Skyline, Falls Church, VA
“More and more, consumers are seeking experience over product, and understanding consumer motivation helps property managers and developers make smarter strategic decisions to further advance their offering.”
