Is homebuilding ready for eCommerce?
There is a paradigm shift at hand in the new construction homebuying experience. Since May of 2020, the new construction market has been on an absolute tear. While builders are doing their best to capitalize on the current market conditions, they’re also aware that it won’t last forever.
According to John Burns in his July monthly housing update, “[The housing] supply will rise…prices may be cooling off to single digit appreciation.” As prices cool off, we will see increases in supply, putting home buyers in a position where they will have multiple choices of eager builders for their next home.
Forward-thinking builders looking toward future market conditions are recognizing the need to differentiate the buying experience, as the market levels out to something closer to “normal.” These builders have recognized through independent research, from organizations like Forrester, that a buyer’s user experience can be directly tied to revenue growth. Many are turning to eCommerce and other digital tools, which give buyers the means to take more control of the home selection and buying process. And there’s more research to back it up.
According to a 2020 Builder Funnel survey, more than half of those surveyed said using online tools and creating interactive content was a top priority for the next 12 months. That same survey found the priority for 69 percent of builders was converting leads to customers.
Additionally, an America at Home Study found that 58 percent of millennials, 49 percent of Gen X, and 28 percent of baby boomers are comfortable touring and purchasing a home completely online. Teri Slavik-Tsuyuki, one of the co-authors of the study explained it like this: “What people are looking for is an experience that meets them how and where they want to be met. So, not all digital necessarily — for some, there needs to be a balance between virtual and physical, and the goal is finding ways to enable your customers to interact with and contact your brand how and when they want.”
Nearly every home buyer begins their search for a new home online, and builders can struggle to stand out in a crowded field. Until very recently, the technology for a configurable visualization of a builder’s full offering didn’t exist. As John Burns put it in his July monthly housing update, “Digital displays must allow for customization, if you’re not doing that, you’re losing some sales.”
Imagine using an eCommerce strategy to cut design appointments from two to one. Or from four hours to 30 minutes. Then take the stress out of those meetings by having the customer make most decisions before arriving at their design appointment. Now the appointment is focused on excitement and finalization, rather than a laundry list of required boxes to check.
One of the major hurdles that has prevented widespread adoption of an eCommerce strategy for home builders is the lack of the infrastructure to properly configure, price, and visualize homes across multiple geographies and communities. Admittedly, high quality renderings and even digital walk-throughs have existed for years and have their place as a shiny marketing tool. But Paradigm has taken a more evolved approach.
Over the past 20 years, Paradigm has quietly implemented the configuration and pricing engine behind the majority of window and door manufacturers and home improvement retailers. By combining this configuration engine with a layer of configurable 3D models, Paradigm has filled the niche that prevented builders from fully entering the online marketplace. The company has built a complete end-to-end digital sales solution that combines the shiny lead-generation tools, while converting those leads to sales, configuring that customer’s home, and finalizing contracts — all without them leaving their couch.
As a result, Paradigm has a visual sales tool that allows a builder to move a buyer all the way from lead to closing, while providing a unified, streamlined experience. When integrated with a builder’s website, Paradigm gives buyers the power to find a community, reserve a lot, identify, visualize and price the models, pick structural options, and make material selections for the whole home.
Offering a home with an optional third-car garage? RV garage? Third floor? Finished basement? Gourmet kitchen? Window wall? Optional fireplace? Extended patio with a fireplace? Flex spaces? The list goes on. Paradigm models those options in real time, so your customer can see how that affects the design – and the price.
The technology Paradigm uses to manage options and create the 3D models “future proofs” a builder’s digital visualization investment, by having the flexibility to adapt to model changes and supply chain issues. For example, if the appliances visualized are no longer available, no problem. Send Paradigm the new appliance images, and they swap them out for the new offering. Same goes for light fixtures, flooring, cabinets, stone, countertops, door handles, windows, roofing, paint, chandeliers, etc. Paradigm even supports non-visual options and can set option defaults based on the package, model, community, region, or any other parameter.
Paradigm’s open integrations with existing builder systems allows builders to manage data in one place and share the most up-to-date version, whether it’s pricing, design options, contracts, or customer records. Those same integrations allow the builder to output the customer’s selections and turn them into material estimates and construction documents.
The unsung hero of the Paradigm platform may be its most valuable asset, which is the data the platform generates. Every buyer engaged with Paradigm’s tool is generating data points for the builder. This gives builders the ability to rapidly adapt their offerings to changing buyer preferences and market conditions. The Paradigm models also allow builders to get real and direct homebuyer feedback on new model ideas without the expense of building a physical model.
Builders can use Paradigm as an internal product development tool as well. Architectural reviews, creating new palettes using real-time preference data, developing new spec homes, rolling out new floorplan products, and testing a new supplier are all possible with the Paradigm platform.
Builders who have implemented Paradigm Omni for Homebuilders have seen gains in the efficiency of the design and selection process and the alleviation of design and selection bottlenecks. At the same time, buyers have gained the power to control their buying experiences through a visual selling tool built on a proven configuration platform that has led the building industry for almost a quarter-century.