Perhaps the most rapid rise in consumer technology in the last 5 years has been the “Uber for X” companies, a set of on-demand mobile applications that get consumers what they want, when they want it.
I had a chance to speak on a panel earlier this week at the Open Mobile Summit called “The Rise Of The On-Demand Economy” with fellow panelists from Shyp and Sprig. Given these companies fast-growing importance to consumers, they’re something the brands using Partnered always want to know about.
In preparing for that talk, there were three words that kept coming up that will shape the on-demand economy in the coming years.
The whole on-demand trend started in transportation with Uber. The smartphone gave app designers a new creative playing space and the asset of being able to geolocate you anywhere at any time. Uber started as a black car service designed to make people feel like they were riding in style during special occasions but quickly became the ubiquitous option for people in cities. One example of its transformative power: Uber now does multiple times the volume of rides that the entire cab industry did in San Francisco before Uber was founded.
It wasn’t long before on-demand mobile moved into other areas. Caviar gave high-end restaurants a sensible way into delivery, while companies like Sprig & Munchery created a new type of fast, healthy meal option. Shyp brought on-demand to postal services, while companies like Omni are creating an on-demand version of self-storage. Eden is on-demand for office services like IT installation and repair, and if for some reason that tech gets frustrating, Drizly can provide your on-demand happy hour drinks.
The point is that anything that doesn’t have an on-demand service yet likely will. Early though we are in the lifecycle of many of these startups, “variety” is actually becoming “ubiquity.”
Still, even with ubiquity, there are constraints in how many companies can be major players. One of the major drivers shaping the industry in the next year or two will be consolidation in which players merge and acquire other companies offering similar services in order to better compete.
Just this week, for example, Deliv — a company which provides turnkey on-demand delivery for retailers — acquired NYC competitor Zipments. The acquisition increased Deliv’s volume and made them the instant leader in their space in New York. The acquisition followed their June scooping of WeDeliver, which provided a similar path to growth in Chicago.
On demand homecare company Handy has taken a similar strategy. In 2014, the company acquired Exec to gain a foothold in the important Bay Area market and towards the end of the year bought London-based Mopp to fuel expansion into the UK market.
This is to say nothing of the 800 lb gorillas in the room like Uber. As some on-demand companies reach massive scale, the big question is whether they’ll use their logistics infrastructure and the excess capacity (in terms of space or time) of their labor forces to layer additional delivery & task services.
The final word that will shape the on demand economy is “expectation.”
When it comes to consumer expectation around on-demand, the genie is firmly out of the bottle. In just a few short years, we’ve been completely retrained to expect that anything we want can be delivered to us, wherever we are, within a few hours.
This has massive implications for how every brand thinks about servicing its customers. For many, it will require a new layer of consideration around service and shipping that wouldn’t have previously shaped a customers purchasing decision.
If the on-demand trend creates a new challenge though, it also creates massive new opportunities. For retailers, same day delivery is the bridge that makes the barrier between e-commerce and physical commerce completely permeable. Done well, this means a much greater ability to drive important offline retail behavior like impulse buying online.
Maybe the final word we should consider is “experimentation.” While it may be clear that on demand is a consumer force that brands must reckon with, how they do so is going to be determined by experiments. CPG’s like Mondelez are already experimenting with using delivery as way to build more direct relationships with consumers, and it’s likely that many others will follow suit. What’s for sure is it’s going to be a fun time to be a consumer.
This article was written by Baldwin Cunningham from Forbes and was legally licensed through the NewsCred publisher network.