ReadWritePredict is a look ahead at the technology trends and companies that will shape the coming year.
Instant gratification can’t come soon enough. In 2013, the runaway success of Uber, the service that lets you call a car by tapping your smartphone, has gotten consumers, retailers, and investors thinking about a world where just about any good or service is available on demand. Increasingly, in urban areas, that thought is becoming a reality.
This has been a long time coming. You could buy a pizza online in 1994—though you had to disconnect from the Internet so the local store could call you to confirm your order. No wonder people persisted in calling in orders. Now—if you’re in the right places—you can get anything delivered to their doorstep simply by using an app.
Of course, instant gratification goes far beyond food delivery. Driving, shopping, lodging—even dating—have been transformed by this one-tap convenience. No longer do we need to go to a bar to meet people. Nor do we need to set foot in a mall to enjoy a world of selection. Need a hotel room for New Year’s? Forget booking ahead, just grab a discounted room at the last minute.
In 2013, the glimmerings of this trend sparked consumers’ desires for on-demand services. And it’s likely we’ll see this increase in 2014.
You Can Always Get What You Want
Various services enable people to get virtually anything delivered at the drop of a hat.
Postmates, one of the most popular delivery startups in San Francisco, Manhattan, Seattle and Washington, D.C., promises to deliver anything you want in under an hour. A sandwich? Done. Flowers? Easy. Clothing? Sure, why not.
Of course, new businesses like Postmates have to compete with the likes of eBay Now and Google Shopping Express, two corporate-backed services that deliver high-quality goods ranging from electronics to housewares to groceries.
When there is an app for everything, we expect things to be as simple as pressing a button. Even personal relationships have suffered—or improved, depending on whom you ask—because of applications that deliver potential suitors straight to your mobile device. Apps like Tinder, Grindr, and Down provide real-time updates featuring single people around you based on your location or network of friends, and let you communicate with them directly in the app. When it’s this easy to find a date, who needs icebreakers?
The on-demand trend has found its way into publishing as well. MasterCard announced a partnership with Condé Nast in October that allows readers of digital magazines to purchase items directly from an advertisement or article. The partnership, dubbed ShopThis, debuted on the tablet November edition of Wired.
There’s a dark side to all this convenience: Researchers are suggesting that the ease of commerce on mobile devices and the abundance of choice may be spurring us to buy more.
Everything’s Coming Up Uber
2014 appears to be a defining year for the on-demand movement.
But the question remains: are people willing to pay extra for convenience? It appears so, if only to a point.
Uber found itself in hot water recently when its surge pricing strategy forced many riders to fork over hundreds in a snowstorm. Uber’s CEO defended its pricing practices—significantly up-charging riders during high-demand times—but some customers were not appeased.
So while users might not balk at putting up a few extra dollars for a black Town Car over a traditional cab, fares two times the normal limit—sometimes much higher—can incite outrage. Uber has said the alternative is not to have cars available—which is the fate of any consumer trying to order traditional car service over the phone on New Year’s Eve.
It’s not clear, though, if surge pricing will translate to other types of on-demand delivery. The biggest players seem to be playing it safe with pricing. Google Shopping Express is free for the first six months, while eBay charges $5 per order. Amazon is experimenting with delivery fees that range from free to $9.99, depending on the order size, as well as a membership service that charges $299 for unlimited deliveries. Unlike Uber, which at times copes with excessive demand, these players are trying to stoke more demand so they can build efficient delivery networks.
To become mainstream marketplaces, on-demand services will have to find the balance between pleasing customers and making money. Companies will continue to experiment in order to provide the perfect model. But with consumer habits shifting, 2014 may be the year they have to deliver.