A lot has changed since the 1990s dot com boom. Technology has improved dramatically (think: internet of things, cloud technologies, and artificial intelligence), offering convenience and efficiency to consumers. At the same time, consumer preferences have changed to prefer instant gratification and ease of use with devices such as smartphones and tablets.
We are in the midst of a new era some experts call "the on-demand economy." The on-demand economy is a term that describes businesses that offer products or services literally on-demand. Some examples of this include food and grocery delivery and transportation platforms that can connect sellers and buyers in ways we hadn't even imagined ten years ago.
With all the advancements in technology and remote culture on the rise, the on-demand economy is ripe for growth. Let's dive deep into the trends and see what's happening.
On-Demand Economy Trends
Studies show that 86.5 million Americans (or 42% of the adult population) have used an on-demand service. More and more younger people are getting into the game, with 51% percent of those using on-demand services being under 35 years of age.
Also, during the pandemic, the use of on-demand apps jumped significantly. As people were stuck at home under quarantines and closures, consumers had no choice but to use on-demand applications to order products and services. For example, food delivery apps saw an increase in downloads by 120%-200%.
Companies That Are Making Their Mark in the On-Demand Economy
There are many examples of prominent companies that are transforming the demand economy. Uber is disrupting the transportation industry with on-demand rides available in more than 10,000 cities. GrubHub and Instacart are food delivery apps that help consumers order takeout food from various local restaurants. These companies saw a massive spike in sales during the pandemic when many restaurants were forced to be closed and had to rely on food deliveries to stay in business. In the grocery and consumer goods marketplace, companies like Instacart, Walmart Grocery, and Shipt have gained many customers in recent years.
Why Are On-Demand Options So Popular?
There are many reasons why consumers choose on-demand service providers. Here are a few of the main ones.
Consumers want to order and receive products and services in an expedient way, and that's been true for years. Think about why Netflix outpaced Blockbuster and is now worth around $300 billion while Blockbuster went out of business. Netflix allows consumers to stream any film or TV show at any time and any place. There are no late fees, and you don't have to get into your car and drive anywhere.
That's the same reason Uber has experienced such tremendous growth. It provides a much more convenient (and pleasant) way to travel than ordering a taxi. And on-demand food and grocery services offer the same streamlined experience to customers.
Another benefit that on-demand companies provide is greater variety. Ebooks and audiobooks make virtually any book available to you right away. You don't have to order it online or from a library and wait two weeks. You can gain access to a greater variety of restaurants on GrubHub and a greater selection of movies on Netflix. Technology brings unprecedented variety to the average consumer that was unavailable even five or ten years ago.
The on-demand economy does not only help the consumers, but it also offers flexibility to its workers. Workers can choose their own schedule and gain the freedom they always wanted. This is a significant benefit for people that have been locked to a computer in a cubicle or doing eight-hour shifts in a store or plant. Today, many workers are starting to work for on-demand services such as food delivery and transportation as full-time jobs or as side hustles.
What Do On-Demand Companies Need to Be Successful?
To make a mark in an on-demand marketplace, companies need the right people, processes, and technologies. There are several things that on-demand companies need to do to keep hitting their goals.
- Create a flawless user experience. You must remove any barriers for users to sign up and use the service. Constantly innovate and optimize the user experience to improve ease of use and retention. Another innovative solution is to utilize "people as a service" and build a remote customer service team to handle all your customer questions and concerns.
- Focus on optimizing each touchpoint. On-demand services need a highly personalized omnichannel strategy that makes every user experience special. That means integrating all the platforms and tools the company uses and displaying personalized messages throughout all the marketing channels.
- Stay up to date on the latest trends. Competitors are entering the market at a record pace. On-demand companies need to conduct thorough competitor research and stay up to date with new technology and consumer trends to stay ahead of the pack.
- Develop unique selling points. Companies must differentiate themselves from others and continue innovating to stay relevant in today's marketplace.
- Use AI and automation. On-demand companies need to move quickly and analyze large amounts of data to perfect the user experience. AI and automation do a great job of improving the quality and productivity of the company while automating many processes across a variety of areas.
The On-Demand Economy is Here to Stay
The on-demand economy is on a rapid growth trajectory across all sectors. Sales are even higher than before the pandemic, and the complexity of technologies and the competition are becoming more significant challenges for companies.
Consumers are flocking to on-demand services because of the convenience, variety, and flexibility that they offer. And on-demand companies need to focus on creating a great user experience, staying up to date with the latest trends, and developing their unique selling points to remain competitive. They should also use AI, machine learning (ML), and automation while building remote customer service teams to win over their competitors.
Helpware offers all of these solutions — including "people as a service," technology integrations, and AI & ML optimization — and solves any technical issues for on-demand service companies. Book a call with us to see how we can help propel your on-demand business to new heights of success.