Unless you’ve been living under a rock, you’ll have noticed that in recent years there has been a sharp influx of on-demand services, infiltrating more and more areas of our life. From food delivery to flowers to cannabis (yes, really), the number of opportunities at our fingertips is vast.
Three years ago, 76 businesses provided on demand services in just six industries according to Crowd Companies. But that number has rocketed. In 2016, I quite literally lived for a week (and a flat move) on on-demand services, using BuzzMove to find a removal firm, RatedPeople to install a hob and even Urban Massage for an in home massage.
And there’s been a language change: companies less frequently aspire to be ‘the Google of’; rather continuously pitching new ideas that promise to be ‘an Uber for’ new categories, particularly where on-demand is not yet offered.
It’s because people want things faster than ever: tomorrow is too far away. Consumer expectation is changing.
In the US, the on-demand economy is attracting more than 22.4 million consumers annually, and the number is expected to go up. It's estimated that by 2025 almost 38% of the UK's workforce will be part of the ‘gig economy’. Deliveroo grew by 600% in 2016 and now employs over 900 full-time equivalent staff. The stats speak for themselves.
But advertising is not moving fast enough to keep up with consumer demand. This year’s Christmas ads are case in point: creative, funny and whimsical. But what do they deliver other than something for people to talk about over the watercooler?
Consumers want the world at their fingertips. And they want it fast: according to Akamai, we expect 2.7-second (or less) load times; and optimal times for conversions range from 1.8 to 2.7 seconds across all device types. Uber’s success is attributed in part to its simplicity and speed: it takes approximately three taps to order a ride.
But in today’s fast-paced digital landscape - where new platforms and capabilities are popping up every day – advertising isn’t meeting the needs of digitally-savvy consumers. It’s no surprise that ad giant and industry bellwether WPP is facing difficult times, with revenues falling 1.1% in its most recent results.
In part, perhaps, because brands are too focused on comparing themselves with one another when it comes to digital experiences instead of worrying about how their target consumers are responding to their efforts.
In the meantime, innovators like Amazon going direct to consumer, are installing Dash Buttons in homes around the country, and topping it off with delivery straight to the kitchen table (Amazon Key allows Amazon delivery drivers enter your home and deliver even if you’re not there).
The marketplace landscape will be buoyant and active, particularly as focus spreads beyond capital cities. BIA/Kelsey estimates that the on-demand economy will serve just 7% of its $758 billion US addressable market in 2017: there is far more potential to grow. We’ve already seen Deliveroo roll out ‘Editions’ - prefabricated structures for restaurants that want to expand their businesses without opening expensive high street premises – in areas like Hove and Reading.
As more marketplaces are planned to launch, others will have landed more VC funding to conquer their vertical niche and we will be activating a whole range of new partnerships
By Max Moore, CEO of Booxscale
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