Tag Archives: Dash

The Four Elements of the On-Demand Economy

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Big brands continue to transition to the $57.6 billion on-demand economy, which is characterized by the complete removal of friction from consumer purchases:

  • Jaguar and Shell recently rolled out a partnership to make it possible for people to prepay for gas from their in-car infotainment touchscreens. By using Apple Pay or Paypal configured in a Shell app, Jaguar drivers in the United Kingdom can select how much gas they want and prepay without needing to take out their wallets. The service will expand globally.
  • Walmart now allows customers to bypass lines at its in-store pharmacies. Pharmacy customers use their Walmart app on their mobile devices to order prescription refills and then use an express lane to move ahead of the customer service line and retrieve their orders. Customers can also track order status and view pricing details.

Product preordering is hardly new. As I have discussed on my blog, brands such as Starbucks and Panera Bread have been offering preorder services for a few years. But businesses such as Jaguar and Walmart help legitimize preordering, which is one of the elements of the on-demand economy. Meanwhile, many brands continue to develop services that deliver products to consumers on demand. Amazon removes friction from online (and offline) buying with Dash buttons and Amazon Go stores. Retailers such as (Walmart among them) have launched services that make it easier to either pick up products or have them delivered to your home. Uber deserves credit for being the on-demand catalyst. Now the legacy brands are learning and adapting.

The Four Elements of the On-Demand Economy

The “on-demand brands” typically adopt one or more of the following four elements of the on-demand economy:

  • Making it possible for consumers to prepay and avoid needing to reach for their debit cards or for cash, a model that fueled Uber’s rise. Prepay works especially well with high-volume products that rely on repeat purchases and low consideration, as is the case with Panera, Starbucks, and Walmart’s pharmacy. Typically customers know what they want before arriving at the store and don’t want to spend a lot of time choosing among products.
  • Delivering products to consumers on their own terms, often at their own homes, faster than ever before. For instance, Amazon has launched drone delivery in the United Kingdom to speed up product delivery and is preparing to do the same in the United States. UberRUSH partners with brands such as Nordstrom to offer product delivery, and business such as Heal in Los Angeles bring doctors to your doorstep. These types of services appeal to a variety of demographic segments, ranging from busy parents to urbanites who don’t own cars and lack time to pick up their products. But fulfilling product orders in an on-demand fashion does not need to require the brand to deliver products to the home. Walmart is experimenting with Pickup and Fuel concept stores, where customers order online and then drive to Walmart to have their groceries loaded into their cars by employees.
  • Relying on mobile devices such as phones and wearables. One cannot overstate why mobile has been integral to the rise of the on-demand economy. Mobile searches overtook desktop searches two years ago. There are almost as many mobile phone subscriptions as there are people on earth (which took only 20 years to happen). As Google noted, mobile phone users typically want things done in the moment — what Google calls micro-moments of demand. During micro-moments, people make instant decisions about where to go, what to do, and what to buy: about 76 percent of people who search on their smartphones for something nearby visit a business within a day, and there was a 2.1x increase in mobile searches for stores open now and food open now from 2015 to 2016. Those findings make intuitive sense: when you’re on the go, you don’t have a lot of time to do complex research for things to buy.
  • Using on-demand marketplaces in which people tap into a pool of available inventory to get what they want. Examples of on-demand marketplaces include Uber, Lyft, and Zipcar for either getting a ride (Uber and Lyft) or renting a car quickly. A number of on-demand marketplaces have popped up in local markets to service different industries. For instance, in Chicago, ParqEx connects people who want to rent their parking spaces with people looking for parking in the moment. Many pundits associate Airbnb with the on-demand economy. But I think Airbnb’s success has more to do with opening up a broader inventory of lodging options as opposed to making them available on-demand. Browsing Airbnb is more of an “I am traveling and want an interesting alternative to a hotel” than “I need a place to stay now.”

Voice and Self-Service

The on-demand economy is evolving rapidly in a number of ways, mostly notably through the rise of voice search. Voice search ads a layer of complexity to on-demand transactions: with our voices, we can request more complex services and products. We can ask Alexa, “Tell me where I can watch the movie Get Out this afternoon and use my Stubs discount card” or “Where can I get barbeque ribs in the west Chicago suburbs?” Businesses that want to be found during those open-ended searches need to optimize their online content and data so that they are visible for voice search. Businesses that understand how to make themselves visible for voice will capture more on-demand queries, thus being part of the on-demand journey, from awareness to consideration to purchase and service.

Another major development is the use of buy buttons such as Amazon Dash to enable self-service on-demand. The Amazon Dash button turns any object into a smart device for replenishing items such as laundry detergent. Amazon reports that the Dash buttons, available to Amazon Prime members, have taken off. According to Amazon, Dash button orders occur over twice a minute, and for many popular items, more than half of orders are done via Dash buttons. The list of brands signing up for the program include Campbell’s Soup, Cascade, Clif Bar, Mentos, and Quilted Northern, to name but a few. All told, more than 200 Dash buttons exist.

It’s easy to foresee a time when Amazon will turn the Dash button into an auto-order device that uses sensors to replenish certain products without the consumer even needing to click a button. Auto on-demand may take hold in other industries and forms for products that are ordered often. For now, brands are responding when consumers call — and faster than ever.

Image source: nextjuggernaut.com

Amazon Dashes to the On-Demand Economy

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Sometimes change wears an awkward smile. When Amazon launched Dash buttons for instant re-ordering of products in 2015, the idea seemed so goofy that some considered the announcement to be an April Fool’s Day joke. Amazon actually expected people to affix WiFi-enabled hardware devices to any object in our homes so that we could restock on diapers and detergent with the simple touch of a button?

But Amazon was deadly serious. The Dash buttons, available to Amazon Prime members, have taken off. According to Amazon, Dash button orders occur over twice a minute, and for many popular items, more than half of orders are done via Dash buttons. The list of brands signing up for the program include Campbell’s Soup, Cascade, Clif Bar, Mentos, and Quilted Northern, to name but a few. All told, more than 200 Dash buttons exist. They give consumers convenience; and for brands, revenue and access to consumer purchase data.

As it turns out, people find it useful to turn their appliances into smart objects. For instance, if you place a Tide Dash button on your laundry machine, you make it easier to restock on detergent at the precise moment when you realize you are running low, presumably when you are doing laundry with the machine nearby. All you need to do is click on the Dash button, which triggers the instant order. No muss, no fuss, no online shopping cart.

On January 20, Amazon officially expanded the use of Dash buttons on the Amazon home page. (Note the irony here: a business that started as an online retailer launched a physical product and brings it to the online world). You can create your virtual Dash button by choosing an “Add to Your Dash buttons” option on a product’s detail page — but Amazon is also creating them automatically for products you order often or have ordered recently. The buttons are available for both desktop and (more importantly) mobile use — thus turning your mobile phone into an all-purpose dash button.

The Dash buttons are succeeding because Amazon has tapped into a broader trend toward on-demand shopping and living. Uber famously triggered the advent of the on-demand economy with its convenient app that made traditional taxi services look antiquated. Now businesses ranging from Nordstrom to Walmart have been incorporating apps, drones, ride-sharing services, and other forms of on-demand ordering and delivering. According to the Harvard Business Review, the on-demand economy generates $57.6 billion and attracts 22 million consumers annually.

And mobile is crucial to the uptake of on-demand living.  Since 2013, consumers have preferred using their mobile devices over laptops and desktops to interact with retailers online. As Google has reported, we are increasingly using our mobile devices to decide what to do, where to go, and what to buy — and in on-demand fashion. For instance, half of consumers who conduct a local search on their smartphones visit a store within 24 hours.

Google calls these moments of instant decision making “micro-moments.” Amazon intends to capture its share of those micro-moments by making it easier to order products with our phones, which is where Dash buttons on our mobile phones come into play.

Apps such as Instagram and Pinterest have incorporated their own equivalent of Dash buttons, but none of succeeded like Amazon has. Why? Because Amazon had already established itself first as a strong product discovery shopping platform long before incorporating the Dash buttons. And it took years for Amazon to ingratiate itself into our buying habits. The Dash buttons would come later.

Amazon patiently embedded itself into our everyday routines by becoming a user-friendly platform for finding and buying things on our own terms. Dash buttons are just part of its strategy for making shopping an even more natural part of our lives:

  • Dash buttons on our laptops and home appliances for ordering via touch.
  • Alexa in Amazon Echo, automobiles, and phones for ordering via voice.

With Dash — and the much bigger Alexa — Amazon is leading the uptake of the on-demand economy everywhere through natural actions such as clicking and talking. No longer is Amazon a retail engine. It’s a lifestyle brand for the on-demand economy.

Related:

“Why Voice Search Is the Future of the On-Demand Economy,” June 14, 2016.

“This Is the World Uber Has Made,” June 7, 2016.

“Welcome to a New Era of Convenience Shopping,” June 29, 2015.