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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

This Is the World Uber Has Made

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Uber has become so pervasive that the company is changing our vocabulary.

In everyday settings, we use Uber as a verb (as in “I’ll Uber to the ball game tonight”). In business settings, we use the term “uberization” or “uberfication” to refer to companies creating on-demand services such as home delivery of groceries or healthcare on demand. The Uberization of our vocabulary is a perfect example of how technology enables a change in consumer behavior. Thanks especially to the uptake of smartphones and apps, consumers are making purchasing decisions faster, and we’re expecting businesses to respond on our terms. The Uberization of our own consumer behaviors explains why Amazon has been embracing the use of automated drones to deliver goods faster and why brick-and-mortar businesses ranging from Nordstrom to Walmart are partnering with ride-sharing services to offer home delivery as well.

But is an on-demand world a happier one?

Walmart on Demand

On June 2, Walmart’s Chief Operating Officer Michael Bender announced that the $482 billion brand is piloting a grocery delivery program in select markets. Customers using the service will place grocery orders online and designate a delivery window. Walmart personnel will prepare their orders and may have a ride service such as Deliv, Lyft, or Uber deliver the items to the customer’s door. Customers will pay a delivery fee directly to Walmart as part of their online order rather than fuss with paying a driver along with the grocery order. If the process works as Walmart intends, customers will be able to order what they want online once, and all the prep and delivery will occur behind the scenes. As noted on Walmart’s blog, Sam’s Club has been piloting a similar program in Miami since March.

On-Demand Businesses Continue reading →

How a church emulates Starbucks

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In previous blog posts, I’ve discussed how marketers can learn a thing or two from the techniques of televangelists and how religious institutions like Willow Creek Community Church have successfully adopted secular marketing tactics. Now comes the June 13 Wall Street Journal, which discusses how U.S. churches are acting like global brands. To wit:

  • The 8,000-strong Flamingo Road Church operates four locations in Florida and virtually through a location on Peru. The church seeks to grow to 50 locations and 100,000 members, not unlike a multi-national corporation. And, just like a global brand, the church uses its own logo, visual identity, and music at all its locations. Church leader Rev. Troy Gramling told The Wall Street Journal he seeks to copy the success of Starbucks and wants to develop “the look, the feel, the branding idea, of what Flamingo Road is.”

Sounds like a CEO talking! But I have some free marketing advice for the reverend: if you really seek to build a global brand for your church, lose the name. Flamingo Road Church is named after its Florida address. But I’m thinking Sin City.

Some might find it distasteful for a religious institution of any denomination to so nakedly embrace marketing. But religious institutions are no different than secular organizations that seek to attract and retain members: they need to make themselves known if they’re going to succeed. And like secular organizations, they can choose any manner of tasteful or obnoxious ways to spread their message through marketing. For instance, Rev. Gramling of Flamingo Road maintains The Potential blog where you can have a conversation with him. Opening up a dialogue in the blogosphere is a natural and smart move. But on the other hand, “prosperity minister” Mike Murdock uses a website and TV appearances to grovel for cash and make vague pronouncements about achieving wisdom. I have no idea what his message is except that he wants your money.

Regardless of whether you share their beliefs, you can see some marked differences in how they use marketing: Gramling being forward looking and conversational, Murdock employing the tired old approach of talking at you.

One cautionary note: for many years Willow Creek became the model mega church of smart marketing by offering people a vibrant, show-biz style alternative to the church-going experience. But Willow Creek focused too much on attracting members with contemporary music, skits, and other forms of experiential marketing. The church didn’t put much thought into keeping its “customers” after they’d joined. The church failed to customize its approach, and now it’s been reeling from a membership exodus. Let’s now see how a religious institution adapts its marketing and “service” approach.

How a church emulates Starbucks

Posted on by
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In previous blog posts, I’ve discussed how marketers can learn a thing or two from the techniques of televangelists and how religious institutions like Willow Creek Community Church have successfully adopted secular marketing tactics. Now comes the June 13 Wall Street Journal, which discusses how U.S. churches are acting like global brands. To wit:

  • The 8,000-strong Flamingo Road Church operates four locations in Florida and virtually through a location on Peru. The church seeks to grow to 50 locations and 100,000 members, not unlike a multi-national corporation. And, just like a global brand, the church uses its own logo, visual identity, and music at all its locations. Church leader Rev. Troy Gramling told The Wall Street Journal he seeks to copy the success of Starbucks and wants to develop “the look, the feel, the branding idea, of what Flamingo Road is.”

Sounds like a CEO talking! But I have some free marketing advice for the reverend: if you really seek to build a global brand for your church, lose the name. Flamingo Road Church is named after its Florida address. But I’m thinking Sin City.

Some might find it distasteful for a religious institution of any denomination to so nakedly embrace marketing. But religious institutions are no different than secular organizations that seek to attract and retain members: they need to make themselves known if they’re going to succeed. And like secular organizations, they can choose any manner of tasteful or obnoxious ways to spread their message through marketing. For instance, Rev. Gramling of Flamingo Road maintains The Potential blog where you can have a conversation with him. Opening up a dialogue in the blogosphere is a natural and smart move. But on the other hand, “prosperity minister” Mike Murdock uses a website and TV appearances to grovel for cash and make vague pronouncements about achieving wisdom. I have no idea what his message is except that he wants your money.

Regardless of whether you share their beliefs, you can see some marked differences in how they use marketing: Gramling being forward looking and conversational, Murdock employing the tired old approach of talking at you.

One cautionary note: for many years Willow Creek became the model mega church of smart marketing by offering people a vibrant, show-biz style alternative to the church-going experience. But Willow Creek focused too much on attracting members with contemporary music, skits, and other forms of experiential marketing. The church didn’t put much thought into keeping its “customers” after they’d joined. The church failed to customize its approach, and now it’s been reeling from a membership exodus. Let’s now see how a religious institution adapts its marketing and “service” approach.