How the on-demand economy is transforming customer experience

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Humans have always valued convenience. As a species, we have consistently invented new products and processes designed to make our lives easier. Today’s consumers, though, have taken the notion of convenience to a whole new level – and it’s completely transforming the way companies do business.

It has led to a rise of on-demand players entering the market. Usually found in the form of app-based digital marketplaces, these on-demand platforms give consumers access to the goods and services they want, on their own terms. With services such as Uber and Airbnb, consumers can hire a cab or book accommodation with a few taps. These services have disrupted entire industries by understanding consumer pain points and being smart in removing them through technology.

According to the Harvard Business Review, 22.4 million customers are turning to on-demand services annually, accounting for $56.7bn in spending.

“Customers love convenience and accuracy, and will actually pay more for it in truth,” said futurologist and Global Futures and Foresight CEO David A. Smith at the Digital Advice Live! 2017 conference in London.

Indeed, 64% of consumers are willing to part with more cash for a simpler, more convenient experience, according to the Siegel & Gale Index 2017.

On-demand services have shown consumers what’s possible. As a consequence, they now expect all of their transactions to be just as convenient – making it essential for traditional businesses to adapt.

The convenience of speed is a common attribute offered by all on-demand services, satisfying the modern customer’s desire for instant gratification. But convenience isn’t limited to immediacy alone. There are a number of tactics and technologies companies can adopt to transform their own customer experience to stay relevant in the era of on-demand:

1. Personalisation

Consumers are increasingly attracted to the way on-demand services personalise their offer. If you’re a huge fan of Jean-Claude Van Damme, Netflix - the video-on-demand service - recognises this and will recommend other action flicks you’ll likely enjoy. InstaCart, a same-day grocery delivery service, makes food shopping more convenient due to its detailed knowledge of your food preferences.

Customers like feeling valued and understood, which makes personalisation such a powerful tool. In fact, 72% of consumers now expect companies to have an understanding of their needs and expectations.

Infosys’ Rethinking Retail study found that personalisation had influenced the shopping decisions of 59% of consumers. Around three-quarters (74%) said they were frustrated when website content was not personalised.

2. Digital advice

Some companies are becoming hugely sophisticated in the personalisation space and adopting intelligent digital advisors that focus on creating a deeper level of customer understanding.

Digital advisors engage customers in human-like conversations to establish what they really need. They ask questions designed to narrow down the product selection before making appropriate recommendations based on the shopper’s answers.

Camera brand Canon and telecom giant T-Mobile are among the growing list of companies to implement digital advisors in their businesses to help shoppers discover and choose suitable products without having to navigate hundreds of pages.

3. Sharing economy

Consumers are becoming less concerned about product ownership and place more value on having flexible access to goods.

According to a Goldman Sachs study, millennials in particular are reluctant to purchase items such as music and luxury products, instead turning to services that provide access “without the burden of ownership”.

Think about the Spotify model; none of its customers own a single song, but access to its library of content for a rolling monthly subscription gives them flexibility and convenience.

It’s the way consumers want to do business now. And by 2019 it’s expected that more than half of all industries will be offering consumers flexible price plans.

4. Self-service

On-demand expectations are not limited to the sales process, either. Today’s consumers expect organisations to support them following a purchase – and that support has to be immediate and round the clock.

In McKinsey’s Winning The Expectations Game In Customer Care report, 40% of customer contact centre leaders said they believed their role will be obsolete within a decade.

The reason? Customers are no longer willing to wait on hold – or send an email – to get an issue resolved. They demand a quick and efficient 24/7 service. Indeed, 70% of consumers now expect self-service for handling complaints, questions, or issues via their smartphones.

5. Experience stores

As a result of the convenience and immediacy offered online, stores are challenged with redefining their roles. It’s now crucial for them to find a point of differentiation by adding value to the customer journey.

Think about it from a consumer perspective; if you’re not offering them an experience that can’t be replicated online, then what’s the motivation for them to visit your brick-and-mortar store?

Several stores are now realising the power of becoming experiential. For example, book retailer Foyles has experimented with offering complimentary yoga in one of its stores. Sportswear giant Nike has also built a full-sized basketball court in its New York hub in SoHo.

It’s a route more traditional retailers are going down, and it’s easy to see why. Highly engaged consumers are 60% more likely to purchase, while 77% of shoppers are more loyal to stores that provide a great customer experience.

6. Voice-command technology

While the smartphone was the device that gave companies such as Uber and Airbnb the platform to disrupt the status quo, companies wanting to stay ahead of the curve need to adapt their offer to emerging technologies that will inevitably make the customer experience even more convenient.

Voice is the next frontier. Currently, around 500 million people use their voice to search via their smartphones. By 2020, around half of all searches will be voice searches.

In addition, 40% of all mobile interactions will be handled by smart agents and virtual assistants, such as Amazon Alexa, Google Home and Siri.

This means that in the foreseeable future, even scrolling through a smartphone to find an app will be too much of an effort for consumers. Uber has already recognised this and has now made it possible to use voice to hail a cab. It’s a service consumers will increasingly come to expect.

The on-demand economy has indisputably caused disruption on an epic scale for several traditional companies, forcing some out of business altogether. The convenience on-demand services offer consumers has made it essential for organisations to continually strive to improve their own customer experience. If they don’t, they risk becoming totally obsolete.

So, “innovate or die” is the mantra to adopt. And that means good news for consumers.

 

About Markus Linder

markus linder

Markus Linder is the chief executive officer and co-founder of SMARTASSISTANT, the leading global provider of Digital Advice and Guided Selling technologies. SMARTASSISTANT supports retailers, brands, telcos and other service providers in implementing Digital Advice solutions, helping millions of their customers make better, smarter purchasing decisions.

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17th Nov 2017 21:16

Well the future is here and we live in the world of the Jetsons where instant push-button gratification will be the way everything works. Obviously what people want is whats going to inspire and motivate companies to come up with their next product or service. But I think what will be the most interesting to see is how the shared economy model inspires future business developments.

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