GeoMarketing 101: What Is The On-Demand Economy?

7.6 million Americans will work as providers of on-demand services by 2020, Intuit has forecast. Why?

From geo-targeting to beacons, location-based technology is opening up a world of possibilities for marketers — but it’s also complicated, as new capabilities and use cases seem to emerge every day.

With the goal of breaking down some of the most important “geo” concepts to provide a better understanding of the basics — and a jumping off point for exploring how far the power of location may take us — we introduce the next installment of our GeoMarketing 101 series: understanding the on-demand economy.

What Is On-Demand, Anyway?

We talk a lot about the on-demand economy here at GeoMarketing, but what does that term actually encompass?

The on-demand economy refers to the economic activity created by digital marketplaces that give consumers immediate “on-demand” access to goods and services. At present, this is primarily app-based: If you can push a button on your mobile device and then get something delivered to you immediately or near-immediately, that’s on-demand.

This economy, which includes thousands of popular apps like Uber, Instacart, and more, is sometimes referred to in different ways: the on-demand economy, the gig economy — but hey, a rose by any other name, right?

Why Has It Been So Successful?

It’s fairly easy to see how on-demand apps have transformed the world with their innovation. Need a ride in two minutes but you don’t have a vehicle? Once, you might have searched for an available friend with a car or stood on the street trying to hail a taxi. Now, Uber (or Lyft, or Gett, or Via) has you covered. Need a missing ingredient for a recipe ASAP but can’t leave the house? Pick up your phone and look no further than Postmates (or Instacart, or… you get the idea.)

But the biggest part of what makes today’s most popular — and profitable — on-demand apps a true step forward from just ordering delivery over the phone from a local restaurant? The seamless integration of location data.

Location plays an integral role for the majority of on-demand providers because in order to deliver a good or a customized experience to a consumer, a business has to know where that consumer is.

For a simple example, look to on-demand pioneer Uber. It is through the power of location data — Uber has been working to build out its location technology in-house — that the company can determine where you are, how far away your car is, and even show you where your driver is in route. Personalization, immediacy, and transparency are what today’s consumers want, and delivering this experience is what powers the on-demand economy. Location data makes that possible.

Another reason customers spend so much on on-demand services? The ease with which it connects the online and the offline worlds. People still need all kinds of physical goods — food, clothes, you name it — even if they don’t have time to spend on going to a store every day. This is where on-demand apps come in: They connect busy customers with the physical goods and services they need through their most personal device. Read more about the importance of bridging the online and offline worlds, here.

With companies branded as the “Uber of X” springing up everywhere, there has been discussion of when (or if) the on-demand bubble will pop. But with consumers becoming increasingly mobile, there is an irreversible trend toward using personal devices to interact with everything in the digital and physical worlds — and as such, it’s likely that we haven’t even seen the golden age of on-demand yet.

About The Author
Lauryn Chamberlain Lauryn Chamberlain @laurynchamberla

Lauryn Chamberlain is the Associate Editor of A New York City based journalist, she specializes in stories related to retail, dining, hospitality, and travel.