‘Uberfication’ Of Everything Means Good Things For SMBs, Local Economy
The local on-demand economy is all about technology, urbanization, and millennials, BIA/Kelsey finds — and opportunities abound.
While brick-and-mortar businesses have adapted to mobile payments and in-store pickups the last few years, the next step in drawing online dollars to offline is in aligning with the trend toward “on-demand” app-based services.
In a recent white paper, BIA/Kelsey turned an eye to this “local on-demand economy” (LODE), and the key factors contributing to its rise.
The breakout success of companies like Postmates and Uber reminds us daily of the growing momentum of the on-demand economy as a whole; consumers intrinsically look to their smartphones and connected devices to provide what they need in a way that matches the on-the-go lifestyle.
The BIA/Kelsey report focuses specifically on the importance of local when it comes to on-demand and the “uberfication” of everything. The movement can certainly be a boon to local retailers, through partnerships with “on-demand” apps — LA businesses recently teamed up with Uber, and Postmates continues to expand its local partners — as well as through SMBs’ ability to deliver personalized experiences that are more unique and locally-rooted than what a customer can get through ecommerce.
Below, a breakdown of three of the key factors BIA/Kelsey identified as driving today’s on-demand economy — and how, in understanding them, local businesses can boost sales.
- Mobility — Mobility and the smartphone revolution have created high-power computing to go, shaping user behavior and expectations for immediately fulfilled needs. Cultural factors, like the parallel trend in media consumption of VOD platforms like Netflix and Hulu, have also contributed. Now, marketers should watch for this trend to accelerate with the impending age of wearables — and begin to consider ways to leverage the new technology to offer users things like simpler payment options and unique in-store experiences.
- Generational — The millennial generation — emerging as a key component of the buying-empowered adult population — has a well-documented sense of entitlement and immediacy that provides a receptive environment for on-demand services. Targeting millennials with on-demand ordering options and customized features is often particularly successful.
- Technological — Lowered barriers to entry in the app economy have created an explosion of startups, helping to build “LODE” marketplaces and extend on-demand services into new areas. At the same time, evolving authentication technologies (such as Facebook Connect) help to make digital “reputation” a form of security and enforcement, keeping these LODE marketplaces safe and attractive. BIA/Kelsey concludes that, as a result, this is likely to be the area where mobile payments finally take root — and local businesses should be primed