The on-demand economy movement is big — and getting bigger. It’s poised to disrupt trillions — yes, trillions — in GDP, according to Scot Wingo, executive chairman of ChannelAdvisor. Nearly half of all U.S. consumers have tried at least one on-demand service. The appeal? Zero friction. Consumers tap a button and their ride arrives, dinner is ordered, the printer cartridge is on the way to the office, etc. This trend will derail retailers that can’t or won’t get on board.
Over the next few years, e-commerce sites and social media pages will likely become a smaller “front door” for online buyers. The new digital storefront offers many doorways for customers, including options to shop or buy via a chat conversation. Rather than go directly to an online retailer, shoppers are increasingly interested in apps that help them find products and services, regardless of the vendor. They’re also more comfortable having their data — e.g., payment and shipping information — stored within an app (hello, Amazon.com).
A slew of new businesses and platforms are making this a really exciting time for e-commerce. Let’s look at a few of them:
There are over 900 million users on Facebook’s Messenger platform, which recently opened the door for retailer-side commerce solutions. Facebook Messenger added new features such as business user names, automated welcome messages and instant chat links. This lays the groundwork to make connecting with a business via chat just as easy as texting a friend for shopping advice. Facebook is also bypassing the traditional app store interface and instead allowing apps and content to be installed and shared directly within a conversation. This means shoppers can now chat directly with a brand, get product updates and receive details on placed orders — all through a conversation.
According to a 2015 Millward Brown Digital study, 93 percent of “pinners” use Pinterest to plan purchases, and 87 percent have bought something because of the social network. Pinterest has rolled out "Buyable Pins," which let users buy specific items as they view them in the app. When the user chooses to buy, order details and payment information are sent to the merchant for processing. Pinterest must approve your business and the products you’re attaching buyable pins to, but it’s fully compatible with Apple Pay, so checkout is easy. Merchants also keep 100 percent of the revenue.
Similar to Pinterest, Twitter offers "Buy Now" buttons on product tweets. When integrated into your commerce platform, any product tweeted from your online store can automatically include a Buy Now button within the tweet, letting shoppers buy and check out without leaving the social network. Merchants can also reward engaged followers by offering feed-based promotions.
Make it Fast
Ensuring that customers receive the product or service they’ve ordered when they want it —which often means “now” — is critical in the on-demand economy. The availability of instant delivery options is fast becoming the new expectation, especially among millennials, and is already very common in larger cities. Five-day shipping is now considered slow; two days or less is becoming the new expectation.
Merchants should keep an eye on these services:
- Postmates: This on-demand delivery platform has an iPhone app and enables anyone to get virtually any product within in an hour by connecting consumers to local products and businesses with a Postmates courier network of bicyclists and automobile drivers. Postmates is currently available in over 100 cities.
- UberRUSH: This service leverages Uber’s driver network for deliveries. Unlike Postmates, UberRUSH doesn’t handle any purchase transactions. However, it’s great for getting random accessories (e.g., an iPhone charger) delivered pronto. UberRUSH is already integrated with Shopify, Clover, delivery.com, BigCommerce and ChowNow, and is available in Chicago, New York City and San Francisco, with more cities on the way. The only drawback to UberRUSH is that it doesn't have the customer and geographical endpoints stored on its side. This puts Uber at a disadvantage with Amazon’s delivery services, which use ridiculous amounts of customer, geographic and order fulfillment data.
- Operator: This shopping-on-demand platform connects consumers via mobile chat to experts who help them find what they want when they want it. Think of it as switchboard for people who don’t know exactly what they want and need a personal shopper. They may be buying a gift for someone, have special product preferences or need recommendations on certain brands. Send Operator a text message that says, “I just moved into a new apartment. Looking for a nice, modern floor lamp, but don’t want to spend over $100.” An operator jumps on the request within minutes and provides you with options. Customer shipping, payment info and delivery preferences are all saved in the app for seamless checkout in the future. Think of it as “Shopping as a Service.”
Trying to prioritize which apps and platforms to pursue? Look at how each is positioned and what your company could gain from working with them. Don’t let the opportunities of the on-demand economy pass you by. The time to explore this exciting trend is now.
Matt Davis is a product manager at Bronto Software, a cloud-based marketing automation software provider.