Are you ready for the “access on demand” economy?
From Dollar Shave Club to Birchbox and StitchFix, there has been a new wave of hit subscription services, with the latter reaching a valuation of nearly $3 billion just seven years after launching.
As consumers enjoy what the “access on demand” economy has to offer, more businesses are jumping on the bandwagon to capitalise on this growing trend. The sector is on a clear upward trajectory, and it’s not just new, entrepreneurial businesses getting in on the act; established brands are rethinking their own business models.
The coming years will see an explosion of automated services that deliver what customers want, when they want it, and where they want it. The future will be defined by mass personalisation at scale and, while this will benefit customers enormously, it raises some important questions for brands. Namely, how can you engage customers or prospects if you no longer own the point of sale?
Sectors embracing an on-demand mindset
The grocery sector has already seen a shift away from a few large outlets to a higher number of local shops carrying products tailored to their neighbourhood, and more recently to online ordering and delivery. Now, think about a company that sells home cleaning products and relies on major grocers as their main distribution channel. Smaller stores mean less shelf space for advertising and less margin for commodities on display. And home delivery removes this marketing arm altogether, which means their current model will soon become obsolete.
That’s not to say we’ll all just sit around at home or work from now on, waiting to receive hundreds of customised care packages in the mail. However, companies are looking for more ways to inspire loyalty and become more experience-driven. This will be the key to succeeding in an on-demand economy. In the words of Adobe CEO Shantanu Narayen, “It involves operating your business with a subscription mind-set, knowing that customers can choose to renew or cancel at any point with every click”.
Retail is not the only industry under pressure to adapt. For instance, in the travel sector Virgin Holidays has consolidated data from across its organisation to personalise the user experience for customers. The ability to automate and curate at scale has helped Virgin Holidays boost audience engagement by 50%. And in the telecoms industry, America’s T-Mobile has taken a customer-first approach, digitally transforming to give subscribers more options to shape their contracts and the services they pay for.
Transforming ways of working
Virgin Holidays, T-Mobile, and many others might have very different business models, but a common thread links them: an unwavering commitment to building experiences tailored to each customer.
This ambition is why they are using automation for more than just efficiency gains. They are thinking of how it can help make their brand more creative and relevant. Of course, automation remains an important enabler for short-term wins including efficiency and cost cutting, but these have quickly become simple hygiene factors. The real magic happens when brands challenge themselves to explore how automation can improve their ways of working in a substantial way.
The answer will not necessarily be to deliver their products or services on a subscription basis, but a “subscription mind-set” will be the mantra of all successful businesses in an on-demand market. Further, when brands automate targeting and channel optimisation they are able to dedicate more time to creativity and strategic imperatives.
We live in a world where people can access what they want, when they want it, and disruptive companies are already beginning to pull ahead by anticipating our needs even before we ask for anything. As the balance of power continues to shift to customers, companies must act quickly or risk becoming obsolete in an automated, on-demand world.
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