Even legacy brands are going the extra mile as consumers want to be approached through all the possible touch-points
Once a king, the consumer is now an emperor and the mightiest of brands are bowing down to their will.
In the era of “on-demand economy”, it is not just instant gratification that reigns supreme. Consumers want to grab what they desire at lightning speed, in a manner most convenient to them, and immediate access to products and services delivered through multiple touch-points is necessary. This is compelling companies to transform their traditional business models and become agile.
Premium global coffee chain Starbucks recently started testing home delivery through UberEats in the US, China and Japan. For a brand such as Starbucks, which prides itself on its uber-chic hangouts and is frequented by customers looking to have a cuppa in a contemporary ambience, home delivery is not just a mere extension of their offerings but also a reaction to the surge of the “on-demand economy”, feel experts.
Sidharth Rao, co-founder and CEO, Dentsu Webchutney, says, “Brands being pushed to provide home delivery is clearly a consequence of the on-demand economy, where instant gratification and convenience is high. The on-demand economy is mainstream now and not a fad.”
In the earlier days, brands with a global footprint and a high recall would invariably appeal to consumers whether or not they went the extra mile. “But not anymore,” says Amuleek Singh Bijral, co-founder and CEO, Chai Point. “Today it doesn’t matter if a brand is a global or a local one. Consumers want brands to approach them through all the possible touch-points.”
“The customer perception of value is becoming more tied-in with convenience, thanks to the growth of e-commerce and technology,” says Nakkyun Chong, founder and CEO of online-to-offline grocery platform Avenue11.
Unlike the digital economy, which primarily revolved around technology-driven channels of customer engagement, purchasing habits in the on-demand economy are shaped by both the conventional and digital modes of buying. A consumer might visit a retail outlet, check the products, but place the order through an app and have it delivered at their doorstep even before reaching home.
The on-demand economy is predicted to swell to $335 billion worldwide by 2025, as per data by PwC. Asia and India are expected to constitute a major chunk of this pie. A Nielsen survey points out that 81% of consumers in Asia will engage in the on-demand economy, ahead of the global average of 66%.
Experts say for brands to thrive in the on-demand economy, adoption of a multi-pronged approach is imperative in order to interact with consumers. On-demand users are mainly millennials, who are one of the biggest spenders. As per a Deloitte India report, millennials spend 54.1% of their disposable income on shopping and entertainment.
Rao says a multi-channel or multi-pronged approach to sales provides an integrated, intuitive and seamless shopping experience, where consumers can easily shop online, via the telephone, or through a physical store.
“Multi-channel calls for integration between distribution, promotion and the communication channels at the back-end. This allows customers to transact anywhere and anytime and gain the same rich shopping experience,” says Rao.
Akshar Peerbhy, chief operating officer, MAA Communications, says, “This approach demands an equal presence of brands in the online and offline spaces and it understands customer behaviour with a centralised data format, thus enhancing brand equity. It provides the consumer with a close-knit experience, no matter which channel he/she opts for to connect and shop. Redundancy even in one channel can tarnish brand equity. As the approach relies on capturing the latest trends and adapting to them with wise analytics and suitable decision making, it helps in aligning business profits with long-term growth.”
Bijral says they have adopted a multi-channel approach wherein they have incorporated a delivery-focused design at their stores to ensure near zero inconvenience to in-store customers. “Besides engaging with customers through our physical stores and through home-delivery, we are trying to reach our target audience through the Internet of Things-based vending solutions. All of this enhances our accessibility and reach.”
Peerbhoy says brands like SPAR, AJIO, Nykaa, Lenskart have successfully tried to integrate into their businesses a multi-pronged approach that caters to on-demand buyers.
Says Peerbhoy, “To expand its brand reach, SPAR has initiatives that enable customers to place online orders and enjoy door-step delivery. Besides, of course, the physical hypermarkets that they run.”
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- $335bn – Global on-demand economy by 2025, as per PwC
- 81% – Consumers in Asia will engage in on-demand economy versus global average of 66%, shows a Nielsen survey
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