“I want it now!”
Why Amazon isn’t the only force to thank for consumer expectations of fast and frictionless
I’ve worked in e-commerce on and off for the last eight years, and one word that always elicits an emotional response is “Amazon.” Love ‘em or hate ‘em, the e-commerce giant has been notorious for setting an ever-higher bar for customer expectations from low prices to drone delivery. In 2009, Amazon set a new pace for e-commerce by announcing the option for same-day delivery, and in late 2014 it began offering one-hour delivery in select geographies.
Amazon was the incumbent to blame for setting seemingly impossible expectations. But it’s not the only factor. There are a confluence of forces that got us from Amazon customer excellence in 2009 to the on-demand economy of today.
Force 1. Recession changes employment norms.
2009 was an important year not only in e-commerce but also in the economy more broadly. Recession sunk in, millions of people lost their jobs, and in turn, lost their faith in the corporate American Dream. The whole model of lifetime employment at one company started to erode. The Economist explains the pre-recession conditions that affected post-Industrial Revolution corporations:
But the model [of lifetime employment at one company] started to get into trouble in the 1970s, thanks first to deteriorating industrial relations and then to globalisation and computerisation. Trade unions have lost power in the private sector, particularly in America and Britain, where legislation has reduced their ability to take action. Companies kept stricter control of their labour costs…Computerisation and improved communications then sped the process up, making it easier for companies to export jobs abroad, to reshape them so that they could be done by less skilled contract workers, or to eliminate them entirely.
In sum, loosening labor restrictions, increased offshoring, and automation slowly chipped away at the bonds between employer and employee. Then the financial crisis hit, we get to 2009, and millions become unemployed. In the early stages of recovery, temporary employment began to take off as an alternative to the traditional full-time working model.
Force 2. The iPhone creates an “always on” culture.
Separately, as we started to emerge out of the brutal depths of the recession, consumer spending began to slowly rise (despite trends toward a new frugality). One product that started to see a bump in late 2010 was the iPhone 4.
The smartphone, and iPhone in particular, created pressure for more, and faster. Consumers got access to global inventory at their fingertips, and could shop, connect, learn, chat, and (insert verb here) with unfathomable ease. Companies could also tap into a global, mobile workforce; with the smartphone came the expectation and challenge of being always on. Increased connectivity created a need to optimize for efficiency on a personal and professional level. How can we get more done in less time, on the job and at home?
Force 3. Increased connectivity and the rise in temporary workers fuels the rise in service marketplaces.
Thus sprouted the “on-demand economy,” or the industry in which companies match up freelance workers with jobs to meet consumer needs “on-demand.” In 2013 alone, 117 companies providing on-demand services received over $1.5Bn in venture capital funding. Uber, Airbnb, Thumbtack, etc. have connected people with capital (skills, spaces, time, devices) with people who want to access that capital at a lower than normal market rate. These services are also working in real time. People are booking and transacting within days or hours of their need. As with physical goods on Amazon, there’s focus on the now.
Force 4. People want to buy from people.
Consumers don’t only want lower prices or faster turnaround time. They want to buy things from real people. Companies like Etsy let you buy direct from artisans, and their tactics and branding are being copied by traditional retail. Similarly, on-demand services are becoming far more personal as users seek out signals of trust from social graphs and past experiences — i.e., how was this Airbnb guest? Did this Lyft drive safely? Some would argue that globalization is also causing so many more people to buy “locally”— their services, their products, their idle machines.
So back to Amazon. Yes, the giant did kick off a revolution in retail, tapping into an unmet need for instant gratification. Amazon gave consumers the apple, but the recession and rise in freelancers, the smartphone, the growth in service marketplaces, the personalization of business, and created the orchard that is now our on-demand economy.