On Demand Economy

From groceries to phone repairs — the future is on demand

Over the past 20 years we’ve seen a move from physical retails stores to ecommerce, resulting in many companies going out of business. General consensus is that this move wouldn’t affect the service industry (for example hairdressers, repair shops ect.). I’ll argue that these kinds of services also are ripe for digital disruption.

With services such as Spotify and Netflix people has grown accustomed to getting the content they want when, and where they want it. But tedious tasks such as getting groceries, doing the laundry or getting your iPhones screen repaired still requires you to adhear to the companies schedule. That was until recently.

A new wave of startups is bringing an era of on demand services to new industries.

A few taps on your phone and Washio collects your dirty clothes at your door, washes it and returns it the next day.

What if you don’t have room for all your stuff in your apartment? Clutter picks it up and puts it in storage, where you can get it back with a days’ notice. If you don’t feel like keeping those things and don’t have time to sell it online or donate it? Minimal gives you an instant quote and takes care of everything — from selling your stuff, to donating the unsellable items to charity.

Or if you break your iPhone small startups Gotham iPhone comes to you, office or home, and repairs it onsite in a few minutes.

Space and time

I see 2 factors playing a big role in the pushing toward on demand services.

Time / Convenience. Even though the average workweek has gone down greatly — in the US from 60 hours per week in the late 19th century to approx. 33 hours today (wikipedia)— the stress levels in the US has risen with 30% the last 30 years especially for young people (nydailynews). Therefor a lot of people are trying to simplify their daily life — this is where on demand services is a huge time-saving and convenience factor.

Space. Today most of the worlds population now living in cities (WHO) and the urban population density is generally rising. This means that you can psysically reach more people within an urban area than ever before.

“That sounds expensive”

Conventional thinking would say that having stuff deliveried at your door will come with a premium price-tag. While this is still true for some services there are huge savings involved with having an on demand business model — savings that when passed on to the customer allows offering a comparable (or lower) price.

Better inventory management. Every day supermarkets throw out expired food, but that’s not necessarily the case in the future. With customers ordering their products “in advance” from on-demand companies, stock control is a lot easier — leading to less waste. Furthermore, while in-store tracking is still in infancy (even though it’s a buzzword these days), the ordering-side of on demand businesses is internet-based — with all the analytics and metrics that entails.

No or low rent. A business, such as Gotham iPhone, that does the job on-site doesn’t have to spent any money on rent, electricity ect. Businesses that needs a space for strorage/processing/work ect. can take advantage of lower rental prices outside the city center and be based there — while still servicing customers in the center.

The next steps: Gigabit internet and personal manufactoring

While having products delivered and collected from your doorstep is really convenient I only see it as the beginning.

Gigabit internet. Right now Google (and other companies) is starting to roll out gigabit internet to households in select states in the US. One of the speculated “killer-apps” for this new super fast internet is video conferencing like we’ve never seen before. Among several other things this will allow you to get in touch with your doctor, or a specialist, from anywhere — anytime.

3d printers. We haven’t yet seen the real impact of 3d printers being available at affordable prices. I will bet that you within the next 10 years will be able to print many of the products you buy today. Downloading (buying?) a 3d model and printing a product in the conforts of your home will really be the true testimate to the on demand economy.

For more reading see my 2 other pieces on the On Demand Economy:
- From API to HPI: Introducing the ‘Human Program Interface’
- How the On Demand Economy can Save Small Businesses

I would love to hear your thoughts. Comment here or get in touch at: @madsviktor or mads@diin.dk.