The Last-Second Economy, And Why You Need To Care About It
Have you used Uber in the past 6 months?
Uber is ingenious. It allows you to book a service quickly, facilitating a peer to peer connection between drivers and riders to connect them at the final point of their journey. It’s instant, impulsive and fast. This is why it’s ideally suited to the mobile medium.
Most modern day applications are mobile-led — primarily because they live in the last-second economy. Take Spotify as another example. Spotify allows you to quickly and efficiently pull up any song in the world (except for Taylor Swift) to stream it on-demand, right away.
These mobile applications live in a unique and rising part of the web — one that many brands are well placed to take advantage of. They live in the last-second economy.
Greylock Partners, one of the leading VCs in Silicon Valley, have long spoken about the last-second economy when analysing trends in the mobile sector. James Slavet wrote in Forbes about this trend (he’s a partner at Greylock), saying:
“We are increasingly living in a last second economy. The Web, email and social networks have compressed planning cycles. And now mobile is further accelerating that compression. The mobile form factor drives a habit-inducing simplicity that will grab and take hold of more and more consumer spending. The mobile-first consumer will plan and buy at the last-second, with high confidence, and high expectations of service quality.”
Slavet is right — sort of. Mobile activity tends to be exceptionally task driven. In a recent study Google identified mobile traffic to use search more, spend less time on pages and access the ‘web’ through curated portals (Facebook, Twitter primarily). All this points to a user behaviour of doing things rather than the more sluggish browsing behaviour shown on desktop devices.
The result is compressed planning cycles, as Slavet points out. Two of the more innovative mobile companies in recent times (Spotify & Uber) have leveraged that compressed planning cycle in an ingenious way, building business models that cater more effectively to that cycle. In a sense those compressed cycles offer opportunity to own more user utility closer to the point of purchase if you facilitate the planning phase of that purchase.
Of course, Slavet forgot one key element of mobile in his analysis — comprehension. Studies point to how mobile increasingly erodes comprehension, primarily because of it’s small screen size. As information becomes compressed into fewer pixels it quickly becomes harder for the average person to understand and retain information. The smaller area size compresses the ability for memory to categorise and sort information by object — which leads to less overall retention in memory on mobile devices.
This has interesting implications for companies.
Mobile remains the platform of choice for quick, task-driven activity. But rarely does it form a part of someone’s decision making activity. You’re more likely to influence someone through other channels first and then facilitate their decision through mobile. This provides a unique opportunity for companies. Instead of thinking how do I build a brand/deploy marketing messages across mobile, companies should be identifying ways to extend their utility on mobile.
If you look at the companies that have had success in this field using this mindset they’re numerous. Take Nike for example. Nike is one of the leading brands at marketing on mobile. They haven’t used social advertising or similar to do so, though. They’ve noticed that people have already made a decision to run or something similar and have extended their utility to facilitate that decision — in the form of Nike running. In exchange, their users will redeploy their marketing messages through often non-mobile mediums (like desktop social media).
Of course, most ‘branded’ apps aren’t utility driven — they’re campaign driven. And as a result they rarely capitalise on their users behaviour. Think games with no long-term value, mobile banner ads or one off app competitions. Whilst the data coming from these apps might be promising (lots of interactions in the short term) they often don’t convert into tangible brand shifts. They miss the opportunity to shift a brand experience from a reaction, to a habit.
This comes to the second implication for companies embracing and tackling the last-second economy. As mobile commerce explodes (it’s now simpler to purchase something via your mobile than your desktop — as long as you know what it is) companies will have to recognise and reconcile two distinct streams of commerce.
The first stream is traditional commerce. Customers research and plan their decisions and purchases are handled through traditional retail decisions. Mobile will rarely become the platform of choice for this type of commerce. It isn’t an effective platform. Screen sizes are too small and limited to facilitate traditional browsing behaviours found online (note: augmented experiences, reality and iBeacon technology are a completely different story).
A more important stream will be the second one: the habit-based stream of commerce. Our decisions and habitual purchasing will increasingly converge on the mobile device. When you ride a taxi, you’ll turn to your mobile to facilitate that purchase. Ordering fast food on the way home from your commute? Mobile is most likely to play a role in that purchase. The running theme is that mobile inserts itself as a habitual utility, rather than shifting a customer behaviour.
Ultimately companies who embrace the last-second economy are capturing a powerful moment of decision making. Instead of viewing that moment as a marketing opportunity it should be viewed as a utility opportunity. In doing so, you can either extend your company into an everyday use (and therefore own an active consideration set) or you can increasingly own the habit-based stream of mCommerce.
Not every company will own mCommerce. Those that do need to work out how to productise habits, rather than sell products.
