Is In-home Commerce the Future of E-commerce?
What is in-home commerce?
In-home commerce is a term coined by Marcela Sapone- the CEO of Hello Alfred, a home management platform based in the United States. In-home commerce allows people to buy and sell products in their homes. Unlike in e-commerce, with this business model the sellers have the unique opportunity to let customers interact directly with the product. With an average attention span of 1.8–2.7 seconds for sales conversions on e-commerce sites, in-home commerce eliminates the noise and need for tricks to capture customers’ attention quickly.
What is Hello Alfred?
Hello Alfred is an on-demand concierge service targeting millennial urban professionals. These services are regular chores that urban professionals find difficult to take time out for like grocery shopping, dry cleaning, home cleaning and sometimes can also extend to organising a party or hosting their parents. It is a B-2-B company that works with property developers to provide this concierge service as a utility tied in with the rent that the tenants pay. Other than the fixed fee, the company also gets revenue from advertising. Since the company has access to people’s homes, brands want to use Hello Alfred to advertise their products by placing it directly in the homes of the consumers. An example of this could be a newly launched yogurt company that wants to increase brand awareness. Through placing the yogurt directly in the fridges of customers as free samples, the customers are able to interact with the product. Not only does this help with brand awareness but also with taste development and getting customers hooked to their products.
What the company does well?
Hello Alfred has managed to successfully figure out the last mile delivery aspect that large retail giants have been trying to crack. What Hello Alfred did well from the beginning is being ultra successful in gaining the trust of their customers. As described by the CEO, we are living at a time when the concept of shared economy is gaining popularity. It is becoming more and more acceptable for people to have strangers living in their homes (Airbnb) or driving in their cars (Uber). This gives Hello Alfred a unique position to build enough credibility for customers to trust them with the keys to their homes.
Another aspect that Hello Alfred successfully focuses on is predicting the demands of their customers. While retail giants like Amazon have been focusing on predicting their customers’ demands for years, the basis for their predictions rely heavily on the customers’ activities only on their platform. This limits their scope. The combination of human touch and technology has been key in letting Hello Alfred predict the needs of the customers. The company ensures that the home managers remain fixed for customers. This allows the company to be able to learn more and more about their customers as time goes on. These learnings include regular behaviour like the time it takes for customers to go through their milk, their daily schedule or even if they have started dating someone new. The home managers are then able to pre-empt the customers’ demands based on these constant learnings and further optimise them based on data analytics. This data also allows them to target their ads more effectively. Continuing with the yogurt example- because Hello Alfred has information like the customers’ favourite flavours or if they are lactose intolerant, the company is able to optimise the advertising of products based on this data and place relevant products in their homes.
Finally, the cost aspect helps the company to further increase stickiness of the platform. Apart from acting as a point of convenience by acting as a one-stop shop for different services, the company also provides cost effective services. With an increase in the number of users, the company is able to aggregate the total demand and practice economies of scale, which it further passes onto the customers. This incentivises the customers to use Hello Alfred’s services.
What is the opportunity in Asia?
Hong Kong and Singapore would both be viable markets for Hello Alfred to expand into. Both countries have an almost 80% smartphone penetration and a large section of the population that is becoming tech reliant. Both countries have the 3rd and 4th highest population density in the world, respectively and come under the Top 40 cities for the worst work-life balance. This would allow the company to scale quickly in the two countries. However, the company would be directly competing with the availability of full-time domestic helpers that offer services at more economic prices compared to the US. The opportunity for the company would be to position itself as a “smart-helper” and target time-poor millennials who have the resources to hire domestic helpers but do not have the time to train them.
Indonesia would be another country that the company should consider expanding into. Being a leapfrog economy, the country has a smartphone penetration of 40% which is growing at an unprecedented rate. More and more people are also shifting to purchasing goods online. With a growth in almost US$1 billion, Indonesians spent US$9.5 billion on purchasing consumer goods online in 2018. Interestingly, grocery shopping accounted for a high percentage of this with a 30% Y-O-Y increase. The country also has a 55% urbanisation rate leading to an increase in disposable income and emergence of a strong middle class. Apart from millennials, Hello Alfred would have the opportunity to position itself as a premium service to also target an older section of this middle class, instead of directly competing with the domestic helpers.
In Asia as a whole, there is an emergence of a burgeoning middle class and a young working population. In cities like Ho Chi Minh, Bangkok and Bangalore, this demographic can be characterised as “aspirational achievers”. These people are optimistic about their economic conditions, are working hard and have tech strongly ingrained in their cultures. With this section of people becoming increasingly busy, Hello Alfred would have the opportunity to take advantage of these macro shifts and carve out a niche for itself.
