The rise of the so-called “sharing economy” led by the Uber car service app will challenge retailers to respond to customers increasingly demanding similar convenience and delivery speed for all things they consume, according to a new report from analyst Deborah Weinswig of Fung Business Intelligence Center (FBIC).
“Inspired by Uber’s business model and the concept of sharing and an on-demand economy, start-ups are increasingly seeking to ‘Uberfy’ the world with convenient mobile services that match demand with supply conveniently via software,” Weiswig wrote. “From laundry and medical marijuana to in-home massage and the outsoyrcing of errands, there is an app that will get it for you with just one click.
“Those who have experienced these services are going to demand faster turnaround times on everything at the convenience levels they have become accustomed to,” she added. “This new consumer mindset challenges retailers to be more responsive.”
The FBIC report cited startups in dozens of categories that, like Uber, utilize mobile apps aligning supply and demand and facilitate payment allowing for convenient execution of services ranging from babysitting (Urban Sitter) to medical needs (Pager, Medicast) to private jets (Blackjet).
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Launched in San Francisco in 2009, Uber is now available in 200 cities worldwide and has a current market valuation of $40 billion, Weinswig noted. Leveraging its drivers has allowed the company to diversify into experimental delivery-on-demand services including UberFRESH, a lunch delivery option now available in certain California markets and Uber Corner Store, which enables delivery of convenience items now testing in the Washington, D.C. area.
Some traditional retailers are already responding to to the on-demand economy with similar services, the report said, citing the British shirt retailer Pink, which has introduced a new app enabling home or office delivery of a shirt within 90 minutes of an order.
The success of Uber and pricing that varies by demand has also highlighted consumer willingness to pay for convenience, Weinswig said.
“An Uber ride is not always chaper than a cab ride, which means that consumers are willing to pay a premium for on-demand services,” she wrote. “Armed with this insight, retailers can identify other areas where customers are willing to pay more for convenience.”
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