Groceries delivered in an hour? Yes, please. Taxi at your doorstep in just minutes? Absolutely.
We all love the on-demand economy for obvious reasons, and as it turns out, so does Mary Meeker. In her 2015 Internet Trends report for Kleiner Perkins Caufield Byers, we find out how the on-demand economy is changing the way companies interact with consumers. By using data intelligently and disrupting the marketplace, they make everyday services more efficient. As consumers’ expectations continue to rise and these companies become even savvier, the only way the on-demand economy can grow is up.
Life is about to get a whole lot easier.
1. Disrupting high-spend / high-engagement markets
What does Uber, Airbnb, and Instacart all have in common? They’ve invested in markets with the highest levels of engagement and spend. Think about it: Consumers need shelter, they drive more than 37 miles each day, and visit the grocery store twice weekly for 41 minutes each trip. On average, Americans spend a third of their income on housing ($17,000), 18% ($9,000) on transportation, and 14% ($7,000) on food. Prior to the on-demand economy, these markets were considered “weak user experience markets”. Uber, Airbnb, and Instacart set out to fix that problem. It’s amazing what a little innovation can do.
Source: Mary Meeker’s Internet Trends 2015, http://www.kpcb.com/internet-trends
2. Getting what you want…when you want it
Let’s reflect back on life before the on-demand economy. If you wanted to catch a ride, you would either call a taxi dispatch company or attempt to hail a cab from the curb if you have the luxury of living in a metropolitan city. But if it’s raining, 5PM on a weekday, or New Year’s Eve, forget about it. If you resort to calling a cab company instead, you might expect an hour-long wait and a call to inform you there aren’t any taxis available in your area.
Now, thanks to mobile and localization, you can request a ride with just the touch of a button. While consumers are always on-the-go, they’re also always connected to their device. Services like Uber and Lyft have utilized localization in such an effective way, not only improving the user experience, but allowing their users the mobility they need.
Source: Mary Meeker’s Internet Trends 2015, http://www.kpcb.com/internet-trends
3. User-generated content creates trust
As users engage with on-demand apps like Uber, Airbnb, and Lyft, they have the opportunity to report on their experience to help other consumers make informed purchasing decisions. For example, if you were to stay at someone’s home through Airbnb and had an incredible time, you could share your experience with the rest of the Airbnb community. And vice-versa, if your hosts came back to a house cleaner than when they left it, they could rave about you, too. In fact, user-generated reviews have become so valuable amongst customers, that Airbnb has reported reviews growing 140% year-over-year. This content drastically improves the user experience, but more importantly, it continues to build trust, leading to a stronger and dedicated community of users.
Source: Mary Meeker’s Internet Trends 2015, http://www.kpcb.com/internet-trends
