On-Demand – looking forward and back on Now
ED note: We’re pleased as punch to welcome James Paton-Philip and Victoria Rounding of Thomas Eggar as guest writers on the 4.5 Blog. James and Victoria are part of Thomas Eggar’s Fast Growth team, which advises early stage businesses on all legal aspects of their life cycle. We asked them to give us their take on which technology and business trends are set for massive growth and development in 2016, and what role start-ups might play.
The On-Demand Economy boomed in 2015. From Amazon Prime Now to Argos Fast Track, businesses old and new were getting in on the act, and the growth of ultra-convenience is unlikely to slow down in 2016. So, what can we expect in the coming months?
The big players will get bigger in 2016 through further expansion and diversification. Amazon’s Prime Now service is expected to come to more cities and big names like Uber are already diversifying into wider markets, such as courier services and food delivery in the US.
That doesn’t mean there isn’t room for the smaller players though. It’s now much easier for start-ups to reach customers through a variety of platforms with minimal cost and the consumer demand for more niche, high quality products and services is likely to fuel the expansion of smaller, on-demand businesses like Pronto.
- Slicker check-outs
Until recently, handing over your money has been time-consuming and tedious with the inputting of card details and security numbers holding up the instant gratification of an on-demand purchase.
Step-in touch commerce. According to Deloitte, authorisation of payments by fingerprint or a few touches of the screen will be used by 50 million consumers by the end of the year – that’s an increase of 150% from 2015. Credit card photo recognition is only one of the recent innovations.
- Delivery diversification
Same day, next day, next week or next Saturday at 10am – delivery in 2016 is all about the consumer choosing exactly when, where and how their delivery is being made as well as having the option to track its progress. That way, the consumer doesn’t have to waste precious time waiting at home for a courier or miss the Saturday night takeaway delivery!
According to the Freight Transport Association, there is currently a shortage of 45,000 HGV drivers. So, as more and more consumers purchase goods online, companies need to look for new ways to deliver their products. Peer-to-peer and other alternative delivery services should become increasingly popular in 2016. Amazon has already started by exploring crowdsourcing deliveries through its “On My Way” app and 2016 will see the launch of Loum, which uses secure, instant, track-your-driver technology to deliver your goods straight to your door, direct from the retailer.
- Easier returns
The new Consumer Rights Act came into force on 1 October 2015, heralding significant changes to the returns process and strengthening consumer’s rights. Retailers are now obliged to give full refunds on faulty items returned within 30 days – previously retailers would just offer to repair faulty items instead. The new rules also tackle late deliveries – retailers now need to deliver items within 30 days or on the date that has been agreed. If they don’t the consumer can again get a full refund. Further, companies are no longer allowed to hide charges and other significant terms in their small print. All contracts must clearly state the main elements of the deal and prominently state the full price.
This increased focus on fairness and the rights of the consumer means that companies will need to up their game in 2016 and make sure their returns and refunds policies are up to scratch. Big names like Boden, Schuh, Decathlon and Zappos already offer 365 day returns and e-tailer N Brown now allows its customers to return unwanted purchases 24 hours a day, 7 days a week via an automated locker service at various UK locations. As with delivery, the key to returns is diversification and convenience – retailers need to make sure they offer consumers a variety of returns options that can be easily slotted into day-to-day routines.
- Click and Collect expansion
According to Live & Breathe’s The State of Retail 2016 report, almost one in five respondents believed that they had changed the way they shopped in 2015 because of Click and Collect services. This trend is set to continue in 2016 with more Click and Collect locations being added to the map as retailers are keen to offer the service in their physical stores to increase footfall. Pioneering this approach is Asda, which announced its ToYou service at the end of 2015. ToYou will offer real time and individual parcel tracking for customers and will allow third party brands to use the service. Parcels will be available for collection at a kiosk or self-service point in all 614 Asda stores.
Again, retailers using Click and Collect need to make convenience a priority, as highlighted by the recent Click and Don’t Collect campaign by River Island and Shuttl which saw River Island tackling an increase in lost sales (due to customers being unable to collect their purchases) by offering customers the option to use Shuttl deliveries if they can’t make it into town.
2016 and Beyond
So far we’ve seen the “uberification” of the retail, food and logistics world – but what’s next for Now? As current on-demand services become more entrenched in day-to-day life, it’s likely that consumers will expect this kind of service from everyone. Whether that will happen not only depends on demand, but also on the ability to disrupt an already disrupted market. But there is always room for more disruption: it’s something we have all come to expect.