As a digital marketer, you have to stay on your toes. It sometimes feels like new market disruptions have become an annual rite of passage. What were once generational, seismic changes are now just the normal order of business.
The latest development in a long line of digital commerce revolutions is the emergence of on-demand delivery. Like any disruptive change, on-demand apps have created a lot of anxiety for brands and their local stores. Is this technology a threat to localized businesses, or an opportunity to improve brand engagement and drive customer loyalty?
You have Amazon to thank for the current fervor whipping up around on-demand delivery. While Uber Eats, Instacart and Soothe, among others, laid the foundation for this change, Amazon will likely be the company to catapult on-demand local services into the wider consumer consciousness. The e-commerce giant’s recently announced plan to acquire supermarket chain Whole Foods signals a radical change in the way consumers buy and receive groceries.
Although grocery delivery services are nothing new, having one of the biggest and most innovative names in e-commerce throw their hat into the ring should put the industry on notice that some major developments are underway. After all, this is the same company that’s been experimenting with drone delivery for years.
If Amazon does indeed grab the torch from the Instacarts of the world, consumers are likely to follow right along. At that point, on-demand apps will cease being fringe consumer channels and become the new status quo.
If this does come to pass, local businesses will be rightfully concerned about what that all means for them. The problem’s not restricted to supermarkets, either. On-demand services could dramatically change things for any brand that operates localized store fronts. They’ve already had to weather the rise of e-commerce, but if on-demand delivery becomes the new normal, they may see foot traffic dry up entirely — that’s the fear, anyway.
But before we all throw up our hands and claim the sky is falling, perhaps we should be viewing the situation in a different light. Local stores may be able to capitalize on the emergence of on-demand services and use them to drive customer engagement.
Businesses need to stay agile to compete in the omni-channel marketplace. We’ve seen this with the rise of e-commerce: Brands that embraced digital channels and facilitated the customer journey through them not only survived but thrived in this new environment. That’s because they were able to provide customers more options to deliver products and services, allowing the consumer to dictate the terms of brand engagement. As we’ve seen through eMarketer’s research, customer priorities are shifting away from differentiators like low prices in favor of service quality.
The on-demand economy takes this sentiment a step further by allowing customers to receive products they purchase over a digital channel to arrive in their hands within mere minutes. Cutting a trip to a physical store out of the equation may make brands nervous, but for the customer, this is an incredible development. Businesses that take the lead and openly embrace on-demand delivery will associate themselves with convenience and speed — and that’s great for your brand. If you want loyal customers, show them you’re not afraid to meet them on their terms and provide them the level of service they demand.
On-demand delivery also removes many otherwise unavoidable obstacles to in-store sales. When it’s pouring rain and you have nothing to make for dinner, do you take a trip to the grocery store or pull into the McDonald’s drive-thru? No, you order a pizza and let someone else brave the elements. Inclement weather, traffic and family obligations frequently prevent customers from visiting stores. On-demand delivery allows stores and brands to net those otherwise lost sales by bringing products straight to the customer.
Your local stores can only reach so many customers. People residing just outside their immediate vicinity may be unwilling to make a longer trip to those stores when there are similar alternatives nearby. On-demand delivery allows stores to broaden their footprint by providing services to consumers outside of their traditional territory. If your brand is offering on-demand services while competitors are still dragging their feet, who’s the consumer going to choose? Even if your brand’s store is farther away, customers are more likely to opt for fast, convenient delivery than to make a trip to a competitor’s brick-and-mortar shop.
With on-demand services, local stores can stretch their distribution capabilities to tap into surrounding markets, drastically expanding their potential customer base.
Even with the benefits outlined above, there may be obstacles in sharing revenue between local stores and full-time delivery people or even independent contractors. Don’t think of it as cannibalizing your sales, though. On-demand delivery is an additive channel, supplementing traditional brick-and-mortar stores with another arm to provide products to consumers. Although brands may need to funnel some of those sales to a third-party delivery service, it’s still an added revenue stream that will prop up both local stores and the overall brand.
At the end of the day, if you stand on the sidelines and take a wait-and-see approach to on-demand services, you’re essentially leaving money on the table. Now that the big boys like Amazon have gotten involved, it’s only a matter of time before it becomes part of daily business operations.
I suggest getting ahead of this change, embracing it, and making it work for you. You can’t fight the future, and as we’ve seen, you either roll with the changes or you get left behind in the dust.
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