The hype around the On-demand Delivery Economy or fast delivery economy is slowly dying down; as it switches from an epic and unique feature to a necessity to compete with other companies. What was once an exclusive term for applications like UBER Now and Amazon Prime, has now spread across different industries. Soothe delivers a masseuse at your door, ParkWhiz lets you book parking in advance, and Washo will help with your laundry. These applications and services are built on instant gratification, which is their most significant and only selling point. But the real question is, why is competition rising in the On-Demand delivery economy? Well, let’s find out.
The Importance of On-Demand Delivery
On-Demand delivery or quick delivery has very much taken the current generation by storm, and for a good reason. The simple thought of having everything you want at your fingertips is relaxing. Whatever you order from the internet makes its way to your house without you even taking a step out of the house. Whether it be food, groceries, or laundry of all things; same-day shipping ensures that you get what you want within the span of hours.
Now, this technology of delivering goods and services within an hour is a product of the times, leading to a burgeoning on-demand delivery economy. Surely, with the world moving at a breakneck pace; it is only understandable that people make more use of a service that is almost instant. However, what was once a niche or quirk with a select few, has become a necessity for people shopping online. Why wait a month or a week, when you can have what you want in an hour.
The impact of this ideology leaves people looking for on-demand delivery or same-day delivery from every company. And contrary to public belief, the people involved in this quick delivery service are not just millennials but people of all ages.
The Growth of the On-Demand Delivery Economy
Many factors have contributed to the growth of the on-demand delivery economy, but none are as influential as the customers themselves. And while many still think that the only people indulging in the on-demand delivery economy are lazy millennials, well think again.
A recent study shows that adults spend a lot more time on their phones than they think. And another study showed that 30% of the people that use this service are between the age of 35 and 54, while 21% of people are above the age of 55. Therefore, it is safe to say that users of the On-demand service are people on a broad age spectrum. Above all, history repeats itself, as tech spreads to more people. The uses of tech become all the more widespread.
The on-demand delivery market is continually expanding and growing at a rapid pace. Even though it is a $55 billion industry, there is still room for it to grow and expand. From making use of AI or drones, this is a sector that is very much growing with its customers. But why is this form of delivery so important? Well, it is because of just how common it has become across almost every industry.
The Impact of an On-Demand Delivery Economy
The On-Demand delivery service is something that almost every online shop or courier company has. Likewise, the courier industry economy is especially flourishing thanks to this service and now has become a sheer necessity. But why is it like this? Why do e-commerce sites now NEED to provide the on-demand delivery service to their customers? And the simple answer is because everyone else is.
Amazon is easily the most significant online distributor of goods and is also a trendsetter in the tech world. In other words, if Amazon is doing it, so will you keep up with them. And smaller e-commerce market places have to stay neck in neck with Amazon since they have been known to buy out smaller businesses and their key selling point. So with that, you now have different types of marketplaces trying to compete with the sheer size and magnitude of much bigger companies.
Similarly, smaller companies often get into contracts with courier companies that already offer instant delivery. However, they don’t have the necessary expenditure for setting up their instant delivery service; and instead, depend on courier companies to deliver their parcels. As a result, the smaller companies are already in till their necks in expenses. So, why don’t customers stop using the service?
The Impact on Customers
This is a question that many people often ask, but unfortunately, it is not that simple. Recently, Amazon reported that it has over a million customers registered as PRIME users. Surprisingly, all of those users have become accustomed to the instant delivery solution that Amazon provides. In many ways, it has become an expectation that they hold for every company that forms the on-demand delivery economy. Besides, if something from a smaller store will deliver in a few days; but is it also available at Amazon with instant delivery, which would you choose?
Other than the apparent impact that Amazon has made with its sheer size; social media has also played an essential role in the normalization of the instant delivery. For example, social medial, and in extension, the internet, lives on the principles of instant gratification. Interestingly, any question that you may have is just a Google search away, and a friend is only a text or calls away. When everything is so accessible, it is easy to see why people are expecting a store to have same-day delivery.
On-Demand Delivery and the Changes to Consumer Behavior
Consumer behaviour is changing and evolving rapidly, first of all. However, with the inclusion of instant delivery, consumer behaviour has changed drastically. In the same way, on-demand delivery has gone on to become an expectation that consumers have when buying goods online. But other than that, fast delivery has become a form of customer service.
Customers think that companies care for their needs and with that consideration send their goods as fast as they can. Making your customers feel like the centre of the universe is an effective tactic that most e-commerce stores use. While it may be heavy on the company itself, it is in many ways what keeps the customers coming back for more. It is sometimes the only selling point of a company, but that is enough to garner millions in revenue every year.
Instacart is just an app that delivers groceries to your house, and Postmates is an app that will deliver anything as long as it can fit in their car. Some of the best on-demand delivery services provide you with parcels or items within a matter of hours.
However, as the service becomes more and more prevalent throughout the industry, companies might have trouble keeping up with the competition, and customers will have higher expectations. With factors like traffic and vehicle breakdowns, a common reason for getting late, customers may become frustrated. And many companies already found a way to keep up with the increase in demand.
The Parcel Delivery Industry Makes Use of Tech
In a growing industry, part of the on-demand delivery economy, there is a lot more space for the industry to grow and evolve. One of the ways that it is evolving, of course, is by robotics and drones. It may come as no surprise that industry as dynamic as the delivery industry is developing new tech or is implementing tech in different ways. Amazon is at the vanguard of this change; it may not come as a surprise that it is setting trends.
One of the first and most apparent techs that delivery companies are using is that of drones. What was once a filming tool for many filmmakers to make use of is now going to deliver birthday candles to people across cities. The delivery industry using drones for its deliveries has been in the news lately with companies like UPS launching their drones. However, Amazon beat them to it. Despite not being a delivery company per se, Amazon is possibly the most advanced delivery service provider in the world.
Amazon has also already made its first drone test delivery, which was a complete success. In other words, Amazon just got a significant leap ahead of the competition in the on-demand delivery with the help of these drones. These drones are already capable of making deliveries across cities and can deliver parcels in less than 30 minutes. That is quite an impressive feat. And with this, Amazon solidifies its place at the top of the delivery food chain.
Amazon has not only invested in drones to keep its customers, but it also made the quality of life changes to help its customers. One of the ways that it has done this is through the fantastic amazon specific lock for all prime users. The lock keeps unwanted visitors out but has a unique feature to save you from losing your package from your porch.
Porch robbing is a grave concern for everyone in the United States, whether they are living in the suburbs or apartments. These thieves especially hit during the holiday season as that is often the time when people take advantage of sales. To protect you from the pain of losing a package, Amazon has introduced this special lock to its customers. The lock connects to the main database and only opens when someone types the specific parcel code. Once the code is in, an Amazon representative takes the parcel in and drops it off inside your house. And when they leave, they close the door, keeping your home safe from poachers.
These locks can help every kind of customer; but this is only a service that Amazon provides, further solidifying its place in the market.
Reason for the Competition Increasing
Where it was once Amazon and its prime users enjoying a unique selling point, same-day delivery has become more widespread. More countries and companies are seeing the inclusion of an instant delivery service in their overall service. The economic growth in UAE, for example, has given way for Careem to offer a local version of Postmates. The economy in UAE is also a bustling one that allows many companies to develop and evolve there truly. But the economy is not so much a reason for the increase in competition as much as the companies now understanding its importance.
As we discussed before, the world now moves at a breakneck pace, and customers have been conditioned towards spontaneous things. Firstly, you had instant search results, instant likes, instant comments, instant calls, and now you have instant delivery. Secondly, it is very much a gradual progression that shows the changes in consumer behaviour. Interestingly, customers were first completely happy with waiting a month or a week for a parcel. However, they can barely wait more than an hour now. And this wait time for customers will only shorten as tech evolves beyond a certain point.
Instant Delivery Gives Room to On-Demand Warehousing
Many companies, with the help of instant delivery, are moving onto much smarter and more efficient forms of warehousing. Where smaller companies have to spend extra money to pay for the instant delivery system; they can save that money by investing in on-demand warehousing. At the same time, on-demand warehousing allows smaller companies to make good use of the space that they have and not get into contracts that they may not want.
Major logistics companies and other types of warehousing alternatives can be risky and pricey for smaller companies. Perhaps, that is why sharing their space with another company is such an effective and fantastic alternative. Besides, even if they run out of space, they can go to another warehouse or negotiate the contract with their current warehouse.
These warehouses also provide a slew of different features and various other perks that makes it great for smaller businesses. Indeed, some companies can handle logistics, while others can go the extra mile and provide the workforce that a small company may need.
In the end, instant delivery is very much a product of the times and a catalyst for the rising economy. It has probably solidified the instant gratification to which the people of this generation have become accustomed.
Additionally, anything that your order is delivered within an hour or two is a fantastic deal that surely no one can put down. However, the rise in completion of recent years has seen that it is not only the big companies involved in instant delivery but the smaller ones are as well. Eventually, with a little help from courier companies, smaller companies can make the most of their e-commerce experience with instant delivery, leading to a robust on-demand delivery economy.