The New CX Frontier For On-Demand Brands

Mark Di SommaAugust 7, 20155 min

The sharing economy is substantial. Uber’s valuation just hit $50 billion. Airbnb is valued at around $20 billion. And Entrepreneur Magazine believes the sharing economy’s size in five key sectors will reach 335 billion by 2025. Explained here,The catalyst behind the sharing phenomenon are technology platforms—big data and mobile—allowing consumers to share anything, anywhere, and anytime at an affordable price. Sharing is ubiquitous today.”

Fascinating then to read Ana Andjelic’s piece on how the sharing economy is also influencing how luxury consumers think about what they bother to buy and what they choose instead to borrow. The attraction? As Andjelic points out, “The experience is going to be different each time, and that kind of uniqueness and individuality is exactly what the next generation of affluents is looking for.”

So the push is on to access shifting and new experiences owned by others. This is “the luxury of sharing…Its emerging business models and revenue streams will revolve around offering products-on-demand as a service (vs. just selling them), partnerships and tie-ups, motivating a marketplace and new service value-adds.”

At first glance, this simply looks like the collaborative economy model taken upscale – until you consider that element of experience. That’s not something the sharing economy’s champion brands have taken much notice of historically as they have sought to change the channel and introduce new bases for pricing.

Until now the focus has been on efficiency and the use of digital platforms to transform asset use. According to Marc de Jong and Menno van Dijk, “digital technology, by increasing transparency and reducing search and transaction costs, is enabling new and better value-creating models of collaborative consumption. As a result, ownership may become an inferior way to access key assets, increasingly replaced by flexible win-win commercial arrangements with partners…”

The need to blend experience into the collaborative equation is a fundamental challenge. As Blake Morgan points out, “Creating a compelling customer experience takes a concerted effort. It demands leadership, time, resources and process.…When you get in someone’s car, hire them to do your grocery shopping or stay in their house you are invited into their world–their experience…What is exciting about the sharing economy is its ability to create jobs…It has brought unprecedented convenience…It creates reductions in waste. But there is much work to be done.

Right now, experiences in the collaborative economy can differ wildly. Some would even say that’s part of the charm of choosing a disruptive player. And while there are some things that obviously can’t be shared (consumables) and some that probably won’t be (everyday technology), beyond that the opportunity to crowd-source or open-source much of what is currently bought permanently seems a tantalizing prospect. The challenge will be to wrap an experience around it that is inspiring and exciting not just affordable.

As the collaborative players continue to achieve substantial valuation and scale, I think they have a lot more work to do to get their CX (customer experience) into competitive working order.

What are you selling when people don’t want to buy? What’s the experience of that? And what could it be?

The conventional asset rental market offers little inspiration. Currently, experiences there are pretty dry. One car rental company experience today feels very much like another. If you rent a photocopier for your office or you choose to rent space to keep your things in, the experience of doing so is again indistinguishable. If you rent power tools from one place, it’s exactly the same as getting them from another. And that’s because most companies that rent today are still focused on the availability and delivery of what is being rented rather than seeking to make the experience of renting better and more compelling than choosing to buy. Where there are options for a better experience these tend to revolve around changing the model you rent rather than adding to or upgrading the experience you can have.

There’s a three-way situation here that begs resolution it seems to me. Firstly, digital is redefining how people think about assets. So there’s a new value proposition emerging rapidly. Secondly, incumbent brands can learn from the agility of the new, on-demand brands and their ability to zero in on new ways of meeting customer needs. That marks a change in pace and flexibility. Thirdly, on-demand brands need to gain the consistency and discipline that their larger counterparts have acquired. That’s about reliability and mainstream trust.

If I was an incumbent mainstream brand right now, faced with competition from the collaborative economy, I’d be pressing home how good ownership really feels and why it matters. At the same time, I’d be looking for ways to diversify my offerings to enable a range of ownership stakes ranging from passing to permanent. Finally, I’d be looking to work with allies in the collaborative economy to re-set and disrupt the experiences the brand could deliver.

Some brands are starting to work together to deliver on-demand experiences that neither party could achieve on their own. So a brand like Virgin for example is collaborating with an on-demand brand like Taxi-to to deliver experiences that add value for the customer and are, in themselves, more connected and connective for both brands’ customers. That notion of experience aggregation has been missing from both the mainstream and the collaborative markets. But initiatives like these, while important, don’t actually answer the question above. They add more functionality. They still don’t deliver the joy of a great experience. They don’t add to the attractiveness of on-demand in an emotional sense.

I do love the change of question that all this generates though: from “what experience should our brand always deliver?” to “what experience will our customer want [this time], and who can we work with to make that happen?”

The Blake Project Can Help: The Customer Experience Workshop

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education

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