Driving Untapped Demand
Why are consumers buying into Industry 4.0 brands? What’s the forecast for established brands?
As “who’s going to order the Uber?” becomes as common as “where should we go for dinner?” the underlying question becomes, what happened to the old way of doing things — in this case, taxi drivers? Economist Dr. Dmitri Koutsas, Assistant Professor at University of Chicago’s Harris School of Public Policy’s studies of tax forms finds the traditional taxi drivers’ market is actually not only stable, but consistent.
Findings show that the entrance of Industry 4.0 disruptors — specifically rideshare — isn’t replacing these traditional jobs. Instead, they’ve become so ingrained in shifting culture that they’ve generated more consumer demand. The question isn’t “what’s going to happen to taxi drivers — or traditional industries?” but instead, “what can traditional industries learn and apply from SaaS entrants?”
The pairing of increased availability of drivers and new, convenient methods to be able to call a car anywhere, any time has resulted in an entirely new transportation industry sub-category that compliments, rather than impedes, existing methods. Rideshare, along with other Industry 4.0-born brands like AirBNB, Grubhub and Instacart have been able to not just capture a slice of wallet share allocated for transportation, but create an entirely new wallet and type of transaction. People are willing to pay for the marriage of transportation and convenience, reallocating budget from other spend areas.
How? The obvious answer would be, “they created a product designed for consumers to desire something they never realized they needed.” This is only part of it.
In my opinion, Industry 4.0 brand success largely resulted from how they disrupted not only the product and service, but the stronghold on consumer beliefs and cultural rules. To allow latent demand to surface, brands need to solve a consumer need, but also break down any established beliefs or behavior barriers.
From this line of thinking, two successful examples of brands disrupting cultural norms:
Established Belief: Don’t Talk to Strangers
Entire generations of American children were taught, “don’t get into a car with a stranger,” and then likely shown a picture of a questionable-looking van retailing candy. This stranger-danger concept was also expressed as “don’t open your home doors to strangers,” “don’t speak to them on sidewalks” etc.
How did Uber/Lyft and AirBNB/VRBO breakthrough this fundamental safety perception? They successfully sold people on voluntarily entering strangers’ cars and homes by debunking fear in tandem with drumming up their platforms’ value. Rideshare apps strategically targeted early adopters, building credibility and value — ironically — in real life events. From there, they scaled, leveraging the power of referral, i.e. early adopters, star-based performance ranking, to create trust and the perception of safety. They sold their new approach to transportation services in a package of many layers of safety assurances in addition to the obvious value of ease/convenience/price.
Established Behavior: 5-9 = Family Time
The evolution of TV dinner is a foreshadow to how online delivery platforms like Postmates and Instacart changed meal-time behavior. Dinner was a once a very relationship-centric part of the day — from the purchase of groceries through to plates-on-table, all touchpoints required human-to-human interaction. The original driver of change? Brands like Swanson freeing mothers to live busy, professional lifestyles with their alternative pre-made, frozen meals.
Today, we’ve moved so far toward impersonal in the dinner transaction that you can go through the whole process without having to speak to an actual human. SaaS brands like Grubhub and Instacart have elevated the on-demand meal; most notably the how, where and when it’s consumed.
With technology further blurring the lines of work/life balance, these brands’ found success from making mealtime even easier for younger generations’ who don’t have the time or energy to stop by the store. The new normal is sitting on your couch with chinese take-out, delivered straight-to-door, the latest Netflix binge streaming and your laptop open to play catch-up from a meeting-filled day.
Untapped consumer demand is born outside the obvious purchase path. Brands seeking growth need to examine consumers’ lives outside of the bounds of a customer journey, external from an advertising lens, and consider their product/service’s role in the larger context of their life experience.
As leaders of existing, pre-Industry 4.0 brands, we need to, in a way, start over and reexamine where and how products/services can be optimized to better fit in the new Industry 4.0 landscape.
If you’re managing a clothing/accessory brand —
- What are the conversations shoppers are having about political topics? Their job? How are they raising their kids?
- Answers to these questions could identify avenues for brands to more naturally participate in unexpected cultural experiences and conversations like elections or the Olympics
If you’re marketing a hair care product —
- What is your audience’s perspective on trending social issues/topics? When/where/how do they travel?
- Depending on the answers, an opportunity might be for the brand to reimagine the way people evaluate products based on their individual needs. This could look like an AI solution that helps you find the right solution match based on elements like climate and personal care routine
Evolving demand creation methods are particularly complex for B2B brands who need to navigate both the changes in their own discipline along with those of their clients. Speaking personally as a B2B brand, we are seeing a change in how our clients structure their internal teams, budgets and roles/responsibilities as they explore ways to incorporate intuitive, technologically integrated experiences, products and services. Keeping a pulse on these shifts has informed ways to optimize our model and services to better support clients in these times of change. For us, this looks like a customized team of specialists that can flex to fit any type of client structure — internal agencies with overflow or brands in need of a new perspective.
This is the third of a five-part article series that covers the five key things to know about Industry 4.0 & the Gig Economy wherein I offer my perspective on implications and considerations for brand leaders. In the introduction, first and second articles, we examined the overall industry and ways brands can better reach & engage gig workers.
The next three topics include:
- Gig Jobs aren’t replacing jobs, but driving more demand: Rather than putting traditional industries’ full-timers out of work, ride sharing, specifically, has actually created more of a demand for driving services.
- Barriers to entry are low … but also high: Many attract to working with apps like Lyft / Uber and Etsy given the barriers to entry are extremely low — you can work when and how you need to, and don’t experience the barrier of potential discrimination through an interview process.
- We need more education & resources: There are ~500,000 open positions for computer software engineers, but only ~50,000 forecasted computer software graduates.
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