Small and Medium Sized Businesses Invest in On-Demand Economy Strategies
February 17, 2022 | Bank Iowa
Traditional business models are getting a rehaul thanks to the rise of the on-demand economy. End-user expectations for immediacy are through the roof, creating a market-agnostic shift in business priorities and the acceleration of investments in a range of digital strategies.
In a nutshell, the on-demand economy describes the economic activity brought about by technology companies and disruptive startups that fulfill demand via the immediate delivery of products and services. DoorDash, Netflix and Uber are classic examples. Newer disruptors include Axiom, which provides on-demand legal services, and Paychex, which enables businesses to give their staff access to income as its earned.
Of course, legacy businesses are also getting in the game. Take Walmart’s 2-hour Express Delivery service, for example. Or Keystone Mountain Resort. The 55-year-old ski resort now offers visitors a real-time app that shares lift-line wait times, giving skiers on-demand access to data that improves their experience. Even within our own business, the shift to on-demand banking has been a major driver of our investment in better online and mobile apps, as well as enhanced payables and disbursement solutions.
Three on-demand strategies for SMBs
Small- and medium-sized businesses (SMBs), too, are searching for ways to play in the on-demand sandbox. This includes ag-based businesses, owners and leaders of which have seen the numbers: Nearly 40 percent of all on-demand consumers live in rural areas.
In a recent Bank Iowa poll, 36 percent of SMB respondents said the on-demand economy was impacting their business at least “somewhat,” if not “seismically.” Nearly 17 percent said they’ve had to make “major changes” to their business in response to the shift in expectations among end-users.
Just a few of the investments these businesses are considering, include:
Data analytics solutions. Users of on-demand services have high expectations for personalized service. They believe in convenience above price. However, in return for spending more, they expect a company to demonstrate familiarity with them and their needs or preferences. Data solutions that put real-time, highly relevant and prescriptive information about customers at the fingertips of service teams are becoming an essential asset for on-demand businesses.
Location-based technology. Most successful on-demand services are local. If not headquartered locally, they at least create a patchwork of local workers and service providers to give customers the local experience. Investments in technologies like geo-fencing, navigation software, social networking services, location-based advertising and tracking systems are helping legacy firms improve on-demand capabilities.
Multiple channels for commerce. Particularly for B2B businesses, the customer journey can be complex, and it’s only becoming more so with the rise of digital channels and e-commerce. Customers buy in phases across several platforms. They might hear about a product or service from a friend or colleague and then move into a research phase by visiting a website. Further inquiries can happen in a variety of channels, from online chat to the good old-fashioned telephone. Investments in omni-channel commerce are not only expanding the number of ways customers can interact with a business; they are also ensuring seamless interplay between those channels so customers don’t have to “start over” when moving from an auto repair shop’s mobile app to a physical location, for example.
A recent Business Insider article reported, “the on-demand economy is here to stay. It will represent the fastest and most significant shift in spending since the advent of internet commerce.” Bank Iowa lenders and SMB consultants are in talks with many of Iowa’s SMBs, from ag to retail, about strategies for staying relevant in this fast-advancing environment. If they can be of any help to your team, as well, don’t hesitate to reach out.
With more than $1.7 billion in assets, Bank Iowa ranks as one of the leading independent ag banks and the second-largest family owned bank in the state. Farmers, families and businesses access Bank Iowa’s products and services through 26 locations in 23 communities, as well as online and on mobile devices. To learn more, visit bankiowa.bank. Member FDIC.