Forget That Product You're Working On. What's Really Going to Sell in the Future Is ... Services.
Today’s consumers value their time more than ever. With the proliferation of on-demand apps, there is virtually no need to wait in lines or even to leave your house if you’re that much of a homebody.
You know the drill: Amazon for your groceries, Netflix for date night, Handy for that light bulb you just can’t reach and even on-demand car services to care for the car you hardly ever drive because you ride-share everywhere. Yeah, welcome to the future.
Yet, as with everything, change is constant. So, if you think today’s adults require instant gratification, think about the high demands the next generation will have. For this reason, those building a business they hope will last should consider shifting from providing goods to providing ... services.
Spend money to buy time
A recent study in the Proceedings of the National Academy of Sciences suggested that people who spend money on time-saving services feel happier. "What we found is that people who spent money to buy time reported being almost one full point higher on our 10-point [happiness] ladder, compared to people who did not use money to buy time," wrote Elizabeth Dunn, an author of the study and a professor of psychology at the University of British Columbia. “People from across the income spectrum benefited from ‘buying time.’”
One consumer expert has labeled this phenomenon the "do-it-for-me" movement. That expert is Scot Wingo, cofounder of ChannelAdvisor and CEO of Spiffy, an on-demand car care service. Wingo says that the future of consumerism is no longer do-it-yourself (DIY), but do-it-for-me, or DIFM.
“The do-it-for-me consumer mindset disavows DIY,” Wingo told me in an interview. “The DIFM consumer discovered the power of convenience through the on-demand economy and never looked back," he continued. "[These consumers] prioritize spending time with their kids or their hobbies over mowing the yard, cleaning the house or washing their cars. Importantly, the DIFM consumer is willing to spend money to save time."
Others are starting to agree. To research the future of the on-demand economy, I listened to an interview with Vikrum Aiyer aired on the Penn Wharton Public Policy Initiative podcast. Aiyer is the strategic communications and public policy lead for Postmates, Inc., the on-demand logistics and delivery platform.
During the podcast, Aiyer explained that Postmates had actually seen its retail partners increase their sales three to four times over their previous level once it -- the company -- started using on-demand delivery.
“This goes well beyond food, because we’re actually servicing hardware stores and beyond," Aiyer told his interviewers. "And that’s actually because of a new reach of their customer potential, in which geographically if they were located on one side of town, they’re now reaching customers at another side of town.
"This validates," he continued, "the thesis that the on-demand economy and automation are going to really change, and are changing, the way commerce is connecting communities."
The lesson for entrepreneurs
So how should entrepreneurs and business leaders respond? They should target consumers who are willing to spend money to save time. As entrepreneurs, we can use that information to shape marketing messages, ad copy, new products. Whatever product we're creating or selling, we should incorporate into it the fact that consumers are willing to spend money to save time.
“When you look at GDP in the U.S., products or goods represents 20 percent of GDP, and services represent the other 80 percent,” Wingo told me. “Using those broad strokes, I think [the trend for] ‘services go digital’ could be four times as large an opportunity as ecommerce.
"In the next five years, I think it will feel as archaic as using the Yellow Pages to have to ‘call’ a service provider. Your phone will be the remote control for your life, and you will have a myriad of products and services available to you at your whim in a completely transparent and digital way.”
While some detractors will argue that DIFM is a luxury exclusive to the wealthy, that’s not actually the case. DIFM is beneficial for anyone who can benefit from time saved. “We thought the effects might only hold up for people with quite a bit of disposable income, but to our surprise, we found the same effects across the income spectrum,” Dunn shared.
Giving consumers the ability to ‘buy back’ an increasingly scarce resource -- their time -- is the future of consumerism. Sounds a bit like the sci-fi thriller In Time (lLOL), but in order for on-demand companies to move past the ‘Uber of…’ era, a huge market opportunity will consist of consumers looking for DIFM options.
"Moving people up on the ladder of life satisfaction is not an easy thing to do," Dunn said. "So, if altering slightly how people are spending their money could move them up a full rung, it's something we really want to understand, and perhaps encourage people to do."