After living through the pandemic in an increasingly digital world, consumers of the new era are looking for convenient, affordable and quality services. The growing importance of work-life balance and flexibility in new work models has also increased the need for on-demand home services. For example, the number of consumers using beauty or handyman services during weekdays has been steadily increasing.
Like any other consumer-facing industry, the omnichannel experience is vital to scaling growth in the on-demand services sector. Furthermore, digital development and accessibility to information have reshaped purchasing behavior and spending patterns. Now it’s easy for well-connected and informed consumers to switch their brand loyalty at the slightest inconvenience and leave a negative review; over 65 percent of consumers will break ties with a brand because of a poor service experience. Furthermore, the buying behavior of consumers in an on-demand economy reflects their specific needs and demands and is influenced by social, cultural and demographic factors.
To deliver a remarkable experience and ensure customer retention and loyalty, companies must adapt to consumer needs and preferences, and one of the ways companies can strengthen their relationships is by mapping the customer journey. In the United Arab Emirates, there are 9.9 million Internet users, and companies that offer hyper-personalized and localized services will generate more engagement and lasting relationships. At Urban Company, for example, we have noticed an increase in the number of women using our beauty services from the comfort of their homes. This is a significant change given that traditional salons are very prominent in the region.
Unlike before, brand loyalty cannot be taken for granted as consumers constantly reassess their relationship with companies in the experience economy. Tech-enabled consumers prefer meaningful experiences across all brand touchpoints, including simple user interfaces and seamless payment gateways. Additionally, they prefer real-time updates to their requests, and on-demand services should increase the focus on customer relationship management to ensure customer retention. Easy user registration, in-app chat options, and addressing consumers’ online privacy and security concerns also influence brand loyalty.
In the experience economy, companies that deliver an enjoyable and memorable experience can create a lasting impact on consumer beliefs and gain a competitive advantage. This is an excellent opportunity for on-demand service companies to scale their revenue stream. A recent Barclaycard study shows that around 52 per cent of consumers would rather pay for a good experience than for material possessions and 52 per cent of consumers also prefer to tell their friends and colleagues about a pleasant brand experience from a product they have purchased.
On-demand service providers must be ahead of the curve and anticipate customer needs. With strong competition, consumers question the USP of these services other than convenience; this is where on-demand platforms at home have the opportunity to disrupt the market with the most premium experiences in the home at an affordable price with the smart use of technology and tools. It is essential to provide unique services that other platforms do not offer.
Rapidly evolving consumer behavior in the on-demand economy puts businesses in a position to make impactful decisions, allowing them to stay relevant and ensure future readiness. According to Biztech, the global market for on-demand online home services is estimated to reach $4.1 trillion by 2027, with more service providers and vendors introducing and improving sustainable, scalable and convenient services based on consumer preferences. In addition, companies must constantly identify and bridge the gap between business and consumers and quickly adapt and change based on the ever-evolving environment.
