We have found through our research, working closely with our clients and their customers, that the actual customer expectation is paradoxically both easier to fulfil and more demanding.

The Iconomy: What I want, where I want and when I want it.

We have found through our research, working closely with our clients and their customers, that the actual customer expectation is paradoxically both easier to fulfil and more demanding.

The On-Demand Economy is trending across all areas of retail, which is interpreted by most as instant, next hour, or at worst, same day fulfilment of an order. But what we have found through our research, working closely with our clients and their customers, is that the actual customer expectation is paradoxically both easier to fulfil and more demanding. It is:

What I want, where I want and when I want it.

Customers are demanding to define the delivery time (to an ETA window level of 1 hour), but that doesn’t necessarily mean right now. It might be 4pm tomorrow after school pick up, 8am on Monday before work or 10am on Saturday.

We call this new economic reality of heightened consumer expectation the Individual Economy - or ‘Iconomy’ for short.

Iconomy is driven by consumer demands. There are a number of macro themes and also some pioneering companies that have established what the new expectations are. These macro themes are:

1 - Individualism (or “I’m a unique snowflake”)

2 - Speed of expectation adoption

3 - Market consolidation

4 - Enabling technology

1 - Individualism (or “I’m a unique snowflake”)

Marketing and advertising have evolved from a one to many messages that broadly targets people in groups with ‘best fit’ messages, to highly personalised and targeted one-to-one communication. Using the digital insights we leave ourselves through our online activities, smart companies use this data to reflect back to us our unique traits and reinforce that we are indeed, individual.

2 - Speed of expectation adoption

Humans have a marvellous ability to adapt to change, particularly when that change is perceived as making life easier. We swiftly adopt new technology and transfer the expectations that this tech creates to other situations. For example, if I can self-serve check-in to a flight, why can’t I self-check-in to a hotel? If I can nominate an hour time slot for my supermarket order to be delivered to my house, why can’t I do the same when my boiler gets serviced/my broadband gets installed/my parcel gets delivered?

We see how quickly technology is developed and have little loyalty and patience when our new expectations are not met within weeks. Our buying patterns shift almost subconsciously to those brands that provide the experience we find most convenient and simple.

A better parcel delivery experience means I am unsatisfied with having to wait in half the day (or worse) for a service technician to arrive. Companies who can’t meet this expectation are under threat from new entrants who can, and they will rapidly win massive market share.

3 - Market consolidation

Amazon has rapidly grown to over 50% of eCommerce in the US and having just entered Australia, we anticipate a similar story as in other markets. While eCommerce is still only a portion of total spend, it continues to grow rapidly and cannibalise parts of the traditional retail model, forcing incumbents to adapt or die.

This has a ripple effect on related industries too. If you’re in the business of shipping parcels for large retailers, this consolidation effect could be bad news. As the number of retailers (shippers) that control a large portion of the number of parcels being sent decreases, their buying power grows. Logistics companies turn from price setters into price takers as the cost of what the retailer is willing to pay is dictated rather than negotiated. To maintain some sort of operating margin, the logistics companies will also be forced to either consolidate and/or be more efficient, which leads us to…

4 - Enabling technology

Rising above the hype about drones, robots and underwater or flying warehouses, it is important to understand what is likely to happen and when. The pressure of massive growth in volumes of deliveries and negative margin growth means logistics companies, in particular, need to be at the front of adopting technology that strips costs and improves predictability and experience.

History shows us that industry most often leads the adoption of new technology before it filters to consumers, and use it to automate the simplest tasks first. A massive volume of trucks follow the same route, stops and schedule every day. Various simulations and articles suggest that owning and running an autonomous line-haul truck will be 20-50% cheaper compared to existing manned vehicles. Expect this first mile of the supply chain to be automated first as it is much simpler than the complexities of crossing crowded pavements, climbing stairs and navigating the general urban mess of the last mile.

The individual consumer is driving the growth of Iconomy. We are expecting to see companies meet growing demand for new delivery models, like crowd-shipping, on-demand delivery services, evening and weekend delivery. Survive and thrive businesses are investing in last mile solutions that increase consumer choice and flexibility, whilst helping to shorten delivery times and lower delivery costs.

Iconomy Fulfilment

Companies in the retail, logistics and services industries that are being forced to adapt to the customer demands imposed on them by their customers, and the pressure of their competitors meeting these demands, are in the category of Iconomy Fulfilment.

Localz is the leading provider of software services that help enterprises in the retail, logistics and services sectors rapidly transform their businesses to thrive, not just survive in the Iconomy.

Tim’s vision for Localz technology is that it can help deliver happiness through fulfilling customer delivery expectations first time. Technology that enables companies to provide their products and services where customers want them and when they want them.

Written by Notion family member, Localz

www.localz.com

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