How SMBs Can Respond to the ‘Uber Effect’

A lot has been written about consumers using their mobile devices to make local search a more demanding, instantaneous process. As Google noted recently, half of consumers who conduct a local search on their smartphones visit a store within 24 hours — and 18 percent of those searches result in purchases within a day. In fact, the collapse of the customer lifecycle via mobile search looks like a microcosm of a larger move toward more convenience and faster service. Local businesses need to be aware of this opportunity, and respond accordingly.

There are constant signs of the move toward “service me now” mentality in formal and less formal ways. More and more companies are claiming to be “the Uber of ______.” I’ve met the Uber of plumbers, the Uber of house cleaners, the Uber of lawn mowers, and the Uber of dog walkers, all promising to make life easier by providing convenient, on-demand services. And just take a look at the news for more signs of the uptake of our on-demand culture:

• Amazon rewarded its Prime members by making it easier to buy more stuff from Amazon. The online retailer rolled out its Dash button that makes shopping for Gatorade and Tide as easy as pushing a button literally affixed to your household belongings (but it’s still under a limited roll-out, as only 18 brands have signed up to participate). In May, Amazon launched same-day delivery for Amazon Prime customers who qualify.

• Facebook, Google, Instagram, and Pinterest are among the many digital giants that have recently disclosed the launch and development of “buy buttons” that permit people to purchase goods and services from inside their platforms, all attempting to reach consumers more quickly and easily.

Amazon, Facebook, Google, Instagram, and Pinterest all promise to threaten offline businesses as the digital brands step up their efforts to make life a more on-demand experience. We’re talking about an Uber effect here. But businesses operating offline storefronts have many options in response, such as:

• Fight fire with fire. Not to be outdone, 7-11 has launched one-hour delivery in the United States, Taco Bell will cater to your door, and I was just in clothing retailer Topshop and saw signs offering free home delivery for all in-store purchases. In some ways, these moves feel like a throwback to an era when local businesses such as grocers and pharmacies delivered to your home. But at a national level, only a small handful of companies will have the resources infrastructure — or access to a national channel partner — to pull off a delivery service.

• Rely on location marketing to draw people to your store and keep them. As is becoming increasingly apparent, the growth of mobile wallets gives businesses more opportunities to attract customers by providing offers that rely on a person’s proximity to a storefront. One in six consumers is using a mobile wallet, and businesses such as auto aftermarket supplier Pep Boys are enjoying growth in foot traffic and sales by employing mobile wallet offers. Once you have customers in your store, you can use location marketing effectively to keep them coming back. For example, Target just joined the ranks of retailers incorporating beacons into stores. Target announced that the company will rely on beacons to cross-sell merchandise and to provide better customer service while shoppers are browsing through their stores if they have the Target app installed on their phones. This app will also help shoppers create and manage their shopping lists from their phones or wearables like an Apple Watch.

• Rely on the human touch. No matter what advantages the digital world provides, local storefronts can and should wield their most powerful weapon: face-to-face human interaction, and the ambience that only a physical location can provide. The human touch is that bookseller who spends time knowing your tastes and chats with you about your opinion of Go Set a Watchman instead of simply suggesting it to you based on an algorithm. Or the restaurant concierge who welcomes you by name and asks about your family. There is no substitute for the little details of human interaction.

If the past 15 years have taught us anything, it’s the resilience of brick-and-mortar businesses. Effective enterprises sense and respond to change by incorporating new technology and business models while relying on their distinct advantages, such as face-to-face service and distinctive ambience. We might be living in a more on-demand society, but it’s still a human one, too.

Adam Dorfman is SVP of product and technology at SIM Partners, where he leads the teams responsible for the best in class local automation platform Velocity. Follow him on Twitter @phixed.