I call it the rise of the "Convenience Economy" and I've included three examples below. Here's my definition of the Convenience Economy:
Businesses winning in the convenience economy are adding convenience by eliminating friction in the buying process.
I see four rules for winning in the convenience economy. The most important one is the last:
- Convenience is more important than price.
Customers have thus far demonstrated they are willing to pay extra for convenience. The cost of convenience hasn't been driven to zero... yet. Unlike many other industries in which costs have been driven to zero (free email providers, free news via websites, free shipping, etc.), people have demonstrated they are willing to pay for convenience.
- Convenience does not appeal to everyone.
The convenience economy is not being brought to the masses. Approximately 16% of Americans live below the poverty line — defined as a household income of $24,250 for a family of four in the year 2015. And according to the US Census Bureau, the median household income in the US in 2014 was $53,657.
In my very unscientific opinion, this means at least 16% and perhaps even more than 50% (the median) of Americans cannot afford the price of convenience, in general terms. The convenience economy appeals to the middle class and up. There are some people who simply can't afford to take an Uber ride or have their groceries delivered by Peapod.
- Mobile devices are powering the convenience economy.
Smart phones are enabling new methods of consumer convenience. Businesses winning in the convenience economy are taking full advantage of mobile technology: voice, text, photos, videos, geo-location, etc. This isn't to say that the only way to add convenience is via a mobile device, but it's certainly a good way.
- The strongest brands will win.
The Paradox of Choice tells us consumers cannot deal with an overwhelming number of choices — they need to pick from just a few options. So, while there has been a proliferation of businesses tapping into the convenience economy, only the strongest brands will survive. "Strongest" means many things, including most trustworthy, most unique, most consistent, and of course, most convenient.
Here are three of my favorite recent examples of companies that have added levels of convenience in order to make their customers' lives easier and increase sales:
- Artkive Concierge. Artkive is a cool app that enables parents to take pictures of their children's artwork, organize it, and then print picture books of the artwork. It's a great app if you have the time to take a picture of all of your little one's artwork. But if you don't have the time, you can take advantage of their Concierge service. Just pile all of little Johnny's artwork in a box of your choice — in any order — ship it to Artkive, and they'll take pictures of every piece, lay it out nicely in a book, allow you to give feedback, and then print and send you a book. They'll even return the artwork to you when it's all said and done. I've used the service and it was fantastic.
- Angie's List SnapFix. Sometimes you need some work done on your home and you don't have time to research the best company for the job. Enter Angie's List SnapFix. Members simply describe their problem with text, photos, and videos (most easily done via their app), add a date and time in which they're available for service, and Angie's List goes out and finds the best company to handle the job. I recently used the service for a hodgepodge of home repairs I needed done and it was great.
- Dominos. Many restaurants offer online ordering, but Dominos leads the way in convenience via their digital channels. Their mobile app is fantastic. And for their most tech-savvy customers, ordering via emoji is the most convenient way to order a pizza. While at first glance this seems like a gimmick, it truly is a very convenient way to order a pizza. It certainly reduces all friction in the purchasing process.
According to their website, more than 50% of all Dominos orders come through their digital channels. Customers clearly like how convenient they make ordering a pizza.
How is your business taking advantage of the convenience economy? It's not too late to eliminate friction in the buying process and boost profits.
There's never a lack of ideas.
I'm not the first to call this the Convenience economy. In 2014, Box CEO Aaron Leevie Tweeted the first explanation that I've seen: "Convenience economy" formula: take a service that was previously cost prohibitive for most (due to friction) and bring to the masses." I love his use of the word "friction."