What started with only a few major players such as Uber and Airbnb has ballooned into something much bigger that we call the “sharing economy.” But how did the emergence of on-demand apps get so huge that it earned itself the name of its own economy? There are several factors but perhaps the most important factor is that on-demand sellers are disrupting brick and mortar businesses.
The idea of disruption in business really accelerated with Clayton’s Christensen’s book, The Innovator’s Dilemma[i] when he introduced the term “disruptive innovation”. The idea behind disruptive companies was that they not only met the needs of their customers today, but also anticipated future needs. By doing this, small companies with limited resources could compete with larger corporations and even displace the established market. And if you look at on-demand apps, many of them are doing just that!
Ways On-Demand Sellers are Disrupting the Marketplace
On-demand sellers are disrupting brick and mortar businesses in a number of respects, but there are three main ways that stand out above the others. These are mobility, hours, and delivery.
The Mobility Aspect of On-Demand Apps
A traditional brick and mortar business by definition is not mobile. Typically, when people have a choice, they will patronize a business that is nearby rather than driving to the opposite side of town. This limits the geographic reach of that business.
But with on-demand apps, the sellers are completely mobile and the only thing limiting the sellers in this respect is how far they are willing or able to travel.
On-Demand Sellers are Always Open for Business
Another limitation of brick and mortar businesses is that most of them cannot afford to be open 24/7. It simply isn’t feasible to pay a staff person to be on duty at 3 am just in case a customer shows up. With on-demand apps however, sellers make their own hours so if you need someone to come and fix your car in the middle of the night, you’ll likely be able to find that person through an on-demand app.
The Delivery Aspect of On-Demand Apps
The third way in which on-demand sellers are disrupting brick and mortar business is with the delivery aspect. In the past delivery was mainly the purview of pizza joints but today with the rise of on-demand businesses, it is possible to get delivery of everything from massages, to child care.
No longer do customers have to go to a clinic or a daycare to get the service they are looking for – now they can find the expert service they need simply by scrolling on their smartphones.
What Does This Mean for Sellers?
For individuals who have a skill or talent they would like to earn an income from, this disruption is great news. By finding the right on-demand app that compliments their skillset, these sellers can start their own mini businesses with very little overhead and yes – even compete with larger brick and mortar businesses.