The Digital Economy for the Modern Marketer

Armen Karaoghlanian
Armen Karaoghlanian
August 2, 2016

 

The new digital economy that we are examining goes beyond buying things online. It’s adding language into our lexicon. The new digital economy is a sharing economy and prefers on-demand services.

Pew Research’s recent study looked at these new trends to see who’s using them and how it’s leading us into a new digital divide.

The new economy is being led by the likes of Uber, Lyft, eBay, Airbnb, as well as a few others. Pew shows us the usage of these products. These activities involve the purchase of used goods, shared space (including a car), or donated to an “online fundraising project,” such as Crowd Source. We have always sold goods that we finished using, but in the past that was done by word of mouth or newspaper classified advertising. We now have Craigslist, eBay and various forms of social media. The process is much easier and faster as a result. It’s right at our fingertips and that goes a long way to explain why it’s taken hold.

Pew also shows that 41% of adults have used a service that offers same day or expedited delivery. This refers to Amazon and other retailers who will ship to consumers faster, but at a higher price. In all, the study says that “72% of American adults have used at least one of these 11 different shared or on-demand services.”

Is it possible that some people have not even heard of these services? Yes, according to the study.

  • 61% of Americans have never heard of the term “crowdfunding”
  • 73% are not familiar with the term “sharing economy”
  • 89% are not familiar with the term “gig economy*”

We’re sure you know what gig economy is, even if you haven’t heard the term before. It’s a series of “gigs” that more and more people are using for employment. This includes freelance projects, consultancies, and work from home projects.

Who’s using these services?

  • Young
  • Urban residents
  • College-educated
  • Above average income

The study goes into more detail, but the key takeaways are this: young, urban, affluent and educated Americans are driving seismic changes in the marketing landscape. They want products and services now. They want them discounted. They want to make these purchases without going to a physical location. They want to make them from their phone (primarily).

Who isn’t using these services?

  • Older
  • Rural residents
  • Lower income people

The fact that these three groups are not using these services and purchase platforms is not a surprise. These three groups have historically been late acceptors of technological advances, whether it’s because of budgetary reasons or the lack of a real need for the advances at hand. Their late acceptance rate has held true for decades.

What does this mean for the modern marketer?

Well, on a most simplistic level, this means that early adaptors in large enough numbers (and these are) will drive overall change to the marketplace. This happened with the home computers, the internet and cell phones, and it’ll happen here. The fact is mobile access to shared products and services with instant-gratification delivery is here to stay, that is until the next thing comes along.

If you are a restaurant that does not offer delivery or is not connected to a meal delivery service such as GrubHub or OrderUp, for instance, you could be left behind. In that same sense, a retailer that sells online, but without an option for next day delivery, may have difficulty surviving.

This report also speaks to who’s driving the marketplace. It’s accurate to say that numerous groups impact the American marketplace, so several marketing models can still work. It’s also accurate to say that young, affluent, urban people are driving changes in the way we shop and how businesses need to conduct their business. In fact, older Americans are adopting many of these changes, even if a bit slowly sometimes. The same cannot be said of the reverse.

The lesson is clear, for a glimpse of how your company will be structured and how it will be marketed, keep an eye on the kids.

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