The Harvard Business Review's The On-Demand Economy Is Growing, and Not Just for the Young and Wealthy covers research showing the on-demand economy is attracting more than 22.4 million consumers annually and $57.6 billion in spending.
More interesting is the data on who these consumers are. Consumer use of on-demand services is widespread and has entered the mainstream. Key quote from the article:
The NTRS data shows that while men are still the most prevalent consumers of the on-demand economy (55%), 45% are women. Unsurprisingly, almost half (49%) of on-demand consumers are millennials (age 18-34), but 30% are between 35 and 54, and 22% are age 55 or older ... 46% of on-demand consumers have an annual household income of less than $50,000, and only 22% have an annual household income of $100,000 or more. It’s also reaching a diverse geographic spread in the U.S., with 39% of on-demand consumers living in rural areas or small towns, 30% in outer suburbs, and 31% in close-in suburbs and cities.
Also interesting is participation in the on-demand economy has moved well beyond early technology adopters.
As the article chart below shows, even those who are not big fans of technology are starting to use on-demand services (see the article for the definitions of each segment).
This data dispels several myths about the on-demand economy.
First, on-demand consumers aren't just rich, young urbanites. The data shows a broad spectrum of consumers are embracing the on-demand economy including older Americans, those with low and moderate incomes and people living outside of cities.
This data also shows consumers like and are using on-demand services. This means despite the many press reports to the contrary, the on-demand economy is not dying or even sputtering. It means it's growing and will continue to grow.
Yes, some on-demand startups have failed.
But this is simply how new industries evolve. Lots of startups are funded, many fail, some become decent sized companies and a few become very successful.
Internet search is a good example. In the late 90s there were dozens of venture or corporate backed search companies. Most failed, but I think it's fair to say search overall has done OK as an industry. There's even a growing number of specialty search engines successfully living in the shadow of Google.
Industries thrive by providing products or services that add value to their customers. It's clear from this data - and other studies - that consumers see value in on-demand services.
So when you read about the on-demand economy being in trouble, keep in mind large numbers of consumers are voting in favor of it with their wallets.
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