29 Mar The Future of Retail | The Era of Convenience: Home Services
Recently, we spoked about a growing trend in the retail industry – the era of convenience. Our first focus on grocery was related to the ongoing development (slowly but surely) of a niche market in the U.S., which are the meal-kit subscriptions. In a context of ultra-convenience and customers rising expectations, let’s have a look at what’s new in the field of Home services in the US.
ALLIANCES BETWEEN RETAILERS & STARTUPS
Recently in March, Walmart, the biggest retailer worldwide, announced in turn its intention to roll out Handy’s services (in-home installation and furniture assembly) to 2,000 of its 5,000 U.S. stores. Founded in New York in 2012, Handy is an online platform of what we call ‘the gig economy’ (accounting for 34% of U.S. workforce in 2017), which enables to book home services professionals. The startup has already raised over $110 million, gathered 80,000 professionals and served +500,000 customers, for a total counting of a million bookings. This deal happens after a partnership agreement with Wayfair, the online furniture seller, and CEO Oisin Hanrahan intends to develop more alliances in the future.
“At Walmart, we are tirelessly searching for new and creative ways to improve the everyday lives of our customers by providing great experiences that extend from our stores into their homes,” said Daniel Eckert, senior vice president, Walmart Services and Digital Acceleration, Walmart U.S.
But Walmart is not a pioneer of this type of partnership. Indeed, we can not forget to mention Porch, a Seattle-based startup, which launched its platform in May 2014 to help homeowners maintain their home and get projects done by connecting them with quality pros. The company was even being funded by investors such as Jeff Bezos. But needing to further compete with Amazon’s integrated Home & Business services (since 2015), the brand has now sealled partnerships with dozen of major retailers in the U.S., such as Lowe’s, Bed Bath & Beyond and Pottery Barn.
Europe is also probably concerned by this model. The French e-commerce leader CDiscount.com operated an alliance with the platform Stootie, which offers qualified technicians for common handiworks when customers buy articles like couch, cupboard or TV stand for instance.
RETAILERS’ STARTUP ACQUISITION IN HOME SERVICES
Back in September 2017, Ikea, the Swedish home group we do not need to introduce anymore, acquired TaskRabbit for an undisclosed amount. TaskRabbit is an American startup founded in 2008 in Boston and now headquartered in San Francisco. Its concept is quite simple, particularly convenient and similar to Handy: it consists in matching freelance human resources with tasks that you are not able or do not want to accomplish yourself (mounting and installation, deep cleaning, furniture assembly, etc….).
Following the acquisition, Ikea announced this month that a furniture assembly pilot is running in some of its U.S. stores, in 6 stores in the Bay Area and tri-state area in New York. Thus when customers purchase items in-store or online, they are now offered to book an appointment as soon as the next day to assemble some of Ikea’s furnitures at flat rates, starting from $38 (the service is expected to roll out in additional stores in LA, Miami, Houston, Boston, Washington D.C. and more in 2018).
“In a fast-changing retail environment, we continuously strive to develop new and improved products and services to make our customers’ lives a little bit easier. Entering the on-demand, sharing economy enables us to support that,” Ikea chief Jesper Brodin said in a statement. “We will be able to learn from TaskRabbit’s digital expertise, while also providing Ikea customers additional ways to access flexible and affordable service solutions to meet the needs of today’s customer.”
IN A NUTSHELL
Retailers are rushing to embody both online and offline entities, both data- and customer-driven. Now fierce competition expects from these stakeholders not only to remain a corporate organization whose sole function consists in selling.
Customers require complementary services beyond the purchasing step. And considering how services’ offer has developed, there are now new market standards: online orders, express order delivery (same-day, 2-hour, etc…), click-and-collect. But last months demonstrate an imperative need for retailers to constantly go beyond the standards’ limits and, always, anticipate customers wills — creating a virtuous cycle, itself at the origin of the creation of tomorrow’s standards. And today, one of major stakes is to consider check-out as a means to ‘check-in’ in customers’ intimacy.