Moving from differentiation to disruption: What Uber can teach retail

Brian Walker & Vikki Weston

3rd Feb 2016

“Be like a postage stamp. Stick to one thing until you get there.” – Josh Billings

Isn’t it fascinating that the world’s largest accommodation provider doesn’t own a room, or that the world’s largest retailer doesn’t own a shop (for the time being) and here we have the world largest taxi company that doesn’t own a taxi.

So what might some of the lessons of Uber show us as retailers? The past five years have seen the logistics and transport app, Uber, grow from a start up with big ambitions based out of San Francisco into a global disruptive business operating in more than 350 cities, 64 countries and over six continents. Such rapid unheralded growth, underpinned by technology disruption and adaptation and above all challenging the normal or established models and just being disruptive, yet focussed on one central competency.

As a natural-born disruptor of the transport sector, of course Uber has naturally asked how do we build at transporting people? After all, Uber is not narrowly interested in transportation; instead, the company is building a logistics platform that captures and predicts supply & demand so well that it can be applied to many other commercial domains. However at the heart of the Uber offer is one common foundation offer – one great “glue” that transcends and links all their offers globally.

We live in an on-demand economy, where consumer’s ‘need it now’ tendencies dictate the retail strategies of retailers around the world. Smart or “fit” businesses are partnering their offers in collaborative models as distinct from attempting to “be all things and to simply attempt to acquire”

The horizontal integration model, in a world increasing without boundaries is becoming yesterday’s approach. Today’s Uber-like approach is to disrupt and collaborate with other specialists enabling global growth and far greater efficiencies in all forms of the business operations.

So where does Uber sit in the future of the retail sector in Australia and how is partner collaboration showing the way forward?

Last October Uber launched Uber Rush in Chicago, New York and San Francisco. An on-demand delivery service for retailers, and while it’s launch coincided with partnerships with some big name retailers such as Rent The Runway and Nordstrom, the potential this service offers to small retail businesses is huge.

Entering this on-demand delivery market aligns Uber alongside logistics giant Amazon.com and in particular Amazon’s program Flex, which pays independent drivers to deliver orders locally.

However it also aligns independent brick and mortar retailers alongside the big e-commerce giants. While in the past it may have seen like a long lost dream to small independent retailers to be able to compete on the same level as the e-commerce giants who own their own complex logistics models allowing for same day and next day delivery, Uber Rush makes this dream a reality at very little cost. Retailers signed up to Uber Rush are given their own merchant platform to book the cars or bike couriers live as the orders come in, and all they pay for is the trips they use.

According to Jo Bertram, regional general manager for the UK, Ireland and Nordics at Uber at a WIRED retail conference in London last year, the goal of Uber Rush is to make getting anything in your city more convenient, affordable and reliable than picking it up yourself.

UberRush is particularly exciting for small independent retailers, allowing them to cater to today’s consumer’s ‘need it now’ tendencies’, boost customer loyalty and satisfaction, and ultimately provide customers with the same cost effective and efficient shopping experience when shopping local that they would get online. This platform also provides the small retailers the opportunity to grow and scale by reaching customers further away than they may have been able to before.

Research by Uber suggests 60 per cent of customers would pay more to get same day delivery. Add this to today’s consumer journey to a brand or retailer often beginning and ending on mobile, the potential growth and adoption of this service all around the world is huge.

Retailers who understand this disruptive positioning coupled with smart partnering and who don’t define the market by geography, rather by customer catchments are trailblazing the new frontier of retail.

Retail consultant and advisor, Brian Walker is founder and CEO of Retail Doctor Group and can be contacted on (02) 9460 2882 or brian@retaildoctor.com.au. Vikki Weston is part of Retail Doctor Group’s Retail Insights team and can be contacted on vikki@retaildoctor.com.au.