[Tribune] Over the past 10 years, the personal services sector has been shaken up by the emergence of digital platforms. Consumers are attracted by the speed and ease with which they can order their services online, from meal delivery to DIY and housework, not forgetting hotels and transport….
While some of these companies are now enjoying great success, it’s clear that the personal services sector has yet to find its digital champion, despite some fairly substantial fund-raising. But it’s only a matter of time, because with over 10,000 independent professionals on his platform, WeCasa’s co-founder declares in Maddyness that “2023 has been a very rich year, since we’ve reached profitability, and we’ve managed to double business year on year” (Antoine Chatelain).
In 2015, the personal services sector came 3rd in the ranking of sectors offering the greatest growth potential for digital platforms. By 2025, it will be in second place. But what could explain why platforms are now able to penetrate this sector?
The gig economy: a windfall for platforms
The proliferation of small jobs, also known as the “gig economy”, is a trend that is encouraging the emergence of more and more micro-entrepreneurs (+30% over the period December 2020 to June 2022 – source: Insee), including in the personal services sector. Among these auto-entrepreneurs, more and more students, but not only, are attracted by the freedom offered by this status, particularly in the organization of their working hours. Platforms, for their part, are also taking full advantage of the changing gig economy to build up their player base and rapidly gain market share. Of course, it’s not enough just to attract these resources; they also need to be retained and trained, in a context of tight employment.
Evolving uses
With the pandemic, e-commerce has accelerated significantly, depending on the country and the observer. In the space of 6 months, e-commerce has grown by the equivalent of more than 5 years! The duration of the pandemic played a large part in anchoring this level of usage over time.
According to an article published in the digital magazine, this increase primarily benefits e-commerce sites that are associated with physical stores. “71% of online shoppers use e-commerce sites with physical stores”. Consumers are looking for local shops. 68% of respondents think that local shops should offer the option of ordering online.
During the lock-in period, over two-thirds (68%) of online shoppers say they ordered as much or more than before online. 24% claim to have ordered more on the internet during the confinement than during normal periods. This trend has encouraged the emergence of local marketplaces. These online platforms connect local sellers with consumers in their region, creating a dynamic circular economy. And what could be more local than personal services?
Personal services remain a service of proximity and trust. By calling on the services of a homecare provider, usually on a regular basis, we share a part of our intimacy, whether it’s for the upkeep of our home, looking after our children or assisting our parents. Naturally, we need to be reassured about the recruitment process and the proximity of an after-sales service (see pre-sales).
At Ogustine, we believe that service marketplaces can play a key role in the development of personal services, provided they rely on a network of local players (unlike some platforms that rely on a network of independent workers and a 100% virtual presence). They would offer convenient access to a variety of services such as residential cleaning, home tuition or videoconferencing, gardening, childcare… Customers would be able to browse provider profiles, read comments from other users and select the provider that best matched their needs. The advantage of relying on a network of local companies is obvious to us. Companies are available almost everywhere. Platforms are available in a few major cities. Companies have trained employees and are able to cover absences, a service and follow-up that is complex to provide for a platform with only freelancers. The chain of responsibility is simple: just contact the company….
The advantages are numerous, yet no franchise network has really seized this opportunity. There are a few private initiatives, such as Domizi.fr, which attempts to federate a network of companies, but merely matches supply and demand. We believe that the success of this type of platform depends on perfect interaction with companies in the order process, so that the customer has a choice and an immediate response, and that the handling of the request is as simple and rapid as possible for companies. This may seem “out of touch” for a traditional service company, but it’s the way consumers today seek out and buy products and services in many fields, including personal services. The online sale of personal services can no longer be considered an innovation, as it has been firmly established since 2014 (notably with Helpling, then with WeCasa and others…) and now represents a natural evolution in habits and practices. As Antoine Chatelain of WeCasa says in the same article: “We quickly realized that we were meeting a real customer need, both in terms of the quality of the professionals and the ease of access. Booking through WeCasa is much more convenient than using an agency.” Do agencies still have a future? Do we need to rethink the current model?
Franchise versus Marketplace
When we take a closer look, the development of a local marketplace is based on the same foundations as the development of a franchise: offering one or more services locally in different parts of the region, the country and, why not, the world. To achieve this, the franchisor recruits franchisees who are ready to develop the brand locally. Human services franchises are well aware that it’s impossible to expand nationally, or even regionally, without a local representative.
And it’s no doubt for these reasons that Helpling, a long-standing player in the household services platform, has changed its development strategy, moving from a centralized country development strategy to franchise network development in France. Indeed, in France, the personal services sector is essentially made up of private players (with employees), unlike in other parts of the world, such as North America, where the majority of players are self-employed or very small structures. In fact, North American franchise development is more akin to micro-franchising. This means that you can count more than 50 franchisees in the same town!
Today, franchise networks can develop on a new model by mixing physical and digital networks and/or by transforming their physical network into a phygital network (physical and digital). For example, a local physical branch could extend its catchment area with a digital presence, which would be beneficial both for customer development and recruitment.
It’s quite astonishing that the major networks haven’t already seized this opportunity to guarantee their development and sustainability. When we ask some of them, the answer is often the same: “we’ve got what it takes”, yet it’s often an improved form at best. Nothing remotely resembles an online order, with genuine interaction with the internal information system, enabling instantaneous assignment and response to a request.
However, the time has come for the4th industrial revolution, the search for a certain instantaneous satisfaction of needs. Web platforms have understood this: the response must be immediate! And whoever rises to this challenge, whether a historic player in the sector or not, will win. With a market value in excess of 20 billion euros, the market is sufficiently attractive to see the emergence of new platforms which, by dint of failure, will eventually succeed. And so it is with evolution. After all, the world’s leading room rental company is not a hotel chain, nor does it own any accommodation sites! The next major player in the sector (on a national scale) can no longer be a 100% physical network or a centralized 100% web platform. Amazon Home Services is a perfect example in the United States.
The personal services sector needs to begin its transformation, and the federations, too timid on these issues, need to open up the debate. As nature abhors a vacuum, the market will find its champion. The technology exists, it’s just a question of seizing it. The know-how of the historical players still gives them a head start, but for how much longer?
