Gig Economy

Customer Service Can Be A Competitive Advantage For Digital Platforms

Customer Service As An Advantage For Platforms

The crux of the Payments and The Platform Economy Playbook is that with 162 million workers in the U.S. and Europe currently involved with the gig economy, projected to be serving 86.5 million consumers by 2021, sharing economy platforms can’t just meet customers’ needs – they also have to anticipate them.

Additionally, customer service is becoming a differentiator among digital platforms. Companies are using artificial intelligence (AI), application platform interfaces (APIs) and other technologies to create new channels for service and customer communication to appeal to a wide range of users.

Older customers might prefer human interaction and want nothing to do with automated help, while millennials or Gen Z might want to solve their issues through chat windows powered by AI. Even though more companies are turning to AI and automation for faster transactions and stronger data security, many are finding that humans still have a critical role in customer service.

Innovations are apparent in the apparel and fashion industry, with new models like clothing rentals, subscription services and “try-before-you-buy” offerings providing an improved customer experience even when shopping online.

While Amazon made its name through online sales, one of its latest ventures, Amazon Wardrobe, which launched a trial in 2017, fits into this new push to go beyond the transactional and offer more customer service-focused attention.

The try-on service allows consumers to order shoes, accessories and clothing with no upfront charge. After seven days, they can decide what they will keep and pay for, and the rest can be sent back (for free, if they are Amazon Prime members).

“Prime Wardrobe is a new service that brings the fitting room to you, so you can try the latest styles and find your perfect fit before you buy,” Amazon said on its website when announcing the rollout of the service.

This service mimics already established offerings like Stich Fix and Trunk Club, a customer-centric approach based on observing what consumers want and giving it to them. Stitch Fix, a company that recommends clothing based on consumers’ tastes, recently beat earnings estimates for Q2 2019, a feat that President and COO Mike Smith attributed to its new inventory optimization algorithm that uses data science to pair inventory with customer preferences.

According to the Payments and The Platform Economy Playbook, the U.S. clothing rental market is projected to reach $4.4 billion by 2028. That’s why companies like Rent the Runway are seeing such success and going new directions with brick-and-mortar shops, designer lines and even home goods rentals.

PYMNTS spoke to Brittany Johnson, CEO and co-founder of online subscription-based clothing service FashionPass, who reiterated how customer service will be a competitive advantage for digital platforms, even more so than tech. AI could potentially enhance customer service and increase the delivery speed and personalization of each box, but it’s “not quite” there yet, she said: “Customer service is going to majorly separate the five-star rental companies from the two-star.”

It’s not just traditional retail models that are getting makeovers. The hospitality industry is also undergoing a transformation.

While Airbnb is practically synonymous with the homesharing market, traditional hotel chains are also getting into the act. Marriott recently announced a new service, Homes & Villas, that offers guests short-term stays at approximately 2,000 luxury homes, a high-end move that could give Marriott a niche in the increasingly crowded market.

Hyatt Hotels Corp. and Hilton Worldwide Holdings Inc. are also said to be looking into the home rentals business. And in a reverse move, Airbnb has acquired Hotel Tonight to expand its customer base.

When it comes to activities like travel booking, customer service can also encompass avoiding payment and security frictions for property owners and buyers. Juraj Striezenec, chief financial officer for travel booking platform, spoke to PYMNTS about how the site is streamlining payments while providing seamless customer service. “Accepting payments online is a very complex topic, but there are certain risks that apply more to travel,” he noted.



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.