Renting shoes? DSW says “You shall go to the ball!”
Subscribing to a car? Volvo says “go for it!”
DSW has found a way to differentiate itself from the competition, solving a consumer’s pain of needing a specific pair of shoes for an event. Volvo’s “Care By Volvo” plan offers drivers, many of whom are already bucking car-ownership trends of the past, to have trouble-free access to a car.
These are good examples of the radical new types of revenue models that solve pain in the customer experience, enabled by innovative use of technology and the Internet of Things. Sounds great, right? They are brilliant ideas, it’s true. But new business models such as these create numerous issues.
Whether it is rental shoes or cars-by-subscription, logistics take on a whole new flow. It used to be fairly easy with the single direction of the product - from supplier to warehouse to store. Omni-channel made this much more complex due to different fulfillment points, but shoe rental or car subscription make it even more complex again - with products moving all over the place.
Technology requirements become massively important – all of a sudden you have to be able to track a given item through the supply chain – a specific route that will be very different every time, but also the gartnerreverse logistics element too.
New style business models like these mean that business processes become so much more complex than before and this puts pressure on the efficiency of the new - and perhaps existing - operations. To fulfil the needs you will need to consider using IoT to track the product through the supply chain until it gets to the customer. You may need a customer-facing app where the customer can browse the rental product catalogue for a request - but also to increase the length of rental or change the return location if required. And all this needs to plug into the finance, operational and logistical systems that already exist.
This kind of approach is an example of a digital business – one that uses technology to enable a new business model focused on the customer and customer experience. Innovation of this kind is rarely supported by commercial off-the-shelf application software.
To borrow the words of Massimo Pezzini of Gartner: “To make customer experience, IoT, ecosystems, intelligence and IT systems work together, a digital business technology platform must effectively interconnect all these sub-platforms at scale.”
A Digital Business Platform will enable you to rent those shoes in time for the ball. And will help your favorite car company to let you use their car on subscription.