We don’t buy the things we used to; we subscribe. We no longer care about product longevity, but about upgrade paths. We don’t worry about product reliability if it is backed by stellar service guarantees. How should businesses adapt to the rules of a new marketplace?
Today, companies must re-imagine their products as platforms for ongoing customer relationships that afford the opportunity to expand, create new revenue streams, and establish lasting product value. They can no longer drive differentiation through product specification or economies of scale, because the playing field has been levelled through globalization, speed of innovation and access to Amazon-like business infrastructure at the click of a button.
We are already witnessing cataclysmic shifts in the automotive, commodities and energy sectors. To reinvent themselves as Product-as-a-Service providers, manufacturers must offer unique experiences and service identities, which demands a re-engineered product platform, and a revenue model which supports sustainable customer relationships.
Tesla, after selling 300,000 cars in six years without a dealership network, has destroyed the old role of vehicle dealerships. Meanwhile Lynk & Co has sold 120,000 cars through 220 retail outlets, all the while claiming to be a “lifestyle brand”.
When vehicles can be ordered on the internet, or when manufacturers can rack up orders for 200,000 cars without test-drives, what value does a dealer add? (To learn how to thrive in the direct-to-consumer landscape, check out these key insights) One of the largest dealership chains, PON Holdings, pondered this and developed Shuttel, a mobility service that gives consumers access to fuel pumps, trains, rental cars, bikes and parking. In under two years, Shuttel attracted over 150,000 subscribers.
To stay ahead, it’s vital to ask questions. Does your product roadmap work in concert with your revenue strategy towards your customer? Does your sourcing and/or logistics strategy allow you to differentiate, or merely provide an adequate customer experience? Industry 4.0 is designing the product, its intended experience and its delivery model – all simultaneously. Learn more in this in-depth Industry 4.0 article, and also check out current smart manufacturing trends.