Overview

Will on-demand run your business model over?

In today’s world, customers require products and services to be more flexible, faster and more personalized than ever before. This development includes the trend of on-demand, where you can consume whenever and for as long as you want. In turn, companies are being pushed to aim for new and mostly digital business models. So, how is on-demand affecting your products and services? To provide you with an answer, we slice the topic into three dimensions: feature on-demand, service on-demand, and asset on-demand .

Feature on-demand: Physical products are all about the features.

At first sight, a smartphone is besides the look no different than any other phone. What makes the difference, are the countless opportunities that arise to customers through app stores. No matter whether the user wants to book a flight ticket, pay back her friend instantly or watch her favorite series while riding the tram. All of those options are available at any time. Ultimately, the possibility to use features on-demand helped the smartphone to its incomparable success story.

We observe that this effect is now stretching out to any other physical product. One example is the car seat for which a customer can activate the “massage”-feature on their way home after a long day at work. Tesla drivers can unlock features of their autopilot or propulsion they forgot to order in the first place. Generally, the physical product itself becomes a software platform, whereby the value will come from the eco-system of features available on-demand on top of the basic product.

Service on-demand: Services are instantly available.

Looking at current trends in e-mobility, smart devices and smart homes as a whole, it becomes clear that electricity supply is a service customers demand access to anywhere at any time. Widespread energy storage solutions through powerbags, home batteries or even bidirectional charging via electric vehicles are now ensuring this needed energy as service on-demand .

The concept of service on-demand is by far not only relevant in the energy sector. In fact, we see interesting opportunities arising in the insurance industry, as well. Today, it is no longer necessary to commit to a months or even years long insurance plan. Rather than that, flexible insurance providers offer coverage for a few hours a day or a few days a week while simplifying the sign-up process significantly. By using apps like AppSichern, customers are now able to match insurances with their daily activities while making sure they only pay for what they actually need. Notably, this process will be automized in the future where smart devices constantly transmit user data to insurance which adjust the needed services.

Asset on-demand: The value of assets lies with the broker, not the owner.

When it comes to on-demand access to objects the concept of Asset-as-a-Service is gaining wide attention. For instance, instead of staying at hotels during a trip to another country, many people like the idea of spending their nights at someone’s private home. Airbnb picked this idea up and built a disruptive digital platform that makes the homes of residents available to guests from all over the world. As a result, the properties become an asset on-demand which can be accessed from anywhere at any time and basically at any capacity needed shifting the objects’ value towards Airbnb.

In the same matter, on-demand assets are gaining importance in the logistics sector. In a world of internet orders and same day delivery of single pieces, e-commerce companies require more and more flexibility from logistics players. So being able to access the transportation assets like trucks or drones gets way more important that owning them which leads to a shift in value. Now, the main value lies with asset-free broker platforms that bring together customers demanding quick delivery of small orders and the owners of transport space.

Where will your business head to?

On-demand is a major customer requirement many companies struggle to fulfill. Many manufacturers are still looking for an approach to integrate digital features in physical products. Insurers are still unsure how and to which extent they can use customer data for insurances on-demand. And the logistics industry is still caught in their existing web of customers, forwarders, transport companies, and distributors.

But no matter which sector your company is in, distinguishing between feature on-demand, service on-demand, and asset on-demand helps to unlock new business potentials. Ultimately, the three dimensions provide you with a better understanding for future business models depending on your focus: physical products, services or assets.

Authors Dr. Philipp Bodenbenner, Malte Mertes, Barbara Töpner (ehem. Detecon)