Next step in the vertical world
Specialized digital services are growing strong, but new user needs and behaviours are bringing new business models. Therese Ahlström Brodowsky, CEO of the car vertical Bytbil, looks into new possibilities in the niche market.
Where do you turn when you are considering a purchase of some kind? In general, any advertising space will probably suffice when you’re browsing for a baby stroller, a chest of drawers or a canoe. But when you are contemplating a major investment, say a house or a new car, you will probably be better off using a service specialising in that specific area.
Not least because in a rapidly changing business environment you will need the best advice available regarding which kind of ownership and financing model suits you besst. Let me explain:
Not too long ago, I used to rummage through the classifieds in the paper in a never ending search for homes, cars, travels etc. Mostly I wasn’t looking for anything in particular, rather just daydreaming about the house I could picture myself living in, the car I wanted to drive or the next holiday I wanted to go on.
A bygone era
Today those classifieds are but a fading remnant of a bygone era. One of the first victims of the digital revolution, the classified paper ads soon found themselves replaced by cleverly packaged internet based solutions. All of a sudden, buyers could search countrywide for houses, cars, travels, etc., browsing through pictures and dive deep into data and history.
Yet the world moves on. With the millennials coming of age, not only the advertising but the whole business is going digital. In my area, traditional car dealerships are facing challenges from the internet-based brokers such as Beepi, Shift and Carspring, offering risk minimized end-to-end solutions.
By connecting sellers and buyers over the internet, the online players tend to all cumbersome activities surrounding the purchase process (inspections, paperwork, warranties and even delivery), all while minimizing overhead costs by ridding themselves of any need of showrooms and salespeople. No longer do you have to leave your sofa in order to buy a used car. Haggling with a man in a moustache and a polyester shirt in a car lot is a thing of the past.
Still, this entails you actually buying and owning a car, something which is no certainty anymore, as the modes of ownership transform and diversify.
Especially in urban environments everything from congested traffic to a lack of parking space drive a shift from personal to collective ownership, particularly where public transportation alternatives are available. Car sharing and rental solutions are gaining ground, appealing to people with occasional rather than daily transportation needs. Booking apps facilitate both accessibility and payment, whether it is a central car pool or a peer-to-peer based business model.
There are other ways of not owning a car. If you still want the unlimited accessibility of having your own car, but are less interested in the mundane hassle of services, repairs, insurance and similar paperwork, financial leasing might be an interesting alternative.
Having a leasing company actually owning the car, basically renting it to you long-term, is a way of lowering the risks of personal ownership. The lease package may include car service, insurance, warranties and other services at more or less fixed prices. When the lease expires, usually after 36 months, you simply return the car to the leasing company, without having to suffer the agonies often connected to trying to get it off your hands.
What we are seeing is a shift from the car as a personal asset and status symbol to the car as a commodity. The need for personal transportation has not lessened – the sales figures in the automotive industry have been steadily increasing over a long time – but the way we consume it is changing and diversifying. Not only does the digital revolution decrease the need for ownership, but technological advances such as self-driving cars may also be diminishing the actual sense of ownership. You will probably be less emotionally connected to your car as a passenger than as its driver.
Participation in such a dynamic marketplace requires agility and adaptability. Remaining simply an advertising site will not suffice. Instead, realising the potential as a connection between car consumers and service providers, regardless of the mode of ownership, will be crucial for survival and prosperity.
A variety of solutions
For a company like Bytbil, this entails being able to reach the car commodity consumers and being able to offer them a variety of solutions, be it the traditional ad network, leasing solutions or even car-pooling. As a specialist service provider, we need to face up to the ever-changing challenges, and possibilities, of the market.
Specialization requires a market complex enough to fund innovative business models. Just then the agility and adaptability offer a significant advantage above that of any generic actor. This is the key to be able to thrive and expand in a constantly changing environment.