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Date: 2024-03-28 Page is: DBtxt001.php txt00009328 |
Megatrends |
Burgess COMMENTARY |
Digital continues its journey of discovery In October last year, the UK newspaper and magazine wholesaler Smiths News launched a same-day collection service jointly with Amazon. The story got little coverage in the mainstream press. But if you spotted it, you’ll know the service is called ‘Pass my Parcel’. The idea is to exploit what was - previously - un-utilised spare capacity in Smiths News’ vans. By doing so, this new service enables Amazon Prime members to order items in the morning and then pick them up in the afternoon from any one of over 500 independent retail outlets. In my view, this is an example that underlines the dramatic emergence of new business models, and in particular of the sharing economy, heralding a future where an empty cubic meter of space in a lorry driving from London to Leeds could be auctioned on eBay.
The sharing economy is about “sharing” of a number of things, such as labour or assets. As services such as Uber have demonstrated, valuable but previously inaccessible capacity of many kinds can now be parcelled up, advertised, auctioned and sold using digital platforms. This is because the spare asset can now be digitally tagged at a very granular level, even down to an empty cube meter of space in a delivery van. The effect is often to enable outcomes – such as getting a parcel or a person from A to B at a lower cost. By way of example, consider the lorry fleet of a hub-and-spoke business, such as a network of motor repair garages. The company’s lorries will generally travel out from the distribution centre 90% full and travel back empty – meaning that on average they use only 45% of their capacity. Technology can now provide a means to monetise this spare space: precisely the type of opportunity that Smiths News has seized with ‘Pass my Parcel’. And such examples of sharing economy are being mirrored by a parallel advance towards enabling and (when possible) delivering outcomes: consider how customers can now share their own behavioural and consumption data with online providers to visualise, gamify and achieve a personal goal, be it to learn about classical music or get fitter. Providers of a vast array of goods and services are now using a digital return path and two-way interactivity to share data and analytics with consumers, and support them in pursuing whatever personal objective they’re looking to achieve. An obvious example is the way connected Fitbit products allow people to track their fitness performance. And there are many others: by sharing data with Amazon on what and how they read, and personal reading and learning goals, consumers can experience a video game-type visualisation of their progress. This trend has much farther to run. And there is more. The digital age is making it possible to create value on different levels. Take for example books. The first level was to sell a book in a bookstore; the second was to sell a book from a postal catalogue; then came websites like Amazon selling books online; followed by the eBook that could be read on an eReader, providing a user experience that was more convenient but otherwise little different from that with the physical product. In summary the digital age is making new business models possible that create value by making the sharing economy a reality and by enabling outcomes rather than just selling products and/or services. The megatrends and emerging business models based on the sharing economy and/or outcome-based value creation have already driven rapid advances in digital services. But in my view, the real revolution is only just beginning. Welcome to the next phase of the digital economy. Carlo Gagliardi | Partner and Co-Lead of the Digital Practice Profile | Email | +44 (0)20 7213 5659 2532 Peter Burgess Comment An excellent little piece of information, another piece in what is becoming a very exciting theme. There is no question that digital has the potential to be a game-changer, but what game is going to be changed is still very much up for grabs. For the past 40 years or so, the early implementation of digital technology has enabled amazing improvements in productivity, but for reasons that are not easy to explain all of the resulting wealth gain has accrued to owners in the economy and rather little if any at all to workers in the economy. This is problematic and unsustainable. Worse, a whole segment of digital technology is funded by the advertising model which in turn has the singular goal of getting more and more stuff sold and consumed, no matter what the impact on people and planet. The potential for digital technology to be used to inform the public in a responsible manner about what is good and bad in the flow of commerce is still born ... and all likelihood celebrated in some (but not all) C-suites. |
By Carlo Gagliardi
25 February 2015 |
The text being discussed is available at http://pwc.blogs.com/megatrend_matters/2015/02/digital-continues-its-journey.html and |
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