Transforming Products into Services June 2017
Subscribe to Insights in Brief to be notified about new Featured Content as it becomes available!
A growing range of companies are offering customers curated sets of products, providing experience, surprise, and serendipity instead of mere access to goods. A team comprising researchers from Temple University (Philadelphia, Pennsylvania) and the University of Graz (Graz, Austria) claims that "box subscription companies are reinventing retail using personalization and artificial intelligence." Such companies offer subscription services in which customers receive a monthly delivery of curated products. In essence, the companies are creating novel services around third-party products. The researchers looked at several box-subscription companies, including BarkBox (Bark & Co; New York, New York), OwlCrate (Vancouver, Canada), and Trunk Club (Nordstrom; Seattle, Washington). According to the researchers, the delight of the unexpected and a "'Christmas every month' experience" are customer benefits of box-subscription services.
Start-up Relonch (Palo Alto, California) is trying to reinvent photography with a so-called camera-as-a-service model that enables users to buy photos instead of a camera. The company provides subscribers with a camera, and photos subscribers take with the camera automatically upload to the Relonch server for algorithm-based editing. The edited photos then transfer to the Relonch mobile app, and users pay $1 for each photo they want to keep. Meanwhile, IKEA (Delft, Netherlands) is adding service elements to its furniture products. The company is developing a range of hackable furniture items that users can modify to meet their needs and desires. Many IKEA customers already find and share ways to personalize the company's products via IKEAHackers (www.ikeahackers.net), but IKEA is not affiliated with this website.
Developments in technology are also creating new opportunities for the integration of services into products. Autonomous cars may one day enable vehicle occupants to take their focus off the road and indulge in services rather than pay attention to traffic. At the Consumer Technology Association's (Arlington, Virginia) 2017 Consumer Electronics Show, a number of companies presented concepts for personalized services that cater to the interests of vehicle occupants. These companies are attempting to create sources of recurring revenue by transforming cars into service platforms.