In our latest ‘In Focus’ report, we look at the changing way we shop, the impact it’s having on B2B buyers and what it means for services businesses of the future.
Whilst traditionally we may have regarded B2B firms as fundamentally different from their B2C counterparts, increasingly the two worlds are converging. If I look back at our services investments over the last 20 years, the expectations of customers are ever increasing: an easy to use platform, global access and total flexibility in consumption, all at the same time as better value for money.
Susie Stanford looks at how consumers see the world as increasingly rentable. As big-ticket items become unattainable or undesirable, platforms are helping to fill the void. She argues that this impact is now felt across services businesses – if someone expects total convenience in their personal purchasing decisions, why not at work?
Businesses themselves are moving towards on-demand models with how they operate. Cloud-based IT services, which are scalable, are an obvious example of where this has happened, but also in hiring, with more businesses recruiting specialist skills on an as-needed basis.
James Titmuss considers the impact this will have as businesses look to rent where they might have once invested in their own assets. It is beneficial to be asset-light, improving the agility of businesses and reducing the need for substantial capital investment upfront. However, it also means that margins must be justified in a different way.
We’ve seen that justification in the value add of convenience, often a tech platform, and superior customer service – offering buyers something bespoke they wouldn’t be able to deliver themselves. A good example of this is our investee, Carousel Logistics, a logistics provider that doesn’t own its entire fleet of trucks, ships and planes – but through its tech platform, Gateway, its clients can build bespoke supply chain solutions for their transportation needs across Europe. This renting model also allows Carousel, and in turn its clients, to flex up or flex down services as required.
This has been one of the most significant transformations we’ve seen in the services sector in recent years – the adoption of inventive tech platforms, like Gateway, that treat B2B buyers as consumers in how they shop for services. By prioritising the level of service rather than assets, businesses can also grow faster than their traditional asset-heavy competitors. From an investor’s viewpoint it is little wonder that businesses which are disrupting in often quite traditional markets and driving higher rates of acquisition and brand loyalty through their service offering, are incredibly attractive and exciting.