Since the inception of the “Sharing Economy” by companies like Airbnb and Uber to the successful BlaBlaCar and Getaround (ex. Drivy) in Europe, sharing owned assets has become commonplace for many consumers. This trend is now making headway in B2B markets, particularly in the construction industry. Audrey Courant, Managing Director of Heavy Equipment in EMEA, explores the impact of the Shared Economy on the construction equipment industry. Don’t miss Part 2 of this series on Preparing Your Business for the B2B Sharing Economy in Construction.
The United States introduced one of the first successful marketplaces: Getable, offering to share idle equipment between contractors. Other online players then began to offer fleet owners – contractors, rental companies, dealers, or manufacturers – the ability to share underutilized equipment online. Kwipped or BigRentz in the US, as well as Tracktor and Klickrent in Europe, are just a few players in these growing marketplaces. Even manufacturers are starting to invest in these future models: Caterpillar invested in 2017 in Yard Club, and Yanmar in MakinaGetir in 2018.
Some of these companies like EquipmentShare and Getable have evolved their business model to support customers with their entire fleet management by providing smart job site and asset management solutions.
The value proposition of the Sharing Economy is simple and appealing – online marketplaces accelerate the search for rental equipment while providing a more expansive offering, with or without operators. The Sharing Economy allows fleet owners to increase profitability by increasing the utilization of their equipment and reducing idle fleet. Owners access a wider end-market, save on marketing and promotional costs, and receive guaranteed payment terms.
In addition, the current crisis linked to COVID-19 has already triggered an acceleration of digitization in the heavy equipment market. During the lock-downs everywhere around the globe, companies’ staff had to work remotely, and developed communication via digital solutions for both internal meetings and commercial interactions. In the heavy equipment industry, which is typically not the most advanced in connectivity and digitization, this was the occasion to prove the efficiency of digitization tools. This effect, coupled with the new sanitary and distancing rules, will for sure accelerate the adoption of non-physical ways to do business.
Construction companies are now, more than ever, open to connect digitally with their suppliers (both OEMs, distributors and rental companies): from gathering information on machines via customer portals, signing rental contracts digitally, to e-invoicing. DuckerFrontier believes this will be an accelerator to the deployment of marketplaces.
As marketplaces continue to emerge and grow, stakeholders in the construction equipment market and intermediaries of the value chain should be aware of how their business model could be impacted:
DuckerFrontier’s Heavy Equipment team is at the forefront of key trends impacting the industry. Our experts are constantly monitoring changes in the industry to provide clients with the most impactful insights. How can we help you deliver better outcomes for your business? Contact us to connect with an industry expert and keep an eye out for Part 2 on Preparing Your Business for the B2B Sharing Economy in Construction.