By Jonathan Hurvitz, CEO of Teljoy
At the height of the pandemic “flexible not unlike “agile” and “pivot”) became something of a buzz term thanks to a growing, almost universal, need to be, well, as flexible as possible in all aspects of business and life.
And now flexibility is making its appearance in relation to consumption: Flexible consumption models (FMC) refer to a form of personalisation and customisation at scale to meet the exact and nuanced needs of the contemporary customer.
The rental goods economy is essentially based on a flexible consumption model as it prioritises access over ownership, with a level of flexibility unattainable with the outright purchase of, for example, appliances, electronics and furniture.
The technology industry has been at the forefront of this trend for a while now, with the proliferation of software-as-a-service (SaaS) as a prime example. With SaaS, software is licensed and delivered to the user on a subscription basis, and is for the most part the preferred way to use software today. It’s a classic example of access over ownership, where flexibility in the way the product is consumed is paramount.
Some experts are suggesting that FCMs are the next big thing in the ongoing drive to offering customers exactly what they want at the exact point where they want it. It has the potential to take the subscription economy to new heights as the ultimate customer-first approach to retail. A Deloitte Insights report titled “The shift to flexible consumption” explains that traditional models are more product-centric while FCMs are customer-centric, calling for a shift in the retail business’s operating model if they are to embrace this trend.
It’s worth considering the benefits of FCMs to better understand why its adoption is a step in the right direction for those retailers concerned with their long-term survival. FCM pricing models allow for recurring revenue and improved customer retention through more relevant and flexible solutions.
The rental goods economy already trades on the fact that its business model allows it to offer customer flexibility, a level of customisation and, most importantly, an alternative to the traditional way of purchasing goods.
These trends all necessitate that we rethink our understanding of access, and that access need not mean ownership. Relevant, flexible and timeous solutions to real customer needs is at the heart of flexible consumption models.