Emerging Business Models in a Platform

As brands, we’re in a sea of change. Not only are our consumer’s behaviors shifting, but the way we operate our business has massively changed as well. The way we make and ship products to customer service to marketing all have taken on new roles and new operations models to succeed in this new normal; where brands become platforms. 

The opportunity in this new platform marketplace is for a powerful brand to transform and truly give consumers a valuable experience.

As you can see in the image below (thanks iab), it’s not just one area of business that’s transforming. But all areas bringing the consumer and brand together in ways that have never been done before. And this is not only shifting the business case of brands becoming platforms and the role of media, but it’s creating new business and value models. Models that consumers are asking for and technology is enabling.


Top Three Emerging Business Models in a Platform World

Direct to Consumer
This model is the act of brands selling and fulfilling directly to the consumer rather than distributing to retail or service partners. It’s not a new model, but it’s emerging because of the technological advances in logistics, production and communications. There has never been an easier time for a company to produce, fulfill, ship and market a product than it is right now. 

The massive successes with this model like Casper, Warby Parker, Glossier has come from a combination of things. First, the ease of getting a quality product to market and in the hands of the consumer in the most effortless way. Second, the traditional industry they’re disrupting have long rested on their laurels of physical retail distribution which has created a massive markup on product through that supply chain. Allowing disruptors a lot of room to play in their pricing and profit models. Finally, e-commerce has opened the ability for consumers to shop when they want without being hassled with going to a physical retail store and dealing with a sales person. 

Subscription Commerce
One of the biggest challenges facing any company over the past several years is repurchase. To get a consumer to purchase your product once is hard enough, to get them to purchase it again just as hard. The ability to ease this repurchase or create a world where there is no direct purchase is where the subscription model comes in. Again, this isn’t necessarily a new business model, but, thanks to the transformations in the business environment, the ability to offer subscriptions easier has emerged even stronger. From CPG brands to auto we’re witnessing companies being extremely creative in how they build subscriptions in their industry. 

Companies like BirchBox, Dollar Shave Club, Amazon and even GM have been generating some good success in the subscription model. The ability to track usage, leverage inventory and partnerships and predict consumer demand, brands can generate new revenue and value streams through a new mindset. Whether it’s a selection of new products, removing the need to remember to buy detergent or subscribing to a vehicle versus owning it, this business model has many applications and opportunity for any company.   

On Demand
The consumer and human behavior of immediate gratification has exploded over the last few years. For physical products, the combination of the ‘gig economy’ along with the ease of transaction provided by mobile devices, we’re witnessing an entirely new way of doing business. For entertainment and digital products, the permeation of fast broadband and 4G devices has allowed for content to be accessed anywhere at anytime The companies emerging from this trends will only continue to get stronger as logistics trends continue to evolve and connection speeds increase. 

The companies succeeding with this business model are: for physical products: GrubHub, Postmates, Amazon, and Drizly; for digital products: Netflix, Amazon (again), and HBO. These companies have embraced the potential provided by these transformational trends to satisfy their consumer needs.

It’s something that should represent and fulfill your brand while continuously adding value to your consumer.

There is no right or wrong way to build a business model. It’s something that should represent and fulfill your brand while continuously adding value to your consumer. However, we do have to embrace the understanding that traditional business models may not work as effectively as possible. Too much has changed, is changing and will change in our business and consumer environment to expect what worked in the past to continue to work with the same efficacy. I encourage you to look at the trends that are happening around your brand and your consumer and see if your business model is truly maximized for success. The opportunity in this new platform marketplace is for a powerful brand to transform and truly give consumers a valuable experience. That’s the future of the business model. 


Want to talk more?