In last week’s episode, we highlighted the Japan Airlines experiment of providing rented clothes to tourists. Today, we look at the business models underlying that experiment, and what our businesses should be thinking about in relation to ESG, SaaS and Platform Plays.
TRANSCRIPT
Hi there and welcome to ThrowForward Thursday. My name’s Graeme Codrington, and every week we jump into the future and see what’s going on there, and every other week, we dig into the business implications of what we’ve seen.
So, last week, I hope you had a chance to have a look at last week’s lesson about the future. And it was about the very near future because, in the next month or two, Japan Airlines is going to start encouraging people who are coming on holiday or business to Japan to not bring any luggage with them at all. You’re not going to need clothes because you can rent your clothes in advance. Interesting.
So, what do we learn from this? I don’t know if this is going to work. I don’t know how confident people are going to be to get on an aeroplane with no clothes and arrive at the hotel and find a pile of clothes in roughly your size, in roughly your style, maybe acceptable. I think it’s going to be more holiday people who try this out, obviously, rather than business people who maybe need to be a little bit more specific about how they look.
But I think that there are two big implications here for us to consider. The first has got to do with one of the drivers of this particular venture or this particular experiment, and that is, of course, to do with ESG, environmental, social issues, and governance, around the way we use our environment. And in this environment, the direct thing is that the plane will be lighter. If a whole lot of people on the aeroplane are not bringing their own clothes and their own baggage, the plane will be lighter, it’ll use less fuel, and there’ll be less carbon emission. So that’s a fairly easy win.
The second, though, is the mindset around what is sometimes called the circular economy. I’m not sure that is the technically best description of what’s going on here, but there are a whole lot of mindsets here, and that is about buying local, recycling, reusing, and no wastage. Although it’s not a direct impact of this particular experiment, I think it at least locks into the mindset around that circular economy of saying to people, you can, in fact, live in a sharing economy where a number of different things could be shared. And of course, we understand that at one level, you can talk about Airbnb and Uber and so on, and you can do it more at an industry and infrastructure level where we can be sharing some quite big assets like our home and our car. But we can also share smaller things as well.
One of our clients, Husk Vana, have a sharing option for garden and construction tools. We’ve all got a hand drill that when we need to drill a hole in the wall, we’ve got a drill and you go into the shed and you pull it out and you dust it off because you use it once a year. Why should we all own one of them? Why can’t we just have a library for lawnmowers and ladders and hand drills and things like that? When we need them, we can go to a community center, we can go and get them, use them, and bring them back. And some people argue that’s not good for the economy because then we’re not buying all of these things, but of course, when we’re looking at the planet’s resources, having those reusable assets is probably a very good thing.
So, there’s a conversation to be had, and you and your team, you and your business, need to have that conversation around how you can plug into and connect into that aspect of the ESG conversation. It’s something that consumers and customers are going to be demanding and are going to be interested in, in the future, and it’s certainly something that makes a big difference to the planet. So that’s the sharing economy, the ESG side of things.
The other big implication that I thought of as I saw the story and going to watch this experiment with interest over the next year or so is the concept of X as a service. So, we know what as a service is now. This is linked to the sharing economy, but it basically means you don’t buy something, you use it as a service. And your best example there is the software that we use where you don’t anymore buy the software and then you own it forever. You basically pay a monthly or an annual license fee to use the software, and it sits in the cloud and it gets updated whenever it needs to be updated. And you don’t really own it, you just lease its use. We’ve now moved into a world where you can pretty much have anything as a service. I’ve recently put solar panels onto my house, and I didn’t buy them, I had literally paid nothing to have the solar panels and the battery pack, and the inverters put in, but I pay a monthly fee to get solar power as a service to my house. So, you can pretty much do this with anything.
The underlying business model here is the model of platforms, or it’s called a platform play. And what this basically means is that you’re not just thinking about selling a product and service to people, but you’re thinking about creating a relationship with those customers and those consumers that will allow you to lease and to give products and services to the customer on an ongoing basis in a more lease type of environment. And if you really get it right, you own the relationship, and then you can actually put a number of things onto your platform, and a lot of companies that are thinking this way are expanding their reach quite dramatically, almost turning, whether it’s a bank or an insurance company or some other retailer, suddenly turns into a more lifestyle-based company where if you trust them to buy one product, you will also buy a whole lot of other products from them.
This mindset is really about extending your reach as a business and moving from just moving into the anything as a service model. So, in this example of Japan Airlines, it’s clothing as a service. Who would have thought? But I wonder if as you think of your business, what can you offer as a service? So, you’re busy selling what you’re selling to your customers at the moment. Could you turn it into a lease as a service environment? And once you go down that path, you’ll also open up the conversation of saying, is there a platform play available for you as you and your customers get closer together and they trust you in this environment?
So, Japan Airways, an airline company renting clothes because there’s a platform connection with the initial customer relationship that they’ve got. It’s a fascinating example, interesting insight, wonderful experiment, and maybe inspires you and your business to think a little bit more about what the future could look like for you. Maybe inspires you to have your own experiment with getting your products and services to your customers in a very different way from what you do now.
Welcome to the future, it’s always fun to think about it, isn’t it? Thanks for joining me, and if you would like further assistance in thinking like a futurist, don’t forget to just connect with me and this is what I do all day, every day, and would love to help you if you need assistance.
Otherwise, I’ll see you next week as we jump into the future once again.
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Graeme Codrington, is an internationally recognized futurist, specializing in the future of work. He helps organizations understand the forces that will shape our lives in the next ten years, and how we can respond in order to confidently stay ahead of change. Chat to us about booking Graeme to help you Re-Imagine and upgrade your thinking to identify the emerging opportunities in your industry.
For the past two decades, Graeme has worked with some of the world’s most recognized brands, travelling to over 80 countries in total, and speaking to around 100,000 people every year. He is the author of 5 best-selling books, and on faculty at 5 top global business schools.