Covid is Accelerating Rentals Digital Uptake
Published October 22. 2020
A few days ago, Trackunit, together with Renta and Rentuu - two growing names in the European construction equipment rental market - sat down with , to discuss the subject of ‘Digitalisation in Rental’ during a virtual panel session.
An early outcome from the effects of the pandemic was the number of business processes which were quickly driven online. The rising use of video conferencing in place of travel and face-to-face meetings is an obvious and widespread example; in construction we’ve joined many other sectors experiencing the benefits of digital transformation.
Change is Everywhere
To further illustrate the transformation we are all managing, Digitalisation in Rental is IRN’s first-ever webinar, conceived as a response to the Covid-19 lockdown. In total, over 700 IRN readers registered an interest in attending, demonstrating the subject’s relevance across construction and our new-found devotion to digital feeds.
The conversation was wide-ranging, and I’d recommend viewing the video on – it’s very well worth a visit. However, I wanted to highlight a few of the discussion points which I think are particularly relevant to conversations many of us are having with suppliers and customers at this time.
Until recently, construction market research highlighted that most organizations’ investment in digitalization - between 60-70% - was focused on backend systems, providing management reporting data. However, most commentators agree that digital transformation investment as an exercise in cost cutting is unlikely to deliver value. Such programs should focus instead on creating better end-customer outcomes to improve their experience or service.
A Shift in Mindset
Firstly, each member of the IRN panel has witnessed a wider mindset shift by OEMs, technology providers, rental companies and customers, towards the benefits of capturing increased volumes of machine and use data.
This shift was already partially in motion pre-Covid, but the speed of change has accelerated in 2020 - with economic uncertainty, customers want more defined data to help inform their decision-making.
Joel Särkä, CIO of Renta - a full-service construction machinery and equipment rental company serving the Baltic region - commented that by virtue of its nature and composition, there had been very little pressure on the sector to digitalize until recently. However, he’s aware that many global players are now taking digital transformation very seriously and starting to realize its benefits; “…but these are long term projects,” he said, speaking of the acceleration induced by the pandemic.
Andrea Guzzoni, co-founder of Rentuu – a franchising company which is introducing the ‘Easy Hire’ concept to the equipment rental market - has had hundreds of conversations with rental companies across Europe. He was clear that high on their priorities is ‘trust’; in the supplier, the system and the service. Alongside this is a definite requirement for value and capability to introduce options such as pricing transparency.
Data shared more widely will enable future capabilities for rental systems to monitor pricing across time and local markets, allowing rental companies to develop new business models in price sensitive environments.
Trends Indicate an Uptick in Transformation
At Trackunit we are seeing an increase in adoption of our products during the pandemic. This indicates use of the systems extending deeper into customer organizations; in addition to the usual fleet managers and technicians, different user profiles have appeared, including finance, drivers and senior management.
The digitalization of processes is demonstrating results and gaining weight with top level management as data provides results in real time.
All of the panel agreed that the pandemic has shown how quickly people and organizations adapt. As organizations and customers realize the benefits of digitalization, whether that is Zoom meetings, online ordering, dynamic pricing, or device-based service checks, this deeper digital awareness allows customers to demand more from the market and growth can accelerate.
Thomas Allen, editor of IRN, referred to the effect the pandemic has on implementing digitalization and questioned whether it induced a slump in IT spending. History informs us that in times of economic insecurity and downturn, technology is often the lever used to restart growth in a market - all three of us sharing the panel were able to quote examples of this. And we were in agreement that there is increased interest and investment in the digitalization of the industry. Customers are taking a more strategic view of projects and there is greater understanding of the timescales involved in digital transformation.
Pandemic Opens the Door to New Talent
Upheaval across many markets has created the opportunity to attract new talent. As previous industry hurdles are removed, wider conversations are happening across the ecosystem and these are enabling new entrants and new business models. Construction is an open opportunity for technology development, which helps attract new talent from outside our industry, offering different perspectives and new ideas, which help to shape the future.
How can OEMs support Digital Transformation across the Ecosystem?
One of the webinar delegates asked the panel what additional support the manufacturers could provide to increase customer experience in the digital arena - it’s a good question. Over the last three or four years manufacturers have taken it upon themselves to provide better access to more meaningful data to the rental community. I think the OEMs are on the right path, but it would be good to see them go even further.
Gone are the days when a new machine is launched into the marketplace without a robust, stabilized API with a harmonized way of looking at data.
Today, ISO feed data implementation differs for each manufacturer, making it difficult for companies like Renta and Rentuu to leverage the ecosystem. To be able to deliver optimal customer experiences, this will need to change. We're observing initial conversations between OEMs and customers already, but I expect manufacturers to step up their efforts before we can experience real impact.
The next chapter of Eliminate Downtime seeks to bring about this much needed change in data transparency and standards - to stay up to date with developments in data, technology and digitalization.