AH.nl vs. Car2Go Group 17 Technology of the Week
Time slot deliveries at AH.nl and the car rental company Car2Go show us two business model innovations that involve consumer choices on best price or best product fit. These innovations are a form of B2C E-Commerce because the transactions are digitally enabled. By using the article ‘Consumer Informedness and Firm Information Strategy’ we are able to describe how IT can help these firms to use the information gathered to provide better offerings.
Consumer Informedness and Firm Information Strategy
The definition of consumer informedness, according to Clemons (2008), is ‘the degree to which they know what is available in the marketplace, with precisely which attributes and at precisely what price’. In consumer informedness two different kinds of behavior are observed. First, trading down behavior. This means that consumers focus on price, specifically on getting a product for the lowest price possible. And second, trading out behavior, where consumers do not focus on price, but rather on finding a product that best fits their needs.
Next to these two kinds of behavior, consumers can be classified into two different segments: commodity and differentiated. Consumers who have a focus on price and are also more price-sensitive can be placed in the commodity segment, whereas consumers focusing on product value and having lower price sensitivity can be placed in the differentiated segment.
AH.nl, launched in 2001, is the E-Commerce platform of Albert Heijn, Etos and Gall&Gall. Consumers can go online to shop their groceries and then pick the delivery timeslot they prefer. For different timeslots the company charges different amounts of money and thus leaves the consumer with a choice.
Car2Go, founded in 2008, is a car rental company that does not have a centralized rental office. Members of Car2Go can easily open up a Smart by using the member-card and drive away with it. In the Car2Go application customers can see where the cars are parked and available for a drive. Customers pay for the car by the minute.
Comparison Article of Li et al. and the two business model innovations
At AH.nl we can see both a trading down and trading out aspect. Does the customer wants the cheapest delivery yet not convenience in time (trading down), or does the customer wants the highest convenience but than they will pay more (trading out).
At Car2Go it is different because they sell one type of service, which you could compare with regular car ownership. Driving around in a Car2Go for a short period of time is cheaper and convenient. Looking at mid-range and long-range drives, then a Car2Go is quite expensive. Here the convenience comes with a high price.
Both technologies are however fantastic contributions to making men’s life much more convenient than it was. In a time era where consumers want things fast and want to have a choice, these two solutions both service the consumer like never before.