3. 3
Background
• Fork Lift Trucks aren’t sexy but the global
market is worth around $30 billion a year so
the prizes are big
• It’s a mature market with limited product
differentiation
• It’s brutally competitive
• Performance standards and Customer
satisfaction levels are unbelievably high
• Service rather than product is increasingly
the differentiator
• Acquisition and usage pattern methods
haven’t changed for a number of years
4. 4
What prompted the idea/innovation?
• Background
• Framing the idea
• Developing the idea
• Concerns over the development and introduction of
the concept
• Challenges experienced
• Tactical product extension Vs strategic change to
the “brand” proposition
5. 5
Becoming a Disruptor Brand
The Established Market
The Business Challenge
Redefining short term rental
• Trucks acquired through 3 or 5 year
lease agreements or purchased
outright
• Additional needs met through short
term weekly rental agreements
• Standard invoicing terms - monthly in
arrears
• Fixed charges regardless of
utilisation levels
• A large used truck park
• Relatively long lead times for short
term rental
• Introduce a more flexible business model
to meet the changing needs of the
market
• Create a new market and align the brand
with it
• Ensure the new proposition wouldn’t
cannibalise existing revenue streams
• Introduce new technology (Telematics)
• Develop alternative charging models
• De risking (Could you expand on this)
• Change internal mind sets?
• Being part of a global group
headquartered in Germany
6. 6
The Information Challenge
• Scale and nature of the short term
rental market
• Criticality of current hire and charging
models
• Was there an appetite for an
alternative approach
• Key drivers of short term rental
• Changing demand patterns
• Channels used to source and book
trucks
• Acceptability of current lead times
• Features and functionality expected
from short term rental trucks
• Establishing a price point
• Jungheinrich at the prototype and test
phase
7. 7
What is Design Thinking?
“Design Thinking is a methodology used
to solve complex problems, and find
desirable solutions for clients. A design
mind-set is not problem-focused, it’s
solution focused and action oriented
towards creating a preferred future.
Design Thinking draws upon logic,
imagination, intuition, and systemic
reasoning, to explore possibilities of what
could be - and to create desired
outcomes that benefit the end user.”
Inspired Rooted Progressive
9. 9
Understanding the Challenges
The component parts
Technology
(Feasibility)
Market
(Desirability)
Commercial
(Viability)
• Telematics & remote
access
• Driver Profile
• Online Payment systems
• Online order placement
• Price Point
• Delivery times & costs
• Risk
• Delivery hubs
• Appeal of current
charging methods
• Booking Channels
(Manufacturers/dealers)
• Uncertain Demand
10. 10
Scope of Research Programme
• 300 interviews with the person
responsible for Fork Lift Trucks in
organisations that used trucks on a
short term rental basis
• Mixed Methodology: online and
telephone interviews
• Van Westendorp price sensitivity
testing
11. 11 :
Do you agree with any of the following statements about the options currently available to you for hiring short term rental trucks
in general? (Total)
The traditional “9-5” approach of short term rental
looks to be out of sync with todays 24-7 demand
patterns and quicker delivery of hired trucks is a
market requirement.
• It looks as though the short term rental
market has failed to evolve to meet the
changing needs of the market
• A quarter feel that the truck rental
market is out-dated compared to other
rental markets
• The faster pace of operations and
demand patterns are putting pressure
on lead times for rental trucks
21%
21%
25%
51%
61%
None of the above, the options currently available
always meet my requirements
The payment options aren't flexible enough to best
meet my requirements
The options currently available are mostly outdated
compared to other rental markets
I could benefit from quicker delivery of hired
forklifts
The 9-5 approach of most truck rental services is
out of sync with today's 24-7 demand
12. 12 :
How interested would you be in a short term rental system that charged for truck usage according to the number of hours it was used, based on
data from a telematics system, rather than a fixed term agreement?
Would you prefer a system that offered? (Total)
65%
35%
A lower hourly rate if
you agreed to take a
minimum number of
rental hours
A higher hourly rate
that was fixed
regardless of the
number of hours used.
There’s significant interest in a system that charged
according to the number of hours used but the majority
would prefer a rate based around minimum hours taken.
• There is a high level of interest and
acceptance in using a system based on
data from telematics systems
• Hiring by the hour would enjoy strong
levels of support in the market
• Given the “newness” of these
propositions levels of interest and
support are very high
24%
38%
38%
Not interested
Moderately
Interested
Extremely
interested
13. 13 :
If you were looking to hire a counterbalance truck on an hourly basis for a minimum of 600 hours at what price would you consider the truck hire:
£4 £5 £6 £7 £8 £9 £10
Too Cheap Not Expensive Not Bargain Too Expensive
Resistance
point
Max
Optimum
Receptivity
point
Min optimum
The Price Point Challenge
800
hours
600
hours
14. 14
Key take Outs - Positives
• Market - Desirable
• Current acquisition patterns
are dated
• There’s appeal in daily
rather than weekly hire
• A new model to suite agile,
fast moving businesses.
• There’s disappointment in
delivery times
• Commercial - Viable
• “Power buy the hour” is an
alternative to traditional
acquisition models
• Manufacturers are the key
channel for short term
rental
• The importance of
traditional “hire channels”
could act as a barrier to
new entrants
• Cost is important but it is
one of four key drivers
• Demand levels seem
stable
• Technical - Feasible
• Telematics data is acceptable
and trusted
• Current channels to market
are important
15. 15
Key Take outs - Challenges
• Market - Desirable
• Changing mind sets from
weekly to daily hire could
be challenging.
• It’s conservative market
• There’s a strong preference
for being invoiced monthly
in arrears
• Commercial - Viable
• 50 – 80% of sites with
more than 3 trucks don’t
use short term rental
• Expectations around hourly
charge out rates might be
difficult to achieve – price
sensitivity
• Potential for
cannibalisation? If short
term hire really grows
could it impact traditional
contracts?
• Technical - Feasible
• Traditional hire channels might
be expensive to maintain and
could impact margin
• Expectations around charge
levels for immediate delivery
might not make sense
commercially
16. 16
Taking the Proposition to Market
Emotional Innovation
Brands
Relationships
Marketing
Functional
Innovation
Process
Innovation
• The redefinition of
short term rental
• Repositioning the
brand
• Developing a new
Go To market
strategy
• Current acquisition methods
are dated and alternatives
based on new technology are
acceptable
• Positioning the proposition in
a conservative market
• Invoicing preferences and
new payment systems
• “Buy the hour” based on telematics
is acceptable
• “Owning” channels to market is a
traditional approach and a barrier to
entry
• “Aligning” pricing structure to
market expectations – Commitment
Vs Flexibility
17. 17
The journey so far
• Time taken to get this far.
• What we failed to anticipate (and what we got right)
• Curved balls
• The Price Point challenge
• Successes – customers already on board
• Driving market awareness and adoption
18. 18
Prototype and what next
• Educating sales teams
• Changing internal perceptions to drive commercial alignment
• Proof point of Jungheinrich’s innovation as a premium brand
• Launch of app for customers
• Retest and refine
• Global roll out
