Trends Impacting the Rental Industry
How can you prepare with your rental business?
The world is facing unprecedented technological change and there is a multitude of changes and trends in the rental market that will impact all aspects of the rental industry. Technology is continuously evolving and, for better or worse, is making progress toward ease, speed, and sophistication year after year. So how can you prepare with your rental business to survive in this ever-changing environment?
For the last fifty years or so, technology has advanced at an exceptional rate and that does not seem to be stopping or slowing down any time soon. There are many technology trends on the market today and future trends are continuously emerging. More than that though, technology has become the catalyst for the next phase of innovation and therefore rental companies can benefit strongly by exploring the possibilities of using emerging technologies and be ahead of their game.
Big data, Machine learning & Artificial Intelligence
Before we can elaborate how Machine Learning can be used it is essential to be clear on the definition of Machine Learning: “Machine Learning is the science of getting computers to learn and act like humans do, and improve their learning over time in autonomous fashion, by feeding them data and information in the form of observations and real-world interactions.”
Nowadays, rental equipment is loaded with all kinds of sensors to read out data. This data is already used in the day-to-day processes like GPS localizers, consumption information or to automatically generate a service call in case something breaks down. All these sensors are generating vast amounts of data that can easily be stored in the cloud. Via sophisticated algorithms that can be trained, Machine learning can be used to find new relationships between all this data. The most interesting addition to this way of working will be Artificial intelligence, allowing these algorithms to do the training and data analysis entirely by themselves. This way of data analysis can result in completely new and unexpected insights, allowing you to be more efficient and serve your customers from a new perspective.
Artificial Intelligence can also be used in a different way. Companies like Uber, Google and Apple have been using AI technology to create completely autonomous operating vehicles. Think of the use of AI in combination with self-driving and operating rental vehicles. This could open up a whole lot of new opportunities as currently many rental companies rent equipment together with an operator.
IoT & Predictive analysis
The Internet of Things (IoT) is generating a mass amount of data that could potentially revolutionize the rental market. By making use of IoT related data, organizations can work more efficiently, gain a better insight into their processes and can eventually become more profitable than ever before! IoT data becomes even more valuable in driving new business insights if combined with analytical tools. As mentioned previously, typically IoT data is being used operationally for GPS data, consumption or error messages.
However, this data could also be used predictively: to assure maintenance is done before a fault actually happens. By using data analysis companies can predict when equipment needs to be maintained, revolutionizing asset management. Typically, maintenance is driven by time or consumption. Rental companies follow the OEM`s maintenance schedules to assure their equipment is in optimal condition. But in the case that you are able to predict when equipment needs to be maintained it is also possible to save on unnecessary early maintenance, increase utilization rate and be more efficient.
Rental equipment is often used in remote and harsh locations like mines, forests or construction sites. When equipment breaks down, it can be very costly for both the rental as well as the renting company. To mitigate the risk of breakdowns, companies have large amounts of spare parts in stock to react quickly when something breaks down. Using IoT and predictive analysis rental companies can predict better when maintenance needs to happen, however, a breakdown can still occur without prior signs. Using the technology of 3D printing, rental companies could have access to an unlimited range of spare parts where they need them and when they need them. Envision the possibility to print out a spare part on-site when you need it, without having to order and ship it. At the moment not all materials can be printed, however, every expectation is that this will change in the near future. Besides minimizing the risk of breakdowns, it also creates new sales opportunities. Instead of just selling spare parts, you could also add the 3D models for sale to your catalog.
Blockchain, Cryptocurrency & Smart contracts
A brand-new technology that can revolutionize the way data is stored and shared is Blockchain technology: “Blockchain is a shared, distributed, decentralized and tokenized ledger that removes business friction by being independent of individual applications or participants. It allows untrusted parties to exchange commercial transactions.” In the rental space, information is often stored fragmented because of the many different information systems that are used. By using blockchain technology information about equipment and equipment-related information could be stored centrally and easily shared. Other OEM information that also could be of interest are purchase price, purchase date, warranty, recall information and equipment specs. Many rental companies are struggling to get a clear equipment life cycle view, and blockchain can potentially help achieving this goal.
Another Blockchain area which could be of interest for rental companies is the possibility to work with smart contracts. A smart contract will be a virtual rental agreement between the rental company and the customer. Via the blockchain a transaction can be made and verified and after the customer pays with cryptocurrency the transaction is completed. It’s even possible to arrange a digital interaction between several parties before the actual transaction is made.
Immersive Experience: Virtual and Augmented reality
Augmented reality (AR), virtual reality (VR) and mixed reality are changing the way that people perceive and interact with the digital (and real) world. This new technology has the potential to change the rental market in many ways. Augmented reality can be used to guide operators on how to use the equipment to improve overall safety. It could also be used to find the best applicable piece of equipment. If, for example, a customer wants to rent an aerial work platform, AR could help to determine the size of the needed equipment by projecting the equipment in the actual space. AR can also be used to interact entirely differently with your customers. A customer can set up a Microsft Teams call allowing a rental company employee to see exactly what the customer is viewing. AR can also be used to streamline your maintenance process, providing an engineer with all the necessary information during the work order process. With object recognition, guided maintenance, IoT information, and real-time information about your system, the engineer has all the tools he would need to be able to repair a piece of equipment as quickly as possible.
The prior examples of developments and trends are showing how technological disruption is changing the game for equipment rental and the rental industry in general. It is vital for rental companies to explore the use of these new technologies to stay ahead of their competition. Ultimately, rental companies that will be able to act upon these opportunities will achieve higher customer satisfaction, will be more successful, and ultimately become more profitable than non-adapting organizations.