Michelin in the digital age
With online sales, the development of apps, big data, connected tires, route planning, community management and the acquisition of start-ups, Michelin has set out to offer everyone a better way forward and is strengthening its positions via an extensive digital transformation plan.
In the 1990s, the rollout of Internet to the general public marked a turning point socially, culturally and economically. It is still too early to estimate all the consequences of this transformation, but what is striking 20 years on is the weight of the players in this new economy and the extent of paperless exchanges. E-commerce, the Internet of things and cloud computing have changed our lives. In 2020, half of the world's population will be able to access the Internet via a smart phone and 20 billion objects will be connected. This rapid and massive digitalization marks the opening of a new age for brands. It is an incredible opportunity for companies to harness customer usage by connecting products, aimed at better meeting customer requirements and innovation.
Michelin has been developing initiatives in this field for the past 15 years, including the creation of Web service platforms for auto service centers and garages (YepGarage.com), the launch of general public marketplaces (Buscollantas) and direct online sales (Michelin Pilot Sport 4 tires), in addition to acquisitions, equity holdings and investments in pure players such as:
There is no question of allowing ourselves to be short-circuited by new Internet players that could potentially come between Michelin and its customers. To keep control, we have made acquisitions.
Michelin in competition with the new Internet players? This is not fanciful, bearing in mind that although only 13% of tires sales are currently made online, five years ago, this figure stood at just 2 or 3%! These days, 80% of people purchasing tires in physical sales outlets are first seeking information from a website.
Access to the market is a key issue, but not the only issue. E-business also drives growth. Offers such as MICHELIN® Tire CareTM, or those developed by MICHELIN® solutions, improve the availability of fleets whilst anticipating maintenance, thereby creating value. The takeover of Sascar, , the Brazilian leader in truck fleet management via the Internet, has directly enabled the Group to boost its sales in Brazil and, by extension, throughout the South American continent. To enhance services provided for fleets, we have invested in embedded telematics, electronics and cloud computing, to collect vehicle data in real time, analyze the performance of both vehicles and drivers and propose solutions that boost productivity and reduce fuel consumption. In short, offering improved mobility…
Links with customers
Digitalization has transformed our experience of goods and services. On the one hand, offers have become customized, based on in-depth knowledge of customer expectations. On the other, customers are increasingly demanding, as they can instantly compare a range of offers. The ViaMichelin website launched in 2001 calculates nearly 800 million routes each year and the range of services on offer has expanded! ViaMichelin now supplies information on hotels and restaurants. The Michelin Restaurants app is even available on television, thanks to Apple TV. The Group recently acquired the companies Restaurantes.com (the Spanish leader in online restaurant bookings with over 700,000 tables booked in 2015) and Bookatable (based in London and the European leader in restaurant bookings), as well as investing in Luli Information Technology (a Chinese car sharing platform). What do they all have in common? They are all concerned with customer relations: proposing an experience, in this case mobility, to maintain a link with people who only change tires every two or three years. This is the same approach which, back in 1900, governed the launch of the Michelin guide; the Routes Office in 1908, maps in 1910 and the green guides in 1926. What is true today was already true in the past.
3D metal printing
Digitalization is not only synonymous with services. Michelin is first and foremost a manufacturer, among the most innovative in its sector and its research into biomaterials, together with its expertise in advanced technological processes, explain the difference between its products and those of its competitors. To take this a step further, engineers at the Ladoux Technology Center decided to join up with the Fives industrial engineering group to create a joint company named Fives Michelin Additive Solutions, which manufactures and sells new-generation 3-D metal printers, under the AddUp name, for use in the automobile, aeronautics and healthcare sectors.
Last but not least, the expansion of new, digital collaborative tools has also changed the way we work. Thanks to our internal social network, Bibspace, nearly 600 active communities exchange their ideas every day, placing Michelin at the cutting edge of corporate social networks.
We can never over-emphasize the importance of corporate culture in such a transformation. Sharing the same purpose, the same mission and the same values are the key benchmarks for our staff. The biggest challenge facing us today is not technical. Successful digital transformation is a transformation that simplifies operating methods, empowers staff and strengthens everyone's commitment to serving our customers.
> True to its Purpose, Michelin offers mobility assistance services in addition to its products and has launched a wide range of digital projects since the beginning of the 2000s.
> Methods of governance have been introduced to accompany digital transformation in optimal conditions. The key challenge here is not technical, but rather our mindset.
> In addition to its partnerships, Michelin has acquired pure players that will help it accelerate its transformation. This acquisition strategy is set to continue.