Digital Travel US 2020

May 18 - 20, 2020

Palm Springs, CA

Hertz is Bouncing Back from Digital Disaster with a New Subscription Service



While digital transformation has incredible potential for business, the process does not always go smoothly. However, while things will go wrong, what's important is that brands bounce back from problems and push forward with new innovations.

In fact, failure is almost the default setting for any large-scale organizational change. It's thought that around 70% of digital transformations fail, which means that while businesses understand the need to evolve with digital technology and create new processes and solutions, putting it into action comes with certain challenges.

Massive brands have run into issues with digital transformation as well, meaning even the largest companies aren't immune to failure. GE, Ford, and Proctor & Gamble all struggled with implementation recently, and now car rental brand Hertz has joined them, having recently run into problems with its transformation partner, Accenture.

Hertz

The famous car rental company has found itself struggling over the last few years. Losing business ground to the new wave of ride-hailing applications such as Uber and Lift, the brand knew it had to transform its offering or continue to hemorrhage revenue at an alarming rate — stock prices fell by 85% over the last five years.

To achieve this, Hertz employed consultation giant Accenture to help it build a new website and smartphone app, and to completely revamp its online presence to help it compete in the new digitally focussed arena. However, the endeavor was marred by repeated delays and failures by Accenture, which saw the go-live date missed on several occasions.

Eventually, Hertz had to accept that the project was doomed and initiated legal proceedings against Accenture to reclaim its losses. The lawsuit is asking for the $32 million it has already paid in fees as well as more to cover the cost of fixing the problem.

"By that point, Hertz no longer had any confidence that Accenture was capable of completing the project, and Hertz terminated Accenture," said Hertz in the lawsuit. "Accenture never delivered a functional website or mobile app."

However, Hertz is not one to give up at the first sign of trouble and has recently launched a new service to help it compete against Uber et al.

Car Subscription

Noticing the huge rise in popularity in recent years of car leasing, Hertz wanted to find a way of claiming its own slice of the pie. The total number of leasing contracts at the end of June 2019 was 338,111 — a net increase of 35,699 in the same period last year. The volume of new contracts in the year July 2018 to June 2019 was 115,941 — up from 108,218 achieved during 2018.



(Image source: hertz.co.uk)

With this in mind, Hertz has launched My Hertz Weekend, a new monthly subscription service that is now available in the UK, France, Germany, Italy, and Spain. The idea behind the program is to provide a cost-effective alternative to ownership, specifically aimed at people who only really need the use of a car at the weekend. People who live in large metropolitan centers such as London often rely on public transport for their weekday commute and struggle to justify car ownership as a result.

The My Hertz Weekend subscription program costs around PS220 per month (PS275 in London) and provides customers with access to a quality Hertz vehicle from Thursday to Monday each week. The car can be collected from 14:00 on Thursday and must be returned by midday on the following Monday, making it ideal for those who like to get away for weekend breaks. The car can be collected from and returned to one of 50 European Hertz locations.

"Following the launch of My Hertz Weekend in Italy in May, we've had very positive feedback, which encouraged us to expand the service to more locations across Europe," said Vice President of Marketing for Hertz, Vincent Gillet. "A convenient alternative to car sharing and leasing, My Hertz Weekend responds to the current shift in attitude regarding car ownership as well as to the growth in the renting and subscription economy. We are confident that it will tackle the needs of customers who, for instance, live in a city and don't need a vehicle during the week."

To access the service, customers must be a member of Hertz's Gold Plus Reward's loyalty program which, for a monthly fee, provides unlimited mileage, theft protection, a collision damage waiver, taxes, and an additional driver allowance. As is standard with car rentals, vehicles must be returned with a full tank of fuel or the customer will face further charges.

Final Thoughts

Anyone who has been in business for any length of time will tell you that things don't always go smoothly. However, Hertz has demonstrated the importance of bouncing back and pushing on with innovation in the face of adversity.


You can hear Hertz's Vice President of Data and Analytics, Manish Agarwal, speak at Digital Travel 2020, taking place in May at the Hyatt Regency Indian Wells, CA.

Download the agenda today for more information and insights.



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