We spoke with Artem Serbovka, CTO and Co-Founder at Whizz, who explained that managing a business offering physical product subscriptions, such as their service for electric bike rentals, requires a sophisticated approach. This approach differs fundamentally from typical digital subscription or direct sales models.

Whizz has observed that the success of digital subscriptions in music and video streaming has paved the way for expanding subscription models into physical goods. This trend has seen substantial growth in recent years. In their domain, the business process extends beyond a single sale, involving a cyclical pattern of customer engagement, rental agreements, and recurring billing, akin to platforms like Netflix. This paradigm shift is largely driven by the consumers’ preference for convenience, flexibility, and access to a range of products without the burden of ownership. Artem’s team has experienced that this complexity is magnified when dealing with physical products that require continuous circulation, including rental, return, and maintenance cycles.

Their services require effective logistics and a focus on customer experience, sustainability, and adaptability to changing consumer needs. Addressing these unique business needs requires an advanced and comprehensive management system that goes beyond mere subscription handling to encompass the entire operational life cycle of the service, from customer interaction and inventory management to maintenance scheduling and financial processing.

Initial system integration challenges

In the early stages of Whizz’s journey into the electric bike subscription business, they faced a myriad of complex business processes that demanded a sophisticated management approach. These challenges reflect a broader market trend, where businesses increasingly recognize the need for specialized solutions to manage physical product subscriptions effectively. Initially, they attempted to piece together a solution using various off-the-shelf products, each intended to handle specific tasks: payment module, inventory management, CRM module, analytics block, debt collection module, IoT solutions, loyalty program module.

This fragmented approach led to significant inefficiencies for the team. Each system, while effective in its own right, only solved part of the puzzle. They often reach a dead end when connecting these solutions into a logical workflow. This issue is not unique to Whizz but is common among businesses venturing into physical subscription services, as standard solutions often lack the flexibility and comprehensiveness required for such models. It became increasingly clear that this piecemeal approach was not just inadequate for this rental model – it was fundamentally unsuited for the subscription-based nature of their business. The growing complexity of consumer needs and the shift towards more sustainable, service-based consumption models have made it imperative for companies to develop bespoke systems that can handle these multifaceted requirements. This realization was the catalyst for Artem and his team to develop their bespoke system, designed to holistically manage the unique and intricate processes of their electric bike subscription service.

Custom-built system development: A detailed insight

Confronted with the multifaceted demands of its electric bike subscription service, Artem and his team have taken a tailored approach to its operational infrastructure. They’ve constructed a custom-built system intricately designed to address the nuanced aspects of their business. This system isn’t just a patchwork of tools but a cohesive suite of modules at a specific company, each diligently crafted to fulfill a specific function within its business model. From managing customer interactions to overseeing the lifecycle of its bikes, each module plays a pivotal role. This approach ensures the company’s smooth running of day-to-day operations and aligns with its long-term strategic goals. Integrating these modules forms the backbone of their operational efficiency, enabling them to meet the dynamic needs of their subscription service with precision and agility.

• Payment module: This module is engineered to handle the intricacies of recurring transactions and subscription fees. It ensures timely and accurate billing while providing flexibility for variable payment schedules, a key aspect of subscription services
• Inventory management: A crucial component, it effectively manages the statuses of the products. This includes tracking their movements across different locations and ensuring timely maintenance and repairs. The module’s efficiency is pivotal in managing the constant rotation of bikes, from servicing to being back in customers’ hands
• CRM module: Central to customer interaction, this module manages customer profiles, transaction histories, and service requests. It’s designed to provide a seamless and responsive customer experience, from initial contact to ongoing service
• Analytics block: Utilizing powerful servers, this module is responsible for processing large volumes of data. It provides insightful analytics that guide business decisions, from operational adjustments to strategic planning
• Debt collection module: Focused on financial security and recovery, this module is vital in maintaining the business’s fiscal health. It helps manage overdue payments and addresses financial risks associated with subscription services
• Integrations: This facet of the system includes a range of integrations, from GPS services for bike tracking to marketing tools for lead generation and management. These integrations enhance operational efficiency and customer engagement
• IoT solutions: Implementing cutting-edge IoT technology, this module includes bike tracking, remote control capabilities, and enhanced security systems. It’s instrumental in managing the fleet and ensuring the safety and reliability of our service
• Loyalty program module: A module that enriches customer engagement, featuring promotional codes, referral programs, and bonus accounts. It’s tailored to enhance customer loyalty and encourage long-term relationships

A key aspect of Whizz’s system is client-side subscription management, which is accessible through web and mobile applications. This part of the system leverages cross-platform development solutions, ensuring a seamless and user-friendly experience for their customers.

Impact and achievements

Developing this custom system was a colossal endeavor, demanding over 700,000 lines of code, 30,000 hours of development, and a dedicated team of 10 engineers. The results, however, speak for themselves: a 35% reduction in operational costs, rapid deployment of new locations within a week, and efficient management of thousands of electric bikes. Whizz’s decisions are now fully data-driven, leading to their fleet’s impressive 90% utilization rate. This bespoke system underscores its commitment to overcoming industry-specific challenges through technological innovation, setting new standards in the physical subscription service market.

Featured image credit: Freepik.

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• Source: https://dataconomy.com/2023/12/15/system-engineering-in-physical-subscription-services-insights-and-innovations/