This article will cover the various types of Value Propositions tailored to digital business models. 

Value Proposition is one of the sections of the popular Business Model Canvas tool.

Overview

This article covers the following:

(1) Types of Value Propositions

(2) Examples of Value Propositions

The best way to categorise Value Propositions within Digital Business Models is by vertical:

• eCommerce: search, selection and purchase of goods online and delivery to doorstep

• Content & Media: discovery and consumption of content and media online

• Search, Vertical Search, Insights: search and discovery of topics of interest online

• Social & Communication: communication via electronic means and different types of media

• Online Travel, Dining, Events, Attractions: search, discovery and purchase/reservation of hotel rooms, flights, food, restaurant bookings, etc online

• Asset Sharing & Service Intermediation: Sharing of assets (e.g. cars, homes) and/or intermediation of service provision (from transport to professional services) online

• FinTech: Financial services and technologies provided online

• EdTech: Educational content & services delivered online

• Digital Health Tech: Our coverage focusses on the digital provision of health care related services online

• Hardware/Software Tech Platforms: Underlying software & hardware technologies as well as digital consumer electronics

• Software-as-a-Service: Provision of software via online channels

That said, there a number of common themes though we encourage never to look at generic lists and be more specific like in the list above:

• Online instead of offline → pace of transactions + electronic consumption (content, media, inform)

• Search & discovery 

• Pace 

• Convenience

• Choice comparability

• Price comparisons

• Personalisation

• Delivery

Note that in this list we have been focussing on the main end-consumer-facing value propositions. In each of these verticals there can be additional supply, backend and intermediary value propositions that dont interact with the end consumer.

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Now let’s take a look at examples of Value Propositions. The best way to do so is - as always - by looking at concrete, vertical-specific examples.

eCommerce

Examples of digital businesses in the eCommerce vertical include Amazon, Etsy, Wayfair and thousands of others.

Value Proposition examples Amazon: 

• Search, selection and purchase of goods online and delivery to doorstep

• Low Prices:

  • Given sufficient scale there are considerable savings on prime real estate (shop) that can be passed on to the customer

  • Scale also leads to better bargaining leverage with inventory suppliers

• Fast Delivery:

  • A tremendous warehousing and fulfilment network down up to 1 hour deliveries on certain items in metropolitan locations

• Large Choice of products:

  • Most consumer goods categories from apparel to appliances

  • Powerful sales pages (and backend) with filters, navigation, etc

  • Also increasingly entering groceries and fresh foods (latter being higher margin categories)

  • Media is delivered via a digital infrastructure: Books, Movies, Music - this segment is actually falling under the Content & Media vertical

• Subscription offerings:

  • For groceries via Subscribe & Save

  • Kindle Unlimited for books, Audible for audiobooks, etc

  • Prime for a one-off delivery fee payment plus a slice of other offerings

• and more

Content & Media

Examples of digital businesses in the Content & Media vertical include Netflix, YouTube, Spotify, Medium, Apple News and many more:

Value Proposition examples Netflix:

• Discovery and consumption of content and media online

• Vast content selection

  • Netflix-exclusive content (created & owned by Netflix)

  • Ongoing addition of new content

• Convenience and mobility: ability to watch anywhere and on "any" device

• No ads: option to choose an ad-free pricing tier (default)

• On-demand consumption: Users can watch anytime unlike linear TV

• Ability to binge watch: All episodes of one season of a series become available at the same time

• Simple pricing: Using a flat fee (3 plans to choose from) with unlimited access, no tiers, no premium content at additional charges, no pay-on-demand (for now and potentially subject to change)

• Easy cancellation: Cancel (and resubscribe) at any time

• Personalisation: through a recommendation system that takes into account what each individual has watched and liked

• Localisation: subs & dubs for increasing amount of locations and more cultural diversity within the titles

• and more

Sharing economy

Examples of digital businesses in the Asset & Service Sharing (=Sharing Economy) vertical include Uber, DoorDash, Airbnb among others:

Value Proposition examples Airbnb: 

• The value proposition includes the sharing of an asset (the place to stay) as well as a provision of a service component (hosting)

• As with all platform business models, we need to look at the value proposition to all involved participant types, in this case consisting of guests and hosts

• Value proposition for guests

  • Choice & variety

  • Cheap(er): often cheaper than hotels

  • Authenticity / community

• Value proposition for hosts

  • Income generation

  • Convenient transactions

  • Risk minimisation

• and more

Online Travel

Examples of digital businesses in the Online Travel Agencies (OTA) vertical include Booking.com, TripAdvisor and Expedia:

Value Proposition examples Booking.com:

• Value proposition for travellers

  • Cheap(est) prices: via called rate parity clauses with hotels (where permitted)

  • Amount of choice

  • Reduction of risk via reviews and ratings

  • Useful app & website: certainly some of the best travel websites & app

• Value proposition for hotels

  • Incremental revenue: or the promise thereof as well as the risk of losing revenue to hotels that participate

  • Demand / revenue management: hotel can adjust dates & availability, e.g. sell strong season via their own site and put lower seasons on Booking.com

  • Global reach: Booking.com helps hotels to reach global markets

• and more

Social Media & Search

Examples of digital businesses in the Social Media vertical includes Meta’s Facebook, Instagram, X. Examples of Search Platforms include Google, Bing and others.

Value Proposition examples Google:

• Google is a platform business model with 3 participant types: Search Users, Website Owners and Advertisers (being a to-be-distinguished subset of Website Owners), hence we need to look at the Value Propositions for each of these

• Value propositions for Search Users:

  • Find/access information & solutions to problems

  • Lower search costs/efforts than traditional methods

  • Accessing information in most life situations

• Value propositions for Website Owners:

  • Access to audience: access to incremental audience

  • Well-matched traffic

  • Insights via free analytics tool Google Analytics

• Value propositions for Advertisers:

  • Supply of new targetable advertising spaces

  • Better advertising ROI an/or avoiding the risk losing customers

  • Low barriers to entry and exit + scalability

• And more

Software-as-a-Service:

Examples of digital businesses in the Software-as-a-Service vertical include Salesforce, most Adobe products and hundreds of thousands more cloud-based software products:

Value Proposition examples productivity SaaS:

• Align with modern organisational principles

• Reduce admin work by moving data entry to the source

• Provide features useful for all that are affected by the software (role-based)

• Self-explanatory

• Engaging to use

• Have various types of support functions and

• Provide immediate use

• and more