What is service design and how is it relevant for retailers creating excellent experiences?
Let’s start with a definition…
Service design, according to the Nielsen Norman Group, is the act of “designing, aligning, and optimizing an organisation’s operations to support customer journeys”.
The successful execution of a service design plan requires three different components to work harmoniously together across the entire business:
- People. The employees, contractors, vendors, and other service providers.
- Tools. The diverse list of physical and digital artefacts required by the business to support experiences. Some examples: ecommerce technology, physical click and collect counters, online chat software, business architecture and/or business system connectivity.
- Processes. All the workflows and “ways of working” needed to control and operate the people and props in line with consumer expectation.
A useful analogy
The service design function needs to be looked at in two contexts in retail.
1. Pre-purchase. The service design activities that work to enhance the experience when the consumer is in the moment to engage.
2. Post-purchase. The service design activities that create amazing experiences after the consumer has turned into a customer. All post-purchase activities start at the moment the consumer has parted with his/her money, right through to the point the consumer receives the product.
It’s important to note that both pre- and post-purchase comprise a mix of “front of house” and “behind the scenes” activities (defined by Nielsen Norman).
Think of service design activities like the front and back stages of a theatre performance. The consumer sees and experiences everything the theatre production teams want them to see, however, there is an army of people, activities, and workflows occurring behind the scenes (the script, direction, lighting teams, orchestra etc.).
Any issues/faults that lie within the backstage will translate to a degraded performance and experience for those watching.
The director of the theatrical performance defines success as all moving parts (front and back) working perfectly together to present the desired outputs: a perfect performance.
Now think in the context of a retail performance and what the management team must consider when trying to deliver a perfect performance at scale for hundreds of thousands of “audiences of 1”. Service design in the theatre and service design in retail is no different.
The retail silo
Without the right executive mindset the function of service design will never gain enough momentum to impact online experiences.
There are two types of businesses in the world today…
- A business who SAY they are customer centric in everything they do
- A business who IS customer centric in everything they do
The retailer who IS customer centric is an organisation that has full support from the top down. This is one of the biggest hurdles businesses face.
Retailers who struggle in “service design” are also those where the executive mindset sees retail experiences in two distinct parts:
- Physical retail
- Online retail
The consumer sees a single experience and doesn’t compartmentalise their journey to fulfil a need.
For retailers with a bricks and mortar presence, the service design function is the “omnichannel glue” that brings together and binds the physical and digital retail experiences. This is how retailers with a physical footprint, can defend against online-only retailers.
Retailers who have no bricks and mortar can also deliver on the service design function, by focussing heavily on those behind the scenes activities and consumer touchpoints.
In fact, it is the high standard of service design from online-only retailers that enable them to surpass their bricks and mortar counterparts.
The context (what today’s consumer wants )
The online experience is somewhat impersonal and consumers are craving more.
Euromonitor’s economic/consumer trend experts are calling it “Experience More”. This is a ‘mega trend’ of increased expectations of consumers when they want to engage online.
“Experience More” is interpreted in the following five ways…
#1 Consumers want a conversation
Consumers don’t want to be communicated or spoken to by marketing teams. Consumers want authentic conversations. This is why physical retail will never die because (in most cases) consumers can have value driven conversations with knowledgeable employees in-store.
#2 Liberated by choice
Consumers want to be liberated by choice, not only with product, this relates to how they can engage with an organisation.
#3 Personalised experiences
Consumers want to feel like the experience they are having is personalised for them. Research shows 75% of those surveyed would make the time to create their own “style profile” (for fashion retailers) so more relevant content can be presented in the future.
Retailers often misinterpret this need and rush to deliver one-to-one experiences at scale. A good example of this type of failure in action is seen all over the world with the low standard of chatbots.
#4 Consumers want to be in full control
“Consumers aren’t looking for brands to define their journeys, but to design experiences that help the consumer create their own journeys” (via AdWeek)
Consumers want to feel a retailer has empathy for his/her need and deliver a localised experience. Consumers can tell if they are being presented sterile international content that has come from a head office based far away.
Authenticity also comes in the consumer’s ability to engage with employees and share knowledge.
Service design examples in retail
To help illustrate the service design function, here are two examples. One shows a “pre-purchase/front of house” activity and the other “post purchase/behind the scenes”.
Example #1 – Online chat
As stated earlier, consumers desire the human-to-human interaction in physical retail.
However, this employee accessibility can also be elegantly applied during online journeys. The one strong example gaining momentum is online chat (NOT chatbots).
When determining the specific consumer motivations behind the use of online chat, consumer research was conducted by BoldChat (albeit way back in 2012) asking the question of why they prefer using chat.
The top three responses….
- “I got my questions answered immediately”
- “Because I can multi-task”
- “It’s the most efficient communication method”
Online chat is popular because…
- It’s personal,
- It represents a one to one customised experience based on the consumer need (what physical retail delivers)
- It’s the communication tool of choice for the consumer
In the context of applying the service design methodology, the first step is designing the online chat implementation plan. What is required for it to add value to a consumer’s journey and how does this influences the three components: people, tools, processes.
Online chat: The people
- Dedicated resource
- Executive teams agree to invest in resource (business culture)
- The right people are put in this position: good communicator, avoids jargon, and understands brand voice.
- The right support is provided to these employees, so they can call on subject matter experts for technical questions.
Online chat: The tools
- The right chat software would need to be used.
- Other software would be needed so the employee has access to things like….
- Product information to answer queries
- Customer’s buying history
- Customer’s existing order tracking updates
- The ability to securely process an order
Online chat: The processes
- Training systems are in place for these employees
- Employees are trained and empowered to resolve customer complaints and to know when to elevate to management
- Rules on the behaviour of the chat software would be created to ensure it fits within the consumer expectation. Some examples…
- What happens when the chat is not being monitored by an employee – what does this look like to the consumer?
- Does the online chat icon flash in front of a consumer’s face if click activity stops?
- What other services can be offered on the chat software that the business wants to offer – booking in store appointments for “Fitting Room Experiences”?
Example #2 – Order management
The second example is how the order management function is set up create amazing online experiences.
The consumer’s experience does not end until the product is in his/her hands. A retailer can construct the most elegant and meaningful pre-purchase experience, but if the post-purchase experience is poor, the entire experience is poor.
In 2017, Retaildive conducted a study and found one of the fundamental reasons consumers prefer to buy in-store is so they can “take items home immediately”. When breaking this study down into age groups, the “take it home immediately” motivation was #1 for younger consumers.
In order to combat the anxiety of paying for something they immediately cannot acquire, retailers need to work hard to ensure the ‘post online purchase’ experience is good.
While retailers continuously complain and blame “the last mile”, this has been an issue for 50 plus years. It’s only really gained significant press because of eCommerce.
To overcome the delivery “experience hurdle”, retailers need to overcompensate with a robust service design that is wrapped around the customer. Amazon are the masters at doing this.
Like the online chat example, the service design for the order management function is designed utilising the three components.
Order management: The people
- The executive team and the wider business work to find out what they are wanting with regards to delivery and pick up options.
- The executive team empowers the right people to improve the existing order management business system or replace it.
- The right people are in charge to ensure all order management systems are working to the benefit of the consumer first.
- Senior management allow/enable cross departmental collaboration to ensure the logistics teams are working closely with the digital and customer support teams.
Order management: The Tools
Having order management software that supports a “customer first” approach, meeting all the customer needs and delivers on all the promises the retailer makes to the customer. A big part of the role this software plays is its connectivity to other business systems.
Order management: The processes
- Processes are set up to establish the behaviours the order management software needs to undertake to support the customer first
- Training systems are in place for employees to manage this tool.
- Processes are in place when orders fall outside of the promises the retailers provide customers. What happens when an order cannot be fulfilled, or its delayed?
While this order management example is looking at “behind the scenes”, recognise the “front of house” components that play an important part of the “order management function”, such as the in-store experience for click and collect.
Some examples of service design considerations….
- Are the in-store signage designs set up to make these counters easy to find and clearly visible.
- Are employees at these counters throughout the day?
- Are the packages for customers securely located close to the counters so customers do not need to wait long to collect their package.
- Is there a nice “waiting area” for customers?
- Are there fitting rooms nearby for those wanting to immediately try on the purchased garment?
- Is there room at the counter where the employee and customer can, together, open the package to ensure the product is in good condition?
- Is the employee empowered to stay with the customer while he/she opens the package? What quality check processes are in place?
The impacts of legacy tools on service design
Organisations are stuck on old outdated legacy order management systems that have been designed for the business first.
These old systems struggle to support what needs to happen today and in particular, elegantly pass information off to other systems, specifically ecommerce technology.
Gartner has this to say on legacy business systems…
Replacing legacy applications and systems with systems based on new and different technologies is one of the information systems (IS) professional’s most significant challenges. As enterprises upgrade or change their technologies, they must ensure compatibility with old systems and data formats that are still in use.
Legacy systems threaten transparency across the entire business, but for the consumer, it creates the “right-hand-not-knowing-what-the-left-hand-is-doing” syndrome.
The cost of running vital business systems (and business processes) on legacy systems becomes a bigger (long-term) cost to the business because of what it does not deliver to customer experiences.
For a truly “customer centric” business culture, senior management need to identify and call out the legacy systems that do not comply and drive change. This is why CIO’s and IT Directors are envious of start-ups who start with a clean slate.
If you truly think you are a customer centric entity, do you follow the above service design functions across the business to ensure all activities wrap around the consumer?
If not, you better start looking over your shoulder. Today’s consumer has loyalty to their own need, not to a brand that is slow to adapt and change to meet his/her ever-evolving expectation.