Master thesis: Designing a service concept for the Finnish grocery trade

May20

by Melanie Wendland, melanie.wendland@gmail.com

Here is a little wrap up of my thesis I just delivered.

Background & Research objective

There is an increased discussion in the news worldwide that people today suffer from health consequences that can be traced back to wrong food consumption. The food consumption many people are used to is on one hand adapted to fit our busy lives and on the other hand promoted by a food industry that tries to maximize profits and increase sales. Especially in Finland, the grocery trade business is organized around making people buy processed, ready made meals.

In contrast to this there is a rising trend of slow living, meaning that people try to decrease speed of life and put more attention to the lifestyle we used to have before life got optimized for efficiency: home grown food, hand prepared and consumed with enjoyment and time. Customers start demanding more transparency, variety and focus on health in the food they consume. Against this backdrop the question arises whether supermarkets in the future should play an active role in educating their customers in a healthy nutrition and take responsibility for their customer’s wellbeing with regards to food consumption.

This gap between changing customer needs and the lack of health supporting services in the grocery trade represents the opportunity for this thesis. The aim of the thesis was to develop a new service concept for the Finnish grocery trade, which encourages supermarket customers to choose healthier and sustainable food.

 Approach & Theory

There are three main theoretical discussions that build the relevant base for the context of the report. The thesis first looks at what a service concept is and how service concept is has been discussed in the academe. The thesis shows that there is no unified accepted definition of the term but the reviewed literature suggests a few common characteristics. The service concept communicates the customer benefit or value of a service idea to stakeholders, employees or customers and should include information about brand and marketing, highlight the strategic intent of the organization, specify the experience the customer receives and describe operational tasks and activities. To make the service concept definition tangible and usable for the context of service design, I mapped service design tools to the characteristics of the service concept. These tools make up the service concept developed in the empirical part of the thesis.

Thesis Structure Melanie Wendland

Thesis Structure Melanie Wendland

In ‘Designing for the grocery trade’ the thesis explores what kind of aspects are relevant when developing new services that deal with food and consumption behavior in supermarket environments. Influencing people’s behavior towards positive change is a challenging task and research suggests that within the context of nutrition supermarket interventions and games have been successful approaches. There are many trends that suggest that changes in customer behavior is changing the way supermarket will function in the future and that business need to react to these in order to stay on the market.

Finally ‘Transformative Services’ as the third theoretical base looks at the concept of services that intent to change the behavior of individuals or groups in order to foster wellbeing among them. Even though research in this area is still limited and recent, there seems to be a common notion that transformative services are considered a way for service business to survive in challenging times of market saturation and lack of differentiation. In order to make the theory of transformative services tangible for the use of developing a service concept, I point out eight ingredients that add transformative character to services.

Methodology

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Foresight is part of Service Innovations

May20

In today’s organization’s strategic or service development projects you hardly hear a word about foresight or futures research. If you do, you are probably dealing with professionals of the field. Typical scene in developing services or company strategies is that we tend to make our decisions based on current normative knowledge – and perhaps worse, with consensus driven mindset. We use too often “I know/I feel” -tool in critical points where instead we should useresearch material and insights about the topic in question. Organizations seem to lack knowledge on how to use foresight as part of development process. It is a powerful tool when used systematically, and when used efficiently it can give you the possibility to spot and develop new business innovations before competitors.

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Foresight vs. Service Design process

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Field notes from Cape Town

May7

By SID student Terhi P.

Howzit? My calendar tells me that I have been here in Cape Town for three months now. Time flies, even in a place where the concept of time is very different, African-time, as they say.

Project work and studying at CPUT

I am here related to the UFISA collaboration and been mostly involved with the activities of Kujali Living Lab, social incubator for ICT based solutions at the Cape Peninsula University of Technology (CPUT). Kujali has provided me an opportunity to take part e.g in a rural community development initiative, as well as to work together with local emergency unit doctors in a mobile app development project. It has been an interesting opportunity to introduce and apply service design methods and tools in a foreign culture and context, and there is a great interest to strengthen design thinking approach for development initiatives. Kujali has also a new “accelerator” office at Bandwith barn, a hub for innovative, design focused companies and start-ups, through which I have been able to gain insights on the creative industry side of the city.

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In addition to Kujali projects, I have been taking part in a course on Design Theory & History, together with local Industrial Design students.  It’s been really interesting to see how design subjects are taught in a university another side of the world.  Not that differently actually. Lekker. I am also very much looking forward to a new collaboration project that is starting in connection to the CPUT Desis Lab, where our aim is to utilize service design approach and methods in a renovation process of a medical clinic.

Special workshops

I have also attended couple special design workshops while in here. CPUT design department is collaboration closely with Köln International School of Design (KISD), and one of the concrete manifestations of the collaboration is a joint project investigating the urban phenomena of gentrification in Berlin and Cape Town.

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Cut the corners first – Harness the power of futures thinking

May6

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“Futures are about knowledge. We must be inspired about futures. Futures are also about storytelling. “ explained lecturers Minna Koskelo and Anu K. Nousiainen.

In the course Futures thinking and foresights methodologies we learned how futures thinking is linked to service design and how it can be applied in business. Through hands-on workshops lot of new things were learnt and here are some key learning points.

Decision-making boosted up with futures foresights

Futures foresight methods can help companies to make right decisions to captivate their own blue ocean strategies. When identifying preferable futures and setting trend indicators to follow, companies can improve decision-making. Futures insights offers companies more flexibility to the strategy, support their risk management and produce new business ideas.

There is not just one future, but a whole range of possibilities. Futures foresight is a process of observing current world, finding new curves of change and seeking for opportunities of tomorrow. It is not just about guessing and predicting, but it is systematic approach that combines multiple fields and methods in order to produce proposals of possible, probable and preferable futures, which organizations can use to make right decisions.

Futures research is a combination of intuition and documented information. It is a creative discipline. There are various frameworks of futures foresight process where one can choose the most suitable one and it can be applied in the innovation process together with service design methods.

Trends and signals: hints of new business opportunities

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Service-dominant logic in business models – a workshop with Professor Vargo

Apr30

Written by Katri Ojasalo

The two trending phrases in academic and business conversations are “service-dominant logic” (SDL) and “business model canvas” (BMC). Is there a connection between them? Or are they just two extremes: the first one an academic theory and the latter one a business tool?

In fact, they are quite far from each other. We can see that the BMC is clearly based on goods-dominant logic. This comes up for example in the use of terms, such as customer segments, channels etc. So, does this tool guide businesses to focus on more irrelevant issues and neglect the guiding principles of SDL: customer value and value co-creation? This was the notion that brought a group of Finnish service researchers together.

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

In fall 2012, service researchers from various Finnish universities were gathered to discuss the future of service research and service competences. During the discussion, we realized a common interest in further developing the BMC, which we all had been using in different contexts in teaching, research, consulting, etc. We saw that the BMC needs adjustments to be in line with SDL. Applying SDL in practice and truly understanding value co-creation can offer a very important competitive advantage for any organization. The BMC seems to be missing this understanding of the relevance of SDL.

To discuss and further develop this issue, we first formed an informal group that was soon changed into a Special Interest Group of the Finnish Service Alliance (FSA – an association of more than 100 Finnish service researchers and companies interested in service research). The Special Interest Groups (SIGs) are forums for discussing and developing specific service-related themes and they are founded by the members of FSA.

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5th Annual Service Innovation & Design Seminar 2013

Apr10

What is the role of design in value creation? How do you ensure sustained value creation for all stakeholders? How do you improve your competitive advantage?

These were the questions that 5th annual SID seminar wanted to tackle. Seminar concentrated this year especially to continuous value creation for the customer.

First keynote speakers Nicholas Ind and Nick Coates tackled these questions right away by presenting how brands can be built together. They focused on the interesting area of communities in co-creation. They gave interesting insights on how people want to belong and be involved, but on the other hand the difficulty of engaging them when the service is launched. People are enthusiastic when they can influence to development but unhappy when they will not get gratitude or not being informed of the end process and launch. This is surely one of the challenges of co-creation; how to gain useful information and keep the process focused and simple while keeping all the participants, including the co-creators, happy.

ImageAfter keynote speakers the day continued in workshops. I participated into design agency Palmu’s workshop, which was a Service Business Case simulation. The workshop was about a new and agile way to find the success paths and processes of a service together with on the fly business case calculation combined with recommendation index. Basically the workshop was a case group work where we tried to find cost effective solutions to “virtual” adsl provider to cut down their maintenance costs. We were able to “test” our ideas with Palmu’s simulation solution that calculated the assumed savings immediately. This was a very interesting approach to service design. It is many times difficult to assume the impacts to company’s revenue performance when service processes are re-designed. Especially in the studying environment when you don’t really know the company’s revenue structures. As a learning point of view, this workshop was very interesting, practical and gave a long waited “hard money” perspective.

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