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

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

The common approach and methodology used which connects the three topics is service design. The process used to design a service concept included the phases of insights, ideation and concept. Customer insights have been collected using online survey and cultural probes. An expert interview, desk research and trends have been used to gather insights about the market. Service ideas have been generated using the ideation technique of opportunity brainstorm and customer value constellation. The service concept was then concretized with the tools mapped in the chapter about the service concept. The tools used were Service World, Service Canvas, Moodboard, Service Poster, Service Blueprint and Customer Journey. In addition to these I developed Product Criteria and Core Components that influence the supermarket experience.

The concept in a nutshell

Based on the theory, the insights collected and the ideation exercises, I developed a service concept called Green key.

The value proposition for the service idea describes the customer benefit and the main elements of the service:

Green key is a set of food-related and technology-enhanced services that inspire people to discover healthy meals, accelerate grocery shopping and preparation on busy days, guide people with choosing the right products for a balanced nutrition and reward them with bonuses such as discounts, home delivery and customer voting for favourite and new products. 

Service Poster Melanie Wendland

Service Poster Melanie Wendland

The service contains several services and different touchpoints that evolve around a little chip, the green key. The green key chip is technology-enhanced token that allows the customer to identify herself in the supermarket by plugging the key into the shopping cart or basket. The chip can be attached to a key chain and carried along. A shopping cart with a touch display shows customer generated or supermarket provided shopping lists, store orientation, location of products, recipes and the items added to the shopping cart with nutritional information, alternative product recommendations and pricings. The customer can install the green key app, which gives an overview over spendings and nutritional values, shopping lists, recommended recipes and savings. With the app the customer can order groceries easily online, apply earned discounts at check out or check out through mobile payment in the shop. In the web touchpoint, the customer can suggest new products to the shop or use votes to vote on which products should be on offer.

Service World Melanie Wendland

Service World Melanie Wendland

The service comes with it own product line, which is a collection of products with strict product criteria according to organic principles. The product line carries the green key label to help customer recognize the products easily. The social media channel Facebook is used for the meal of the week campaign, where customers can vote recipes posted by other customers. With this people empowered campaign customers can choose ready packed meal bags for a special price to the supermarket. Additionally the supermarket will offer a small range of ready packed meal bags with ingredients and a recipe that are easy to cook and of high nutritional value. The customer only picks up the bag, pays and can prepare the meal at home. The meal chosen through the Facebook campaign will have a special offer price and feature the customer who has submitted the recipe.

Conclusions

The thesis has highlighted the need and relevance for developing transformative services that create value for both the customer and the business by encouraging customers to live a healthier life through the consumption of healthier and sustainable food. The service concept developed suggests a set of services that can be considered a new business opportunity for the grocery trade. The service opportunities presented have a strong link with the trends outlined in the theoretical part of the thesis and translate the concept of transformation through services into a tangible service concept. The customer insights have shown that there is a need to develop services that support busy people in the purchase and preparation of food products which is in contrast with the current activities of the Finnish grocery trade business, which is focusing on product innovation rather than service innovation. The thesis has contributed to the discussion on transformative service as well as created a new discussion of how to translate the theoretical  discussion of a service concept into service design tools. Finally the use of digital technologies in the development of the service concept have highlighted the opportunities that these technologies offer to service innovation.

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