5by5: Five Perspectives on Service Design for Retail

Interview with Jeff Pollard, former Director, Integrated Experience Design & Development, Lowe’s; Craig LaRosaPrincipal Director at Frog; Carrie Blumenfeld, Director of Retail Experience Design at U.S. Cellular; Eric Johnson, consultant in digital products and services; Francisco Guzman, Lead Designer at Instacart

Interviews by Thomas Brandenburg

“Communicating and maintaining design intent at scale without the designer’s  ability to physically “touch” every retail location are the biggest challenges.” —Jeff Pollard

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1. What do you consider to be the disruptive trend(s) that are affecting the retail industry that seem most promising?

Jeff Pollard: Shift from big data to data-led. Up until now, traditional metrics and data have been leveraged to measure and “analyze” existing elements of service experiences. The results have tended to be rear-view facing and of little use when thinking about new service innovation. However, metrics and analytics employing new digital platforms, sensors, and mobile devices are enabling data-led service experience… by design (e.g., Disney “Vacation Management” and “Next Generation Experience”).

I’m now curious to monitor and see how emerging AI capabilities can be combined to enable new proactive service models and experiences that are able to “materialize” as patterns and data are recognized. Service designers still need to provide the frameworks but some early precursors seem to include things like “Robot Lawyer” and “Narrative Science,” a Chicago company that extracts“the story” from data.

Craig LaRosa: The move from product sales and brand building to purpose driven retail. Companies like Lulu Lemon, Warby Parker and Blue Apron are delivering value to their customers that’s more than just selling stuff.

Carrie Blumenfeld: Within the omni-channel landscape, many retailers have first focused on tackling the inventory flexibility and accessibility challenge. Alternatively, the goal of truly delivering personalized experiences in brick-and-mortar is more challenging than in digital, particularly with regards to new customers.This, coupled with the rapid reframing of the role of the store, makes cracking the code on how to operationalize authentically personalized in-store experiences one of the more challenging disruptive trends.

Eric Johnson: Little by little retail is migrating its way into our homes to save us time. Same day delivery of online items, voice-activated devices like Alexa, and before long VR, are bringing the store to your home. Amazon is now trying to own your weekly grocery-shopping list with its proposed purchase of whole foods. I recently set up an Amazon Alexa at my 70-year-old parents house and have been surprised by how much my mother enjoys interacting with the device, which informs her about the weather and other factoids first thing in the morning. She generally avoids using their computer, but she gets a kick out of the humorous and humanized interaction she has with Alexa.

Francisco Guzman: Everything is about convenience, and that often means these industries need to move online. We live in a world where you can get most things brought to you at a touch of a button: fast food, clothes, cars, etc. The easier you make it for a user to obtain a good, the more likely they are to use your service. There have been a couple of industries that this has been hard to do with, such as grocery, but we’re moving in that direction and I wouldn’t be surprised if ordering groceries online becomes as much of a default behavior as ordering a book or electronics. The same could be said about apparel: we’re starting to see more and more services address this sector.

 

“The biggest barrier to scaling integrated services in retail, are retailers. The old way of doing things just doesn’t work anymore.”  —Craig LaRosa

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2. What are the biggest challenge(s) of scaling services in your specific retail sector today?

Jeff Pollard: Communicating and maintaining design intent at scale without the designer’s ability to physically “touch” every retail location. Realizing that every community and physical location can be unique, the challenge is to deliver a modular and flexible system knowing that many hands will be involved in delivering the new experiences. Design intent needs to be tailored to different audiences including HR, IT, Operations, Management, outside agencies, supply chain and front-line employees (just to name a few) knowing that they are ultimately who bring the experiences to life and are responsible for nurturing and evolving them.

Craig LaRosa: The biggest barrier to scaling integrated services in retail, are retailers. The old way of doing things just doesn’t work anymore. Siloed organizations that are setup to support traditional offerings are the biggest barrier to create service experiences that require radical collaboration across those siloed groups.

Carrie Blumenfeld: One challenge that impacts all sectors right now is around the area of KPIs/measurement. The world is moving towards experiences and what that means in digital interaction is very different than within physical space. Within the digital sphere, interactions are measured by clicks, bounce rates, follow-thrus, etc. but analogous metrics in brick-and-mortar aren’t as easy to measure. So in an era where interactions are informing each other and are interweaving offline and online, it’s exciting and challenging to identify new metrics. Traditional brick-and-mortar metrics like return on square footage don’t give us an opportunity to properly evaluate engagement like digital measurements allow for, so we continue to seek new ways to evaluate interaction.

Within the wireless space of retail, evaluating how advisory services evolve within the omni-channel arena presents technical/infrastructure opportunities.

Eric Johnson: Retail is under increasing pressure to provide ever improving customer experience at multiple touch points with fewer in-store associates. In order for store associates provide a better experience, they will need to be armed with well-designed front and back of stage tools and processes, which are supported by multiple internal groups.The projects that I have been involved with over the past several years has really brought to light how difficult it can be for a retailer to maintain in-store technology supporting in-store services. Hardware, software development, networking, and technical support costs add up quickly when you roll a new service to 200 store, let alone 1,000. You can roll out a great service like buy online and pickup at store but if the store associate who is gathering the items for pickup has a mobile device that does not have photos of the products that were ordered, and mistakenly selects a couple wrong products, you now have spent a lot of time and money on an experience that will be twice as disappointing to the customer because he or she have invested time and effort.

Francisco Guzman: The biggest challenge is the personal nature of food. When you purchase a specific monitor, that monitor is the same for every single person who purchases it. The same is not true about an avocado. Some may want it ripe, and some may not – it is very dependent on personal preference and also context (do you expect to consume the good today or at a future point?). When it comes to Instacart and other services like it, that seek to leverage the infrastructure that exists all around us instead of building everything out again (such as having our own inventory), it is also hard to have a 100% gauge of what is in stock at any given time. Because of this, we work very hard on this concept called replacements, which is essentially trying to figure out what is a good substitute in the event that an item you ordered is no longer available.

 

The example that comes to mind is not retail but indicates one direction I see service innovation heading. McDonald’s has opened a prototype store in Chicago where the ordering and pickup process has been re-imagined.” —Eric Johnson

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3. What brands or retailers come to mind when you think about service innovation in this industry?

Jeff Pollard: Home Improvement: b8ta, Pirch, TreeHouse in Austin. Amazon is quickly accelerating in this area but I share these three because I believe they most fully embrace the idea of “play” and exploration that people expect from an

in-store retail experience… usually before they then purchase online.

Craig LaRosa: Jet.com has been doing a great job of differentiated their value proposition of the lowest prices, even in the era of Amazon. Which is the reason Walmart paid billions for them and made the jet.com founder the CEO of Walmart ecommerce.

Carrie Blumenfeld: I love observing how retailers are reframing experiences at retail across all industry verticals, but I’ve been particularly intrigued by how service providers with intangible products have been playing differently within physical space – specifically e-banks, insurance providers, etc..

For example, State Farm Insurance created their “Next Door” space as a customer-research and marketing vehicle focused on connecting more authentically with younger audiences who traditionally reject relationships in this category. Similarly, Capital One Cafés offer things like “community rooms,” providing open workspaces for non-profits and organizations to reserve and utilize. Such innovations at retail are designed to forge stronger affinity to their brands by creating expanded use opportunities for their focal audiences.

Eric Johnson: The example that comes to mind is not retail but indicates one direction I see service innovation heading. McDonald’s has opened a prototype store in Chicago where the ordering and pickup process has been re-imagined. After 60+ years, the process of ordering a burger and fries has been redesigned so that you don’t have to wait for your food while attempting to stand in a location to not look like you are waiting to order. You can order using a touch screen or at a register and then your food is brought to your table. McDonald’s has been innovating the back of stage operations for years and now has made the ordering process much less stressful, you order and go find a seat. The same number of employees are now providing a new, improved level of service.

Francisco Guzman: Amazon is a clear innovator when it comes to retail: recently they announced a service which will allow you to try clothes for a certain period of time before deciding if you’d like to buy them. The types of products that are strongly oriented around personal taste, like food and clothing, need different approaches than traditional e-commerce. I also think Walmart is doing some interesting work by allowing click-and-collect: allowing customers to pre-order things such as groceries online and having them pick them up at the store vs. delivery.

 

“Having an appreciation for and understanding of data is incredibly important for the type of work we do. Increasingly our systems are able to collect an amazing amount of data, and so it’s important to not only know how to use it, but also understand at a higher level how it can be leveraged to improve the service.” —Francisco Guzman

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4. Besides having a mindset and the skill set for service design, what other knowledge, experience, or skills do you see as valuable for a designer to have in his or her repertoire today?

Jeff Pollard: I have worked with and learned a great deal from service designers employing theater skills, business design skills (think viability modeling), and most recently, new behavior models. Understanding “why” someone will change (employee or customer) is very important to understanding “what” needs to change.

Craig LaRosa: Understanding how client organizations function and how an idea becomes reality. As a service design consultant, clients put their careers in our hands. Our clients have been tasked with making some of the most radical changes in their organizations. They have spent personal capital, time, socialized, adopted, and—the biggest learning of my tenure on the client side—get these initiatives funded. Understanding the world they live in, would be one of the most important skills a designer could have.

Carrie Blumenfeld: Additionally valuable skillsets include an understanding of the principles of shopper marketing and buyer behavior, as well as a strong ability to communicate effectively with and within organizations. Having a service design skillset enables one to design the types of engagement or services needed, a spatial design skillset enables one to design the environment that will maximize such engagement opportunities, and a shopper marketing skillset enables one to effectively communicate and showcase product within such space. Thus, shopper marketing skills and buyer behavior expertise helps one effectively deliver a company’s priorities in a capacity that meets the needs of a shopper. Furthermore, an ability to apply methodology in a way that is translatable to mixed audiences and skillsets in a seamless way is also a critical capability.

Eric Johnson: Whenever I hear about an organization needing to “transform”, I see a perfect opportunity for service design because there is a real opportunity to have an impact. Many retailers are closing stores or dying off because of increasing online sales and a shift from buying things to buying experiences. Instead of retailers looking at whatever the next new buzz word technology is, (Beacons, AR-VR, AI) they should look at what is truly useful through the holistic lens of service design. There are so many issues that a service design focused approach can solve and many more truly useful innovations that can be invented. Service design methodologies can help get the entire organization moving in the same direction to make the innovation possible.

Francisco Guzman: Having an appreciation for and understanding of data is incredibly important for the type of work we do. Increasingly our systems are able to collect an amazing amount of data, and so it’s important to not only know how to use it, but also understand at a higher level how it can be leveraged to improve the service. Data is another representation of our users that we should be facile with, especially when it comes to the new advances in computer science around machine learning. I wouldn’t say a designer needs to know how to do any of these things, but understanding how that can feed into an experience, and how to partner with data scientists and people give data insight, is incredibly important.

 

“I would like to see less brick-and-mortar real estate for lease as a result of brands and retailers reframing the purpose of physical retail further beyond transactional destinations.” —Carrie Blumenfeld

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5. What would you like to see happen for the future of service design in retail?

Jeff Pollard: For many of these new experiences to be nurtured and realized, a cross-functional approach is required inside large organizations (think Fortune 50 & 100). More importantly, it would make it easier if those leading cross-functional teams were also design thinkers. Currently, service design appears to be reporting up to leaders in Marketing, IT, Innovation and sometimes HR. But during my recent career search I’ve noticed a desire at the C-suite level to employ those with design backgrounds in VP and CXO level roles. Organizations need design thinking at the top but while many of us have been perfecting our craft we haven’t necessarily been as interested in broadening our skill sets and people skills. For example, a title of VP, Customer Experience seems like an appropriate role for many of us but in addition to experience design can also be responsible for leading a strategy team, consumer insights team and call center or even ecommerce merchant team. We pride ourselves on being ferociously curious about the customer or employee. I hope many more of us will expand that to include gaining experience in other functions of the organization so that we are better prepared (and willing) to lead at the top in order to accelerate service design innovation.

Craig LaRosa: I would like to see more of corporate America understand the value of Service Designers in their organizations. Due to changing consumer behaviour, customer expectations and the added value of a Service approach, Service Design is one field that has the talent, experience and tools to tackle these challenges facing all aspects of business. Companies and organizations need to understand that they are not measured against their direct competition, consumers measure them against the best in class services from any and all industries.

Carrie Blumenfeld: I would like to see less brick-and-mortar real estate for lease as a result of brands and retailers reframing the purpose of physical retail further beyond transactional destinations. As much as convenience drives more digital shopping and delivery than ever before, people will still seek places to go and things to do— for entertainment purposes, browsing and discovery purposes, etc.. Therefore, physical retail has an ever more powerful opportunity to rise to meet more of the experiential needs or destinations for fun and connectivity for communities.

Eric Johnson: Whenever I hear about an organization needing to “transform”, I see a perfect opportunity for service design because there is a real opportunity to have an impact. Many retailers are closing stores or dying off because of increasing online sales and a shift from buying things to buying experiences. Instead of retailers looking at whatever the next new buzz word technology is, (Beacons, AR-VR, AI) they should look at what is truly useful through the holistic lense of service design. There are so many issues that a service design focused approach can solve and many more truly useful innovations that can be invented. Service design methodologies can help get the entire organization moving in the same direction to make the innovation possible.

Francisco Guzman: I’d like us to be more and more comfortable with how technology is increasingly playing a role in every industry, including retail. Sometimes it feels like retailers are overly concerned with their present business, at the cost of seeing where things are going. It’s important to have service designers who can think long term about these things, and who can persuasively argue for why investing in such a future is important.

 

Bonus question—What service design strategies would you use to steal customers from Amazon?

Jeff Pollard: Amazon is still very much a self-driven transactional experience. Yes, you can read/contribute product reviews, view related products and they have made transacting business and delivery very efficient. But there is very little interaction or “heart” with the brand any more that makes me loyal. If I can find the product cheaper or need it faster (experienced both this past weekend) you can be sure I’ll look somewhere else. The design strategies that I have employed involve understanding the emotional needs customers value and then designing an ecosystem that surrounds the experience of which “transacting” is just one part. For example, offering multiple levels of advice integrated into online and in-store tools that made the customer feel confident went a long way in surprising, even entertaining the customer but most importantly, building confidence BEFORE making a purchase.

Some service design strategies are even removing the self-driven transactional experience that Amazon is famous for. Example: GetMagic.com – I literally texted the following last Monday, “Need to locate and purchase a Chinook Summit Bivy Bag, Blue and have delivered to my house this Wed. for a camping trip leaving on Thurs. The service took over and they handled the rest!! I choose that level of service over hunt and click any day!

Eric Johnson: Although Walmart has started experimenting with refrigerated online order pickup kiosks, I am very curious to see how Amazon disrupts the grocery industry if their bid for Whole Foods goes forward. Walmart, Costco, Kmart, and Target rely on grocery shopping to drive frequent repeat business. Walmart has started rolling out refrigerated online order pickup kiosks at some of their stores. Owning the weekly grocery and cleaning supply list is the next retail service frontier and the Return on Experience and the Return on Investment should be well worth the effort.

 

5by5: Five Perspectives on the New Language of Service Design