Business Design. Evolved.

Category: Service Design

5 Service Design Tidbits

A potpourri of service design tips and tricks….

  1. Service Design “best of” book list
  2. Service Design: Practical Access to an Evolving Field by Stefan Moritz (A great starting point).
  3. Service Design: On the Evolution of Design Expertise. An overview of design discipline convergence for service.
  4. What is Service Design? A Thesis by Kristin Fritsche
  5. Designing for Services: A Multi-Disciplinary Perspective. Edited by Lucy Kimbell and Victor P. Seidel.

Retail Rewind – Where oh Where does the New Store go???

I have now survived my first slog on the Long Island Expressway in over two years (visiting on my job hunt).  This visit had me thinking about my past principles and assumptions about retail distribution (aka store location) design. Whether you are in banking, fast food franchising, or big box retailing,  I’ve tended to look at distribution strategy in the context of where customers – or potential customers – Work, Live, Shop, Play, and Retire.

  • Work – Where are the businesses located and what type are they?
  • Live – This is the primary commute pattern between where people live and work. In metro areas this can be “up” as well as out, which is why big cities can support branch and retail at the “per block” level vs. the “per mile” level.
  • Shop – Anyone in City Planning will tell you the soul of the community is rooted in places like the grocery store, dry cleaner, department store, etc. Some shops are “must have” while many are “wish to have”.
  • Play – Usually, but not exclusively a day versus night (restaurant, movies, etc) or the weekend thing (i.e. Manhattan for work, Hamptons for play). Typically cities close to a beach or lake see stronger two area lifestyles.
  • Retire – Extended patterns that include semi-retirement or snowbird commute.

So I have locked in a set of principles about how to think about this for branch building (Bank of America) and for fast-food franchise development (McDonald’s) or big box (Home Depot).  However, my observations of Australia distribution management (when I last visited my other home in Perth) have challenged some of my assumptions.

For instance, branch density and use of ATMs as an extension of branch seem lower and yet, more spatially oriented than a typical US bank. Customer expectations of what is convenient (relative to branch density) has a longer distance “threshold of pain” before dissatisfaction happens.

Channel management is also quite different. For example, it’s expected that if you write a check there will be a per check processing fee. Every business can be paid through a universal payments hub using a BSB number encouraging higher online bill pay use – somewhat similar to Paypal, but without the apparent middle-man between banks. Small ticket payment cards are prevalent as a way of enabling students to pay for lunches, immigrant workers to be paid, and as an alternative form of payments for those without access to traditional banking.  Currently you will be charged if you use the ATM of an institution you do not bank at (However, the STAR alliance of ATM in Oz, aka Redi ATM is creating a competitive tension).

Last, but not least, growth encourages Australian banks to develop “transportable” cross-country channel management. I have not looked at European banks, or retail more broadly, but I sense we would see a different model as well. So while I do not have conclusions (yet), I have a series of questions that relate to:

  1. How thin can branch – or store- density be with the right combination of “other” multi channel approaches.  For a bank, this can be a “few miles”… for Trader Joes it can be can I get there in 30 minutes.
  2. What is the value equation that customers consider between location convenience and overall cost-to-serve?  If you look at food retailers like HEB and Trader Joes, the value difference is such that Trader Joes customers are COMPELLED (I know I am one) to go to their stores – bypassing at least 25 or more other stores that are “close” in category, and yet the “value” equation is soooo different (try their salted caramel chocolates and you’ll understand).  HEB on the other hand is often within proximity of other stores (less than a mile) and become the “choice” – largely because they cater to a Texas home town feel in the face of other national brands and being ALWAYS about the next best “switching” point-of-pain.  The ubiquity of Bank of America has always meant convenience (even if their in store delivery is sometimes a “bit much”).
  3. Has the current economic situation created a discontinuity vs. past principles of success of how to think about Work, Live, Shop, Play, and Retire?  As a country – and even global economy – there have been a series of value discontinuities created by the sustained nature of both economic sluggishness and terrorism ubiquity and aging population on one hand and the significantly changed new millennial work environment.  Where and how people retire (or semi-retire for the most part) and the virtual connectedness of millennials may in fact enable significantly lower branch density within the context of virtual hub (online), ATM payments, and branch.

It’s time to hit the rewind on the retail models of the past and take a fresh look – even to the extent of looking at location segmentation.

Sigh… more questions than answers…



Service Design and Innovation from The Guardian

Service Design Guardian

A while back, the British newspaper The Guardian released a ten page supplement in co-operation with the Service Design Network.   The Guardian has produced a supplement themed on Service Design and Innovation in partnership with organizations from the Service Design and Innovation markets. Included are many interesting case studies and best practices with perceivable business impact but also enjoyable and easy understandable examples. 10 Pages,  350.000 copies…. great stories!

Here’s the link to the content.



Design Methods for Services

Service Design Info

The folks over at UK’s Innovation Connect(a free service) together with the Design Council have put together a great overview of the tools used for service (and customer experience) design.  You can read the PDF here.Cheers!  Rick

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