This project is the winner of the Service Design Award 2016 for Best Commercial Project.
This case study is part of The Service Design Award Annual 2017. The Award Annual book is available to purchase in print format. Not a member yet? SDN members enjoy a special 10% discount. Become a SDN member, or upgrade your community membership to have access to all exclusive benefits!
Apollo was a bookstore. Videoplanet rented films. Filmipood sold movie DVDs and music CDs. All three were conventional bricks and mortar stores and finding it very hard to keep up with the adoption rate of digital devices and digital content consumption.
The result of the work has been a 200% increase in registered customers and a 300% increase in interaction frequency. This was achieved through unifying different entertainment and content brands into a single experience under one roof. All the above outlets were combined under the Apollo banner, and has become a destination for entertainment and has not only redefined the bookstore, but has also entered and completely changed the cinema market in Estonia, significantly improving the customer experience and consequently customers’ loyalty to the service provider.
The new Apollo concept is designed around the desired customer experience, not around theproducts or services on sale, because they are universal and created by global publishers and studios. The team worked together with the client, then a holding company called Rautakirja Estonia, by illustrating the customer’s point-of-view: WHY have 7 different brands with competing content while providing no synergy either to customers or the company? As a first step, the designers mapped the touch-points of existing retail brands to their customers. This provided an understanding of the Rautakirja’s organisational capacity on the one hand, as well as the customers’ expectations and behaviour on the other. This helped to clearly illustrate the urgency of the coming transformation due to the paradigm shift from analogue content delivery to digital. What could Rautakirja offer, if content is digital and entertainment options limitless? The new service concept was designed to unify the customer experience bringing three customer needs together into one physical space:
The service concepts have been in constant development since 2010 and culminated in the 2014 opening of the first combination Apollo store and cinema multiplex. Three new Apollo entertainment centres have opened since, making Apollo the number 1 entertainment brand not just in the minds of customers, but also in terms of sales for books, music, films and cinema in the whole country.
Apollo was one of seven brands under Rautakirja Estonia, a holding company. With considerable office politics and departmental focus undermining cooperation, getting the right people’s attention was not easy. Before the services and customer experience could be improved, everyone needed
to be gotten on board. Through qualitative research, primarily in-depth interviews with customers as well as staff members in various positions throughout the holding company, designers could reveal that while customers were aware of several of the brands, none of them offered anything unique that would help to build long-term loyalty. Furthermore, internally managing 7 brands was clearly inefficient and the cost of marketing as well as personell training for different retail system, was a cost that was delivering little benefits. Obviously, all 7 retail brands delivered a different customer experience that created everything from indifference (no idea where they bought something) to indignation (eg. charging for compulsory customer cards). The weaker brands were identified, which along with obvious trends in the changing analogue to digital landscape, made focusing on the stronger brands a reasonable decision. Furthermore, a clear target was defined: people should remember WHERE they bought something, not just WHAT they bought.
However, the structure of the holding company, with its entrenched manner or working was making implementing changes difficult. This lead to a management buyout, which allowed the strategy and vision for the future to be implemented, reducing the brand portfolio to Apollo and extending its reach beyond books. In 2013 fifteen Apollo entertainment stores were opened, in 2014 the first
Apollo / Blender juice bar was opened, which was soon followed by the first Apollo cinema in 2015. In February 2016 the brand’s flagship Apollo center was opened in one of the busiest boroughs of Estonia’s capital.
Overall, the working process, has been continuously iterative, following the pattern of:
Discovery – qualitative and quantitative research with customers and staff to determine opportunities and threats
Defining options — ideation of various possible solutions based on defined customer needs, including researching and testing competitive solutions on foreign markets. Workshops with client staff to narrow the options to viable versions
Developing solutions – prototyping and testing concepts, both analogue and digital. For retail concepts with consumables (food, drink) live testing with target groups. Walk throughs of retail spaces and co-creation with both customers and architects. Delivery of final concepts. Primarily in cooperation with interior designers, architects, graphic designers and brand specialists, communication and business management. Continuous monitoring of implemented solutions and follow-up research with customers as well as benchmarking trends around the world.
Benefits
For customers, the most obvious benefit is the unification of content under one brand. As the market is still very competitive, the usefulness of a single incentive program for everything from books to fruit juice makes loyalty worth while. For the company, an increase in the incidence and value of purchases has proven the merit of customer centric service development. The organisational change that the management buyout instigated has resulted in a wholly new organisation, that now as default considers value for the customer as the primary driver for developing new products and services. The number of repeat (loyal) customers has more than doubled from 110 thousand in 2012 to 250 thousand in 2016 and the average purchase has increased 65%. For the cinema, which had 0 customers in 2014 now commands the top spot in Estonia 1,3 million visitors (out of a national population of 1,3 million).
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In this issue of Touchpoint, we focus on interdisciplinarity itself. What does success look like, and what are the tried and tested methods to achieve it?
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As the practice of service design continues to gain recognition and traction, a notable trend has emerged: organisations are choosing to build and utilise in-house service design teams rather than relying on external agencies. This shift brings with it a host of considerations, both positive and negative, that merit in-depth exploration and critical reflection.
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