Service Design Drives ‘Affordable Luxury’ Business Models

handcrafted shoes
One of the manifestations of digital business models built around good service design is the burgeoning of affordable luxury, which carves an entirely new aspirational category of of the sizeable middle class market.
But to illustrate, let me tell you a story, based on my experience of last week. I always have to buy trousers and get them altered because I don’t fit the shape that they come in, off the shelf. Or, as Garfield the cartoon cat once said, “I’m not overweight, I’m undertall”. So I was pleasantly surprised to find a high street retailer who offer an alteration service for their chinos (this is not common in London, btw). I bought a pair and took it to the counter to ask if they would measure and alter it for me. They said I would need to measure it myself and fold it to the point where I wanted the length reduced. Now, I don’t know if you’ve ever tried measuring your own trouser length. It’s about as easy as painting a smiley in the middle of your own back. So I said I’d take it home, measure it and bring it back. Next morning I was back with the trousers duly folded. Stood in the check out line and 10 mins later, I was told I needed to put a pin in to keep the fold. I asked for a pin, but of course, they didn’t have one. It took me another 10 mins of queuing at their alternation desk on another floor, and then a final wait in the original queue.  If you’re like me, at these moments you feel the life force seeping out of you.
For people who are time poor, which is most of us in most cities across the world, this ability to value the customers time is such a critical aspect of any service, that I’m always amazed when people don’t get it. In this case my joy at the finding the alteration service has definitely been tempered by the half an hour of my time I lost in the process. And based on my simple and one-off experience, you can immediately see how service design could be used to improve this dramatically – i.e. if somebody thought through the experience end to end, for the customer. Upfront information about the service terms is a simple idea. Just below the in-store poster announcing the service should be a simple list of what the shopper needs to do to use this wonderful service. Expectation setting often makes all the difference. Having a tape measure with a small weight that can be used like a plumb line in front of the mirror, to get an accurate length is another simple idea. These should be in the dressing room. On the basis that I might want to come back for more, why not let me store my measurements in the store app (they don’t). In my perfect world, I could sit at my desk at work at the end of day and order another couple of pairs, based on the new colours available, and they would have trousers ready in the store across from my work at a time that they could commit. The world is full of people like me who will repeat buy clothes from brands they trust and have had a good experience with. This is fundamentally the difference between a more traditional view of the business and an outside in view – driven by service design which puts the consumer in the centre and tries to remove all the friction in the entire buying cycle.
There are parts of the world, such as in most parts of India where this is an easy and people driven process. You buy a pair of trousers, and an in-house tailor takes your measurement and give you a time for delivery. This kind of people driven process, and infect the very idea of customisation is a luxury in the western world – especially when it comes to high street apparel brands. People are expensive. Factory made clothes cost less than half of tailor made ones. Thanks to improved stock management and product design, you can now get more options within the clothes you wear – a longer sleeve, a different collar, a slimmer cut, etc. But economics demands that any customisation at the point of delivery remains outside the purview of most products. Yet, digital models can significantly lower the bar for the accessibility of a luxury service. In my example of alteration – you can see how the app enablement and ordering based on my specific measurements could even be done in a centralised way and delivered to a store. I can live with a lead time of a week – as long as it’s a reliable one. At the core of this is the ability to take the customisation information off the universe of consumers and deliver the customisation at a much lower cost, at higher scale.
When you walk into your regular coffee shop, you don’t have to tell them each time that you want 2 shots of coffee, half a cup of foamed milk, with semi-skimmed extra hot milk (or as Niles Crane would say, “Double Cappuccino – half-caf, non-fat milk, with just enough foam to be aesthetically pleasing but not so much that it leaves a moustache”.) Instead, you can just say ‘the usual’. Starbucks can also increasingly do that via the app – because no matter which Starbucks you go to, if you order through the app, you can just do it with one click. And Starbucks can even analyse your choices, behaviours, and make suggestions for you.  Industrialisation in all its forms has historically created scale but lost customisation. Digitisation is allowing us to layer the customisation back over the industrial scale. This is why it’s so critical for consumer facing business to embrace this combination of service design and digital customisation.
Starbucks coffee options
We subscribe at home to a brand called Hello Fresh – they are one amongst a few who deliver ready to cook dinners. Each dinner is a dish that you’ve chosen from a menu via the site. It comes with a recipe and all ingredients pre measured and packed individually. If your tiger prawn recipe requires echalion shallot or samphire – don’t worry if you don’t have them in your fridge (let alone if like me you have to google them to learn what they are), they come in the box, in the right amounts. This too is like a luxury service but thanks to the underlying business model and the digital enablement of the ordering, menu and selection process, it can be delivered to a larger non-luxury audience.
If you look around there are dozens of places where this kind of customisation, once outside the purview of industrial models, is now back in vogue thanks to digital tools. Personal financial advisors, customised movie recommendations, configurable holidays, customised trainers – and many more. Remember though, this is not an efficiency play. It’s not enough to build a generic digital front end that will drive this mass customisation. It needs a commitment to service design to see the whole experience through the eyes of the consumer and to understand where her challenges, points of confusion, discomfort or dissatisfaction are and build the flexible digital model to address these.