It’s well-known that the environment a service is executed in is important. The physical environment is rich in cues about the quality and character of the service, cues that consumers look for both before and after buying and that affect their experience of it. With many services (e.g. hotels), the company’s own premises is an integral part of the service, and even when it’s not (e.g. broadband), paying attention to the shop, showroom or similar (the servicescape) can be very rewarding.

During the 00s, there has been a trend for service companies whose products are considered dull, complicated and a necessary evil by consumers (banking, insurance, etc) to look at where consumers do enjoy to go and consume: shops selling designer objects or clothes, coffee shops, and try to emulate the positive experience of visiting these places. The concept is rather simple: by borrowing bits from a service experience that is fun or pleasurable, the service provider deemed less exciting by consumers becomes more enticing. Even though the coffee or the smartly designed umbrella is just a small part of the actual business, the feeling of being in a positively charged, relaxed environment like a café or a shop puts you in a different mindset than at the traditional bank office. Most importantly, if successful, it changes behaviour at the branch. To talk with Mary Jo Bitner, customers exhibit more approach behaviours: coming in, staying, spending money, coming back.

Approach or avoid? A decision based on reactions to the servicescape.

Two Scandinavian examples of this from the last decade: Danish Max Bank rolled out their Max Café concept in 2004, where you can “get a cafè latte, a talk with your bank manager, or see what banking products we can offer”.

Having a coffee at a Max Café. Images from the Danish Design Council.

Similarly, Swedish banking and insurance giant Länsförsäkringar built their Länsförsäkringar Shops (concept start: 2007) around the pleasurable consumption of consumer goods. The servicescape, an elegant and inviting space created by Swedish retail branding firm Bas Brand Identity, is similar to a design store with added space for meetings. The shop sells a selection of items that are related to Länsförsäkringar’s banking/insurance products (e.g. smart shopper with protection from pickpockets) or, not all that related (e.g. hand crocheted iPod cover).

Inside a Länsförsäkringar Shop. Image from Bas Brand Identity.

Incidentally, the same phenomenon could be seen within art spaces at the same time (the 00s). In my bachelor’s thesis, for example, I discussed how the Modern Museum in Stockholm moved towards the retail shopping and café experience – both in its visual communication and in the increased prominence of its museum shop, as well as the addition of an espresso bar (adding to the Modern Museum/Architecture Museum’s existing two restaurants).

Both the Max Cafés and the Länsförsäkringar Shops are, in my opinion, excellent examples of how using the service environment strategically can transform how customers interact with their service provider. I wonder though, when it comes to borrowing concepts for your less exciting service, what will come next. The idea of shopping and coffee shop visits as the most pleasurable of experiences is of course cultural, and therefore in flux. The attraction with these places is often connected with the idea of turning your space into a meeting place, and this role can change. Perhaps the critique of the excesses of consumer culture will lead to a radical shift in direction for where we want to meet and relax, for example towards connecting with nature? And in turn, will next-generation banking be placed in rooftop gardens? Or, more weatherproof, the bank branch turned into a relaxing orangery? (Or a zoo. Just imagine…)

It’s interesting as well, that these two activities (shopping for pleasure, drinking lattes) are typically seen as female-oriented. Either it’s a conscious targeting, or just the fact that they are easily incorporated into a service business of this kind (the banking pub could be problematic, after all). But maybe there’s an opening for servicescapes of a less gendered kind here. In any case, the more services move completely on-line, the more we’ll see innovative service environments that will offer us enjoyment and pleasure. even when using the provider’s main service doesn’t. Otherwise, what’s the point of having them at all.

I’m a fan of maybe ten brands on Facebook. There’s one or two signs of support for friends’ businesses, some Stockholm clubs and art institutions whose events I want to be in the know about, and a couple of fashion/design magazines. It’s this last category that interests me here, as there is no particular practical reason for becoming a fan, other than getting the basic info of a new issue coming out. Well you don’t exactly have to be Bourdieu to craft a very simple theory of why I associate with certain brands (as a friend once put it: “habitus galore!“), so I won’t bore you with it. (Even though I think the question of type of product is mysteriously absent when the most avid of Brand Conversation Evangelists are preaching. Frankly, if you’re a toilet paper brand, you ARE a little less fascinating to strike up a conversation with than if you’re Acne.)

What fascinates me a bit is this: the very act of Facebook fandom seems to lessen my appetite to actually go out and buy the magazine. Not that I read the magazine on-line instead, that wouldn’t be especially interesting. I just… lose interest a little. I don’t know if it’s just me, but I suspect not – there’s something quite logical about this paradox. You could call it the commercial brand equivalent of “slacktivism”, simply signing up digitally for a cause without any actual change of behaviour or donation. (Purely digital activism is not all bad, of course – here’s a piece for design mind that makes a case for it, but sort of avoids the question of bottom-line contributions.)

There are as you probably know hundreds of models of consumer motivation, but one that seems useful here is Dan Ariely and Michael I Norton’s concept of conceptual and physical consumption. Conceptual consumption, meaning the psychological consumption of ideas and concepts, can occur both together with and independent of physical consumption. Basically, they argue that conceptual consumption is implicated in, and plays a large role in even the most basic consumption acts, such as eating or drinking. Rather than just eat something to survive, human beings add a lot of conceptual layers to the act: “Is this dish fairtrade/eco/healthy?”, “Doesn’t this dish feel a bit 80s?”, “Will my colleagues thinks I’m unmanly if I choose the salad?”. The satisfaction of successful conceptual consumption (feeling good about yourself in a number of ways for choosing the small, expensive, stylish, fairtrade chocolate) often drives behaviour even when it’s in conflict with physical consumption (assuming that you enjoy the taste of the cheap private label stuff more). My thinking is that if the conceptual part of the consumption of a brand’s products is large, it can be replaced by other interactions with the brand, that allow you to get the good bits without effort or having to pay.

It’s a common observation that the artefact is losing importance, that the enjoyment of physical ownership (the record collection) can be replaced by the access to shared digital files (Spotify) without much grievance. But the Facebook page does not even offer a part of the product, like the streamed Spotify album vs its physical (deluxe edition with book and linen cover) counterpart. It’s just the brand as a sign, without the product. And it’s interesting that when it comes to some brands, for many consumers, that might be what counts. In a world where more and more social life happens digitally, what’s the value of owning a pair of New Hip Brand shoes vs showing that you’re in the loop by being a fan of said brand on a social network?

The more a brand is building its strategy on its magic as some sort of status signifier, the easier it would probably be for the consumption of its products to be replaced by some free, purely symbolic consumption – the conceptual part of consumption is satisfied in any case. It leads to an interesting challenge for luxury and subculture brands: how to balance brand, product and digital presence, to be both in the conversation and in business?

How does it happen – the creation of really innovative products and brands? Not the ones that are slightly better than their predecessors. The ones that redefine their category, redefine the very activity of using a phone, buying groceries, playing video games … In Design-Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean, released last month, Roberto Verganti, Professor of Management of Innovation at Politecnico di Milano, covers this subject and reaches some interesting conclusions.

The problem with much product innovation, according to Verganti, is that is largely user-driven – changes are done to products in response to what consumers say that they want. This will create incremental changes; when asked about what more they want from their phone, say, few people will think up a radically new use for it. Rather, they will talk about small nuisances with their existing product that they would like to have fixed. More radical innovation has traditionally been driven by the emergence of new technologies, it’s technology-driven. Technology has created some groundbreaking products, but is it the only way?

No, Verganti argues, really radical innovation should be design-driven. With this term, he’s not referring to design in its everyday meaning but in its etymological essence, as “making sense of things.” The really interesting point Verganti makes, I think, is that innovation needs to be centered around the meaning of things. People don’t buy products or services – they buy meanings. They use things for various emotional, psychological, and sociocultural reasons, not just utilitarian ones. Companies should therefore look beyond the actual product and its technicalities, and instead try to understand the real meanings given to it by consumers.

Understanding these means being able to innovate radically, by redefining such meanings. This can not be done by standard consumer research. Instead it takes a broader approach to getting to know both the context in which the product is used and general trends in society (I’m thinking that ethnography, anthropology, possibly semiotics are the methods for this?). Additionally, it demands an analytic, creative mind – an interpreter – that can come up with a way to create a new, appealing, meaning.

Verganti uses some very well-known brands as examples of this type of innovation. For example, when asked what they wanted in video game consoles, users said more power, more virtual reality … Enter the Nintendo Wii, a product that doesn’t give you those things, but instead redefines how video games are used. Or, in the service sector, who would have thought that they could see shopping organic, healthy food as a pleasant pastime, pre-Whole Foods? Well, now they are. As these examples show, this approach to creating innovation is not detached from what the user wants at all. It aims to find what he or she wants, but doesn’t know yet. And who doesn’t like to be pleasantly surprised?

You can also hear Roberto Verganti speak about the main ideas in his book in a recent Harvard Business Ideacast.

Half of 2009 has passed. It might be an appropriate time for some recapitulation of trends, that have emerged or intensified this year in the field of packaging. At least three clear trends can be identified, that I will briefly explain and exemplify over the same number of posts.

Packaging is of course, like other forms of visual communication, deeply submerged in culture. Therefore, though some trends seem to emerge solely as self referencing fashions among design agencies, they can often on closer inspection be seen as a reaction to overlying tendencies in the world around us. (Which strengthens my view, that to excel in working with brand communication, you above all have to be interested in what happens in the world. Without being curious, and knowledgeable, about life, people, trends, economy or politics, you can not expect the pieces of communication you produce to actually communicate to people.) With this in mind, there’s no surprise that packaging this year has been steering towards The Safety of Yesteryear, The Other Side of Luxury and The Goodness of Nature. These are the trends that I’ll look into for the next three posts.