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Service Design It’s the activity of planning and organizing a business's resources (people, equipment, and processes) in order to improve its quality and enhance the customer experience.  Servicescape: Totality of the ambience and physical

environment in which a service occurs. I mean everything involved in the service delivery. Also called service setting.

 High & Low Customer Contact Service: High-contact service means you offer customers a lot of hand-holding and direct support, while low-contact service means you give them tools to sort things out for themselves. If you can get business done without talking to a store employee, it’s low contact.

Servicescape Servicescape: reception area, certificates on the wall, relaxing music, color scheme, lighting, white robes, gloves

Starbucks Store Design “What you don’t want is a customer walking into a store in downtown Seattle, walking into a store in the suburbs of Seattle, and then going into a store in San Jose and seeing the same store.

Starbucks’s current mission is to create “sustainably designed, locally relevant stores that inspire and nurture the human spirit one person, one cup, and one neighborhood at a time.”

“It’s all about us meeting our customers where they are in their day.”

I think we have managed to, with a simple cup of coffee and a very unique experience, enhance the lives of millions of people by re-creating a sense of community, by bringing people together and recognizing the importance of place in people’s lives.

High vs. Low Contact System High contact: a greater level of interaction exists between service providers and customers, such as health care, hotels, public transportation, some retailers, and schools. High contact allows a greater degree of customization of the service delivered to individuals. Low contact: there is a low level of direct contact with customers, such as coin laundry, mail box rentals, medical test labs, and some retailers. Work is more standardized and completed in an assembly line fashion. One question to ask: Can a customer complete a purchase with minimum contact with employees? If yes, then it’s low contact.

High vs. Low Contact System High & Low contact: The higher the contact, the more expensive it is and the more customized it can be.

High vs. Low Contact System How to use low contact service to give customer a high contact feeling? Takashimaya vs. Amazon Go.

Service Design It All Started with a Stupid Question…

Think about this stupid idea of putting people on the conveyor belt… and why not?

Service Design: the Idea Airlines Luggage Handling

Basic idea and process:  People and luggage arrive together at airport  People and luggage are separated  People and luggage are transported together  People and luggage are reunited

It’s a small observation. Then someone at the airline asked a question why do WE handle the bags, rather than asking passengers to carry them on board? Airlines started to charge bag fees at $20 or $25 a piece. Before we knew it, $5.8 Billion dollars were collected in 2019!

Service Design: Healthcare  When people are sick…people and

medical service providers are separated physically.

 Goal: bring people and medical service providers together.

The health care industries face similar challenges of airport luggage handling. How do you bring people and medical service providers together when people are sick?

Service Design: Healthcare Several solutions are present to bring people and doctors together:  Doctors make house calls, mobile clinic,

in-home care, midwife  Convalescent home/nursing home  HMO/PPO: patients go to clinics,

pharmacies, labs, hospitals…  Kaiser Permanente: patients go to this all

in one “department store”  Ambulance takes people to ER

Service Design: Restaurants  When people are hungry…people

and food are separated physically.  Goal: bring hungry people and food

together.

The food and restaurant industries face similar challenges of airport luggage handling. How do you bring food and people together when people are hungry?

Service Design: Problem and Solutions  When people are hungry…people

want to be united with food  In-house: go to market, buy raw food,

cook at home, eat  Outsourcing: go to a restaurant, eat

Service Design: Solutions Outsourcing options:  Go to store, buy cooked food, eat  Order delivery by phone/computer

 Go to restaurant (where food is) and  Order take out food  Sit down and self-serve food  Sit down and have other people bring food

Service Design: Alternatives

Service Design: Alternatives

Domino’s Business

Model

Domino’s Around the World

New Service Designs

Think: Why didn’t Domino’s develop home delivery services using their years of experience and existing delivery capabilities?

Sushi Restaurant

Auto Repair Shop Lounge

Bank Branch

Retail Banking

Consumption Trends Experiences and experiential product spending are on the rise. Experiential products are products used to gain experiences, such as sports and outdoor equipment. (e.g. RV sales)

A.T. Kearney 2017 study: America’s Next Commercial Revolution: Influence vs. Affluence

Discussion Questions Please research the following questions and provide evidence to support your answers. Everyone: Describe the servicescape of a retail store you like and explain why you like it. Please be comprehensive. Everyone: Find an industry or a business where low and high contact services are both used. What do you think are the reasons both are offered? Which one do you prefer and why? Everyone: Is pumping gas a high or low contact system? Will the gas delivery service like the one discussed in the podcast work? Why or why not?

Group Discussion Be sure your group is ready to lead and/or discuss the following question in class, with research or facts-based evidence. There is a trend of turning high contact services into lower contact to save costs. How would you do it without letting customers feel they are being neglected or short-changed? How would you take it to a different level and make customers “want” to use the low contact service? Please use examples and references.