Convenience – With Capital ‘C’

Quick Read: Recent innovations across sectors underscore how Convenience is at the core of their offering to the consumers who are happy to pay a premium for the same. While these could have disruptive implications to traditional business formats, they too are not far behind in figuring out the new playing field – otherwise called Convenience with a Capital ‘C’.  

Convenience as a core value proposition is getting all pervasive.

And for proof of this, one needs to just look at the vending machines in Japan or the jidohanbaiki as the Japanese call them.

Japan, they say, is like the spiritual hub of the vending machines. In fact according to this CNN report, there are currently around 5.5 million vending machines in Japan, which is one vending machine for every 23 people in the country! You have them across categories spanning every conceivable kind of location.

You have vending machines at street corners, restaurants, coffee shops, toilets, even in trams and on mountain tops selling everything from canned drinks to drinks that are supposed to be a surprise till you buy them, from hallucinogenic herbs to charms, from books peddling porn and erotica to those listing test questions for exams, from footwear to bras and panties. Almost everything and everywhere!

Regardless of the amusement that these jidohanbaiki or the vending machines in Japan evoke from people around the world, the simple grain of human truth that seems to emerge out of all this is the fact that people tend to value convenience over price on many an occasion –  irrespective of the category and location. And more so in the recent past.

More recently a Japanese food company Kagome has installed vending machines at the start/finish lines of one of the city’s major running routes to sell fresh red tomatoes to the exhausted runners. The tomatoes are priced at a 280-gram bag for 400 yen ($3.80) and a 180-gram bag for 300 yen ($2.80) which is nearly 270% higher than the price at which you would have gotten it at a supermarket in Tokyo. (as per Tokyo market prices at the time of writing this article). Despite the price premium, reports suggest that these tomatoes are selling well, given that these vending machines are said to be replenished every day.

Kagome(Kagome Tomato Vending Machine. Source)

What does the consumer value here? Kagome – it appears – is not actually selling tomatoes through their vending machines, but a natural alternative to energy drinks and bars delivered at your convenience.

Let’s Take Pharmacy

Disrupting the equation that patients traditionally had with their doctors, insurance agents and drug stores, IDEO has recently worked with a startup to design PillPack. This short video explains the concept neatly.

As this FastCompany article says, PillPack is an end-to-end pharmacy and delivery service for pharmaceuticals that is using design to vastly simplify the process of swallowing pills each day. You don’t have to worry about pillboxes, reminders, refills, insurance, co-pay, ad hoc doctors’ prescriptions etc; PillPack takes care of all that for you. All you need to do is tear off the latest M&M Fun Size packet and swallow what’s inside when it tells you to.

Costing $20 per month for the user, PillPack’s service is an interesting example of how – despite several regulatory, legal and FDA challenges that govern drug/drug delivery –  selling healthcare in a convenient package could indeed be big business. In fact, the company has now successfully raised $4M in funding from investors and is boldly stepping up its bid to become the top mail-order pharmacy disrupting all existing players in the traditional value chain.

PillPack

Again, which business is PillPack in? Drug delivery? Or is it Convenience in medication?   

Fashion Retailing

Lamoda is an online fashion retailer in Russia. Albeit with a twist. Not only does Lamoda’s uniformed deliveryman bring the clothes that a customer orders, but he also waits for her to try them on, offers fashion advice, takes returns, and processes her payment on the spot.

Lamoda(Delivering the experience of your local store at your door step, Lamoda. Picture source)

As per this Businessweek report, Lamoda currently employs about 700 couriers and services 1.5 million active users in Russia with sales of more than 6 billion rubles in 2013 despite the logistical challenge of having had to deliver mail orders to the world’s most sprawling nation, spanning nine time zones with an extremely unreliable postal service. The fact that Lamoda looks at it as a serious bet on the business of offering convenience to its customers becomes apparent when you look at its underlying cost structure.

Reports say that despite the cost of delivery for Lamoda accounting for as much as 25 percent of an order totaling less than $1oo, the company doesn’t charge for shipping and keeps prices at the same level as in stores. As a result, its 2013 annual expenses were expected to have exceeded its annual sales. And the interesting part is this. These current losses haven’t stopped investors from betting big on Lamoda’s potential. Over the past two years, Lamoda has raised more than $200 million from billionaire Len Blavatnik, JPMorgan Chase, Kering etc.

Is Lamoda selling clothes? Or Convenience? It appears to be a moot question again.

Retailers not far behind in the new game

Interestingly the underlying theme common in all these 3 examples – Japan’s ubiquitous vending machines, mail order pharmacy business model of PillPack and Lamoda‘s clothing courier with a twist of convenience – is unmissable. The brick and mortar store as it stands today is at threat.

But it appears they are not far behind. For the first time in decades US cities are said to be growing faster than suburbs with customers seeking convenience more than anything else. So, stores like Target and Walmart are embarking on major experiments in scaling down, finding the right locations while ensuring the right formats in order to cater to this convenience seeking urban dweller.

With emerging markets rapidly catching up in spending power, with money value of time increasing for average consumers and an infinite ocean of choice to choose from in virtually every single category, convenience has already become a key differentiating factor.

Probably in a very near future, most products and services will have offerings that sell convenience as their core value proposition. Otherwise they are perhaps in the fitness industry.

(Featured Image: Vending Machine atop Mt Fuji, Japan. Source)

Block By Block – A Consumption Focused Design Paradigm

It took more than a 100 years for inkjet printers to become commercially viable. The reason?

Severe interdependence of the components and underlying systems. 

For e.g., even with the slightest change in the chemistry of the ink, the composition of the resistors had to be changed, and this potentially impacted the physical layout of the circuits and so on.  The solution for this?  Modularity of design. 

Wikipedia defines modularity as ..

 the degree to which a system’s components may be separated and recombined.

Today most tools, gadgets, processes, systems, structures, designs that we interact with on a daily basis have modularity built from deep within. Right from the nuts and bolts of a system to the way it has possibly been put together on an assembly/production line, modularity is all pervasive.

In fact it is almost accepted wisdom now among designers and manufacturers that the speed at which an innovation can be commercialized is directly proportional to the speed at which the underlying design (of the system) and the process (of the assembly or integration) is standardized and modularized.

Now consider the above statement in conjunction with the following self explanatory paradigm of Design Thinking evangelized by IDEO, called the Desirability – Viability – Feasibility triad of innovation design. 

IDEO

Based on the above two, my hypothesis is the following:

While modularity in the context of production has almost proven itself to be a pre-requisite for establishing technical feasibility and – in many cases – for driving business viability of a given innovation , modularity in the context of consumption – if done right – can have far reaching implications in seeding the attributes of human desirability for the same.  

Three recent examples that seem to suggest the compelling potential for modularity in the context of consumption as a design paradigm:

(1) Phoneblok: Most of us, by now, would have seen this short video on the idea of building a phone with modular detachable blocks. This  presents the idea of Phonebloks –  hailed as a radical vision of what tech could be. The idea for me, is sheer ingenuity and insight. The possibilities  of such a consumer focused modularity in design seem to be truly empowering and liberating.

(2) NoFlo – A Flow Based Development Environment: The philosophy of Modular Programming is the default standard in most coding systems. But this modularity was mostly – for lack of a better term – limited to the realm of abstraction and ideation, since the corresponding code nevertheless lends itself as ‘strings of spaghetti’ and presents challenges for debugging compilation and logic errors.   With NoFlow as a development environment, modularity can be made more tangible and actionable in order to help inform, structure, design, test, debug and implement a complete software package.  The following is the video put together by the team for their Kickstarter campaign to raise funds (the funding was successful!).

(3) Modularity in content consumption: Unleashing the power of modularity in the domain of content consumption is in fact the name of the emerging game. Platform agnosticism is one of the many ways in which modularity lends itself in the consumption context for services like Amazon, Youtube and now Dropbox.  The latest edition of WIRED in fact features a fantastic story on  Dropbox’s radical plan for a future where “the gadgets are dumb, the features are smart, and data trumps devices.”

Dropbox

So there we have, emerging examples of modularity in the context of consumption (as opposed to only production) and how they promise to pan out in mobile, software design environments and cloud based architectures. Something for the technology powerhouses to sit up and take note? In fact in a recent interview with Forbes Clayton Christensen worries about Apple saying Modularity Always defeats Integration! 

Even in life as usual as we know it, no matter what we do from fixing a meal, concocting a cocktailassembling a piece of furniture, to laying out our Google Newsfeed, there’s always been a sense of joy, an inexplicable sense of desirability that we had for our stuff, for after all, it was our creation.  Step by step. Block by block. Isn’t it?

(Source for the featured image)