In 2016-17, leading Irish food retailer Musgrave Group were in the midst of a price war within the parental shopping segment, with competition heavily focused on price and many products sold at or below cost.
To build a competitive edge, Musgrave turned to customer-led service design to create a compelling value proposition and differentiating customer experience. Ultimately, the aim was to increase footfall and time spent in-store, driving significant revenue growth in the segment across both baby products and in-store spend overall. Hellon, the world’s most awarded service design agency, was selected as the partner for the project.
The identified business challenge was tackled with a human-centric design approach including insights, ideation, and prototyping phases.
Insights were gathered through diary studies, in-depth interviews, and mystery shopping to understand parent shoppers’ underlying needs, motivations, and challenges, their main drivers for selecting where to shop, as well as exploring best practices in the industry and beyond. Analysis of the insights revealed stress to be a key factor in the shopping experience, also influencing time spent in store and basket size. As readers with young children might be familiar with, when a kid throws a tantrum in-store, parents just want to get out as quickly as possible.
Ideation and co-creation, together with Musgrave stakeholders, therefore focused on generating solutions which reduce the feeling of stress and make parents’ shopping experience easier. The concept borne out of the ideation phase was the Parent VIP-hour, a time of the day during which parents received additional support in-store, including ideas such as free fruit for kids, sweet-free aisles, help in packing groceries, and preferential parent parking.
Following ideation, the VIP-hour was tested during a prototyping phase (LiveLab) and trial period in two stores. Hellon designed and ran a LiveLab, in which Hellon designers and Musgrave employees brought the VIP-hour concept to life in-store by using physical mock-ups (such as temporary signage for parent parking), service gestures (e.g. free fruit/ tea/ coffee, advice on baby products) and visual prompts (e.g. guidance) to test the concept with real customers to gain their feedback on the live experience.
Following the LiveLab, a six-month pilot was launched to further test the commerciality of the VIP-hour and its effect on shopping behaviour and revenue.
Analysis of sales following the pilot revealed a 3.3 percent increase in baby category revenue and 5.2 percent increase in overall store sales when compared to pre-pilot figures.
Seventy percent of shoppers also indicated lower levels of stress during their experience and 90 percent said they would spend more time in-store or make more frequent shopping trips.
The impact on brand impression was also high, with an increase of 643 percent in social media reach and 512 percent in engagement during the project. For the stores involved in the service design project and commercial pilot, the total annual revenue impact reached €678,000, however, based on the improved customer experience and new solutions, Musgrave estimates an incremental revenue of €4.84 million annually as a direct result of the Service Design project.
Several initiatives have also been deployed across Musgrave stores nationally, such as free fruit for kids, doubled parking spaces, and hotel grade baby changing rooms in all new build stores.
The project has also gone on to win awards for customer experience design, proving the approach as an impactful way of solving complex business challenges.
Hellon is a service design agency based in London and Helsinki, with a track record of over 1,000 successful projects across 20 countries. Eager to understand how service design could impact your business? Get in touch with us!