Direkten — A Service Design Case Study

A Hyper Island student project exploring the effects of digital transformation on customer behaviours and expectations in the convenience sector — plotting a near future where stores can remain relevant in day to day life.

CHALLENGE:

Direkten is one of Sweden’s largest convenience retailers with over 180 branded stores across the country. As well as stocking the convenience staples — soda, confectionery & periodicals — they also offer services such as post, gambling & bill payments. It has been this financially essential part of the business that has been most affected by digital transformation.

Our team at Hyper Island was tasked with exploring opportunities around digital technologies that could drive increased footfall to stores.
Project Description:
The target of the project is to find business opportunities for future services that a local store like Direkten can deliver. Gambling, paying bills and other services that we have today are moving from physical stores to the internet so the store has lost many customers. The main question is what services can a local store deliver in the future to meet the need of the customers in the future. How can we connect internet services with physical stores?

Requirements / Deliverables

“Find three new services that have business potential for the future and can be implemented at once. The concept of these services should be tested and there should be a rough business case behind the idea.”

Values

Client is everything, simplicity, curiosity, honesty, and hard working.

Target Audience

The target audience is everyone who appreciates the simplicity and availability of goods, services and personal service. Almost everyone visits a convenience shop at some point or another.

ABOUT DIREKTEN

Direkten is a unique convenience store chain in the service trade that consists of individually owned and operated stores. All stores share a basic brand platform, have a basic assortment and same campaigns but have the freedom to ad local assortment and services.

The stores act together in a chain and offer the consumer a wide range of different goods and services within, among other things, confectionery, Tobacco, beverage, mail, gambling and fast food. In total there are about 200 stores in the chain. The structure is very similar to a franchise chain. The main owner is Axfood (50%) and the store owners themselves (46%).

RE-BRIEF

In order for us to better understand the given brief from Direkten, we needed to map out our assumptions as a team into three categories which were: what we assumed about Direkten, what we knew about Direkten and what we needed to find out about Direkten.

Mapping out the assumptions we had about Direkten helped us to understand what information we were missing much more clearly. This also helped us nail down the assumptions we were going to have to work upon based on the time and resources we had available.

Assumption Mapping:

Some examples of things we assumed about Direkten

Some examples of things we knew about Direkten

Some examples of things we didn’t know about Direkten

Mapping out our assumptions was crucial in helping us write a thorough re-brief of the project to then discuss with Niklas (CEO of Direkten) on our next Skype meeting.

Dissecting and breaking down the original brief helped us interpret the brief much more easily in our own way, as illustrated in our slides included below.

RESEARCH

Our research kicked off with multiple visits to various Direkten stores in many economically diverse neighbourhoods while also carrying out interviews with head office staff, store owners and customers. This was augmented by a horizon scanning exercise where we mapped out trends within the sector worldwide, behaviours unique to Swedish customers and millenials and market and technology opportunities in retail.

• Store Visits:

We visited many Direkten convenience stores in Stockholm, and also observed things such as how the stores were laid out, their size, traffic, type of services they offered, local surrounding area, and staffing levels. We wanted to cover as much ground and obtain as much varied data as possible so we split up in pairs and made sure to visit stores in many different neighbourhoods in Stockholm (including the suburbs). If we would have had more time, we would have also visited Direkten stores in the countryside as well as the city stores, but this was not possible within the scope of the timeframe we had.

We created this card template to record our observations from various Direkten store visits throughout Stockholm

• Interviews with store owners

In order to better understand the store owners pains and frustrations, we created a set of questions to interview 15 different store owners.

Just in case we didn’t get the insights we needed from asking general open questions, as a backup plan we had a couple of alternative questions ready to use in case we didn’t get the insights we needed from the first questions we created.

Why?

We wanted our interviews to feel as natural as possible because we were aware of our personal biases and we didn’t want them to interfere with our research. Another thing we learned is that dividing the interview in “chapters”, makes it much easier to analyze later.

Down below are a few of the questions we used to interview several
Direkten store owners.

Chapter 1: How the store works — a typical day: (warm up)
 
a) Tell us about yourself, when, why, how long, what do you do?

b) Typical day from when you wake up to the moment to when you lock up.

Alternative: Can you tell me about a typical day at work, yesterday for example? From the moment you get to the store and to the moment you close up

c) Do you do any work related stuff outside of “office time”

E.g. When does the first customer come in?

Chapter 2: Owner know his customers

a) Describe a typical customer — this could change throughout the day.
7:30–8:30 / 13:00–17:00 / 17:00–21:00

b) Are your customers local?

c) How would you describe your relationship with your customers?

d) What are your top 3 selling products /product categories in your store?

e) What works really well? Can you give me an example? And what could be better? Can you give an example?

Chapter 3: What do customers ask for?

a) Do customers ask for certain products and services?

b) If they ask for a product or a service you don’t have, what do you do?

c) Have you seen any opportunities that you would like to look into? Could be products or services that you think could work in your store.

Chapter 4: Locality/Customisation

a) Tell us why you have chosen to open the store here?

b) What defines local and who is your competition?

c) What products have you added to your store to accommodate local needs?
Alt. Have you added any products to your store to accommodate local needs?
Why did you decide to do that? When? What was the response to that?

Maybe ask something about the employees? Maybe they said something valuable?

Chapter 5: Wrap-up

a) What is the best thing about your job?

b) Is there something you would like to tell me that I forgot to ask you?

• Observation User Safari:

Other than just scouting the stores themselves, we carried out substantial observational safaris where we observed customers in different Direkten stores for a few hours. We closely watched what they did, what they bought, how did they move around the store, how they interacted with the store owners, what they said and how much time they spent on average at the store.

An example of some observational user research we did in Direkten stores

We also carried out gorilla interviews with a few of them (randomly) to better understand the reason or reasons they were visiting the store.

Here are some examples of questions we asked Direkten customers:

a) Why do you choose Direkten?

b) Why did you come here today?

c) What store do you prefer and why?

d) How do you go about getting something you need, let’s say “…….”?

e) And if that store is closed what do you do?

f) How does that make you feel?

g) How would you prefer it instead?

PERSONAS

After compiling all our interviews with store owners, office staff and customers, we created personas to classify and frame our understanding of users motivations and pain points. This exercise helped us get to know the people who will feel the changes we implement much more deeply.

• Future Trends Research — Scan Card Method

To back up our qualitative research, we undertook some desktop research on the future of the convenience store.

Our research looked at trends, current consumer behaviour, Direkten competitors and possible opportunities.

We used the Scan Card method (taught to us by Danish research agency Bespoke) which helped us compile and break down each of our findings into two parts;

What is this signal?
How and why is this signal relevant to the project?

Trend Research:

Consumer Behaviour Research:

Competitor Research:

Business Opportunity Research

INSIGHTS SESSION:

Findings from interviews with store owners and customers:

1.

2. Direkten store owners know their customers better than anyone so we interviewed them around the subjects of:

i — Services they’ve tried before

ii — Things their customers ask for

iii — Ideas they’ve had

iiii — Who they compete with

3. Direkten stores have many strengths such as:

4. Communication between store owners and Direkten’s head office is not very good on the company’s current intranet.

During our interview process with employees from both head office and the stores, we encountered problems involving Direkten’s internal communications. Much of this difficulty was generated by a poorly labelled and outdated intranet.

This last insight was the biggest game changer for our team because it helped us realise that making the intranet more user friendly could have the most impact when it came to business transformation because it could make the communication between the store owners and the head office much smoother.

Our main conclusion from the insights:

Findings from our future trends research:


PROTOTYPING

Based on our insights we moved onto prototyping a new information architecture for Direkten’s intranet and tested it on store owners at the company’s annual winter conference. We took these findings and put together a simplified and contemporary UI influenced by point of sale interfaces. This offered a vision of how Direkten’s internal communication could be made more simple — whilst catering to issues such as language barriers and the current site’s lack of a mobile view.

IDEATION

Using our insights from interviews with store owners and the future trends research, we were able to quickly identify some key patterns / ‘red threads’ throughout our findings which then aided us massively when brainstorming new business ideas for Direkten during our various collaborative team ideation sessions.

After multiple ideation sessions, we synthesised all of our ideas using a decision matrix method to evaluate how impactful and easy / difficult the ideas would be to implement in Direkten’s stores.

IMPACT VS IMPLEMENTATION MATRIX:

These ideas were evaluated on an impact vs implementation matrix.
Services that were determined to have a higher impact and a lower difficulty to implement were formalised and then written in to a fiction of the Direkten store of the future.


POSSIBLE BUSINESS OPPORTUNITIES FOR DIREKTEN

From our decision matrix, we selected seven ideas to explore further which had the highest impact and the easiest implementation (according to the decision matrix). The matrix helped us to further narrow down five really good high scoring ideas which we then as a team looked at through our own personal lenses.

Because our client asked us to deliver four tested ideas, we had to narrow down our concepts. As a team we decided to use the dot voting system to help us choose the ideas we most believed in. The final four concepts we delivered are as follows.

1. Uber Discount

2. Digital Loyalty

3. Mobile Phone Charging

4. Mobile Payments

CREATING OUR FIRST PROTOTYPE & USER TESTING

After we chose the final four ideas to present to Direkten, we went to an annual Direkten supplier conference which had many Direkten store owners which we could test our first intranet prototype on.

First Prototype of the Direkten Intranet using Invision:

FEEDBACK FROM USERS

After our first round of testing, the feedback we received overwhelmingly fell under four key headlines (listed below). Receiving this feedback directly from store owners helped us to quickly rationalise and modify the concept for the second round.

Feedback from store owners during our first user testing session

The first user testing and feedback session helped us realise that we had oversimplified the intranet, and that we had focused too much on simplifying the call for action in the intranet, rather than focusing on the user and how they felt after using the intranet successfully (finding the information they need quickly and intuitively).

ANALYSING RESULTS & CREATING PROTOTYPE #2

We then created a second prototype with some adjustments using Invision based on the feedback we had been given by the previous users.

Some of our findings from user testing our second prototype:

  1. “I would like easy access to other stores’ telephone numbers”

2. “List of suppliers should be under contacts” — This would take pressure of main office. People call the main office, to find out which supplier they should call to fix their problem

3. “It’s good, but I feel like a lot of information is missing” — overall experience

4. “Doesn’t make sense to have name of my store under “My Store” Eks. Direkten Liljeholmen, confusing that it’s on the same level as other cta buttons here. It should be the overall headline instead of a button?

5. General User insight regarding navigation:
Our system is not that easy — intuitive to navigate in. People are not doing systematic mistakes — except for the contact info — so it’s hard to say how we solve it. But thinking about clear labelling, could be a way to test.

FINAL PROTOTYPE

Going through multiple user testing sessions, prototypes and iterations was essential in helping us (through the double diamond process) to create and evaluate our ideas and design our final prototype.

WHAT WE LEARNED FROM THIS PROCESS

At the end of the project we reflected together on the whole process we went through during this project, and looking back at it, we concluded that if we hadn’t done user research and user testing so early on in the process, we don’t think we would have been able to arrive to a final solution which fulfilled the client’s needs as well as Direkten’s store owner’s needs.

Also, another underrated but important learning was: Happy team mates + Happy clients = (usually equals) Good money.

Design Thinking (Double Diamond process)

SOME OF THE TOOLS AND METHODS WE USED DURING OUR PROJECT:

1. Mashup Innovation:

Mash-ups is a collaborative idea generation method in which participants come up with innovative concepts by combining different elements together. In a first step, participants brainstorm around different areas, such as technologies, human needs, and existing services. In a second step, they rapidly combine elements from those areas to create new, fun and innovative concepts. Mash-ups demonstrates how fast and easy it can be to come up with innovative ideas.

Brainstorming around the areas of:

  • TECHNOLOGIES (e.g. telephone, 3D printing, GPS),
  • HUMAN NEEDS (e.g. love, transportation, waking up in the morning), and
  • EXISTING SERVICES (e.g. Google translate, Spotify, Candy Crush).

Spend 3 minutes brainstorming around each area. Have participants write one idea per post-it. Make the brainstorm active and fast-paced. Have participants call-out each idea as they place it up on the wall. By the end of the brainstorming there should be three large clusters of post-its on the wall, one for each area. The more the better!

2. The 5 Why’s

This simple and powerful method is useful for getting to the core of a problem or challenge. As the title suggests, the group defines a problems, then asks the question “why” five times, often using the resulting explanation as a starting point for creative problem solving.

3. Innovation: User Day Partying:

This exercise supports a user-centred approach to product and service innovation. Teams create imaginary user (a persona), map out an average day in his or her life, and identify the challenges that he or she experiences. Teams then use this to brainstorm new products or services that could help with those challenges. Finally, sketches or prototypes of the best ideas are quickly developed presented back to for feedback.

4. Team Development Sessions:

Give each other feedback, check in to see how everyone is feeling and talk about issues during the project, while also reflecting on how we can improve our current ways of working and communicating.

5. 90-Minute Prototypes

90-Minute Prototypes is a short and sweet prototyping workshop that challenges teams to build basic clickable app prototypes within 90 minutes. It’s easy to plan and run and demonstrates how rapidly an insight can be turned into a test-ready prototype. Use it to inspire your team to embrace a prototyping mindset.

FINAL RESULTS AND FEEDBACK FROM DIREKTEN

On our final week, we presented the final prototype to Niklas (Direkten’s CEO) and tested it on many store owners (with very positive feedback). To our surprise, Niklas was blown away because we under promised and over delivered by prototyping a new intranet which wasn’t part of the requirements, but also by delivering at least three new business ideas for Direkten’s convenience stores which he originally asked for.

“What has been great about this is yes, you do have the big feature technology in here but you also have really thought about peoples’ day to day lives and that’s something we really value” Niklas— Direkten