Ten Different Types of Innovation (cont.) 8

C. Experience (focus on customer-facing elements of an enterprise and its business system - 2nd of 4 types)

8. Channel (how you deliver your products and services to your customers, by deploying e-commerce, physical stores, etc)

The aim is to ensure that customers

"...Can buy what they want, when and how they want it, with minimal friction and cost and maximum delight..."

Larry Keeley et al, 2013

Using the following tactics:

- flagship stores (signature venues that showcase organisational values, quintessential brands and offerings)

- pop-up stores (create a noteworthy and temporary environment to showcase and/or sell offerings)

- selling direct (skip traditional retail channels and connect directly with customers via, for example, e-commerce can reduce overhead costs, maximise margins and provide cost advantages)

- multi-level marketing (sell bulk or packaged goods to an affiliated but independent salesforce that sells for you; involves sharing the burden of promoting and/or delivering their offerings to the customer)

- context specific (offer timely access to offerings that are suitable for a specific location, occasion, situation, etc)

- cross-selling (offer appealing additional products, services, information, etc that will enhance an experience for a customer)

- diversification (add an expanded new offering or different channels)

- experience centre (create space that encourages customers to interact with your offerings and purchase them through a different (and often lower cost) channel

- non-traditional channels (employ novel but relevant avenues to reach and service customers)

- indirect distribution (use others as resellers who take responsibility for delivering an offering to the final user)

- on demand (deliver goods in real time whenever or wherever they are desired), etc.

NB The above tactics can be used individually or in combination.

Indicators of success are when the organisation

- delivers its offering to customers differently from industry competitors

- uses different channels in complimentary ways, such as showcasing offerings in retail outlets but delivering through direct or virtual channels

- customers inform each other of memorable interactions with the organisation

- other players (like partners, customers, competitors, etc) help sell or deliver the organisation offerings.

 Some examples include

- Nespresso (founded as a brand for coffee aficionados in Switzerland, its iconic capsule technology locks customers into the system;

"...uses and integrates an admirable array of channels to make sure its customers get those capsules as easily as possible..."

Larry Keeley et al, 2013

Some channels include

    i) around 300 unique, worldwide, retail stores and coffee shops

    ii) operates kiosks within partner stores like Macy's and Bloomingdale's

    iii) direct, online ordering channel for coffee

    iv) business-to-business solutions by partnering with hotels like the Ritz-Carlton, Hyatt hotels and resorts plus hundreds of star-rated chefs, airlines like British, Luthansa, Qantas, etc

    v) links with the elite groups like chefs and sommeliers who want to learn about coffee and how to harmonise it with food and wine.

- Nike (Niketown stores are designed to provide an impressive, immersive experience to customers like providing treadmills so that customers can try running shoes, hiring employees who were, or are, professional athletes)

- M-Pesa (a joint-venture between Vodafone and Safaricom that allowed Kenyan residents to deposit, send and withdraw money using their cell phones and simple SMS messaging.

"...By the end of September 2012, the service had more than 16 million active users and 70 million agents across eight countries throughout Africa..."

Larry Keeley et al, 2013

 

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