Packaging has defined how modern and informal retail works. The entire system is centred around packaging, from displays, pricing, shelving, distribution, returns and more. Consumer purchasing behaviour, the way we promote goods (2 for 1), how check-out works, all link back to packaged goods as the “atoms” of modern retail. So with plastic waste and single-use packaging being responsible for 40% of all plastic production, it’s a systemic challenge to make significant change. Consumers are demanding smarter solutions and less packaging, but retailers and brands are struggling to find the way forward because it is a complex system, not just a single point solution.
First developed for the informal market, where smart dispensing can increase affordability and food safety, we were excited about the ideas potential scalability at formal retail too (read more about our experience in the informal market here).
The smart dispenser concept provides an insight into the future of retail. They benefit retailers, consumers, FMCG product manufacturers and the environment. Consumers are enabled to purchase the quantity they need and take their purchases away in their own container, use a disposable paper bag or purchase a container.
Through IoT-based technology, the smart dispenser shows their purchase cost as they dispense on a screen. The same sensors provide real-time stock levels to both the store and the manufacturer, simplifying restocking and distribution.
If you can imagine how the customer shopping experience, payment experience and retail back-end systems change when you have a store with 300 or more smart dispensers for all dry goods (powders, grains, single purchase items) and liquids, it is a profoundly disruptive idea – like ordering a car on your smartphone was 10 years ago.
The smart dispensers allow retailers to offer their customers a packaging-free purchasing experience at scale, while at the same time increasing the effectiveness of their floor space through vertical stacking and real-time stock levels per dispenser. FMCG manufacturers can reduce their packaging costs by being able to ship in bulk to retailers and use the data generated by the smart dispenser to manage re-ordering and distribution more effectively.
One of the by-products of a connected world is that the services (SaaS) we choose to use, having a greater value for us the more connected they are to other services/products. We are shifting from a product & platform (OS-centric) world to an ecosystem world. This has a huge impact on how you design products for success.
Take Slack as an example, Slack grew rapidly even though there were a number of competing services available at the same time. Slack did two things really well
- They designed the sales process to be focused on product qualified leads vs sales qualified leads (this is a topic for another post)
- Slack’s strategy was to be connected to as many other services in the User’s ecosystem as possible, and to become the launching point of interaction between these services.
Slack’s strategy was not just a customer experience, but also a simple API (even the their bot is an API) that enabled them to accelerate their importance in the user’s ecosystem.
Products/services that want to be truly engaging, need to aim at persistence. This means designing beyond user usability into a background connected data stream that feeds into other services. In a SaaS world, you need to think beyond your user interfaces to your application programming interfaces (APIs).
A Persistent user’s behavior is often invisible to them. Once you have the users engaged and using your service, your key aim must move to designing services that other services can consume in the background – thus deeply ingraining yourself into the user/customers ecosystem, which reduces the risk of switching and increases your power/value in the user’s ecosystem.
This means not only designing for simplicity of integration, it means having a strategic view of what the total ecosystem could look like, and where you fit into it.
This strategic analysis needs to consider whether you are a feature, a platform or a service.
A feature in the SaaS sense solves a very specific set of problems but does not own the data, i.e. it does not originate it, nor does it own the endpoint where the data is transformed into something else. Data includes users, source files, logs/analytics etc. a feature is continuously in danger of being designed out by its partners i.e. services upstream and downstream add the feature into their service and thus reduce the need for your offering.
A platform provides a base for others to develop services or features with it, traditionally they are technology-based, encapsulating a wide variety of reusable functionality that is generic but complex enough that recreating it is too hard to undertake on a project by project basis.
A service owns either the input or exit points of data and undertakes a key set of transformations to increase its value via bespoke functionality. Sometimes, this data can be proprietary increasing its value, sometimes it can be connectors or integration points. Licenses, like banking & telecoms or preferential/exclusive access like Oracle’s data cloud, provide these services with long-term market power – even while they may seem to be becoming utilities.
While you could monetize at any point along this continuum, the drive should always be to increase market power through asymmetry of access to data you control. In a world where connection to other services is a key benefit – controlling this as tightly as possible becomes a strategic requirement. Where does this leave you?