ICA Onli: A Design Driven Strategy For ICA
Contributors: Ronald Clays Kevan D’Agostino Davide Gianni Julia Märak Leffler Laura Soto, Layout Kevan D’Agostino Graphic Figures Laura Soto Typography: Din Next Chronicle Text University Of Gothenburg Design, Strategy And Innovation Ica Sweden Gothenburg, Sweden
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1 INTRODUCTION
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1.1 1.2
RESEARCH CONTEXT REFRAMED STATEMENT
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2
DESIGN STRATEGY
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2.1 2.2 2.3 2.4
WHAT IS A DESIGN STRATEGY WHAT IS A DESIGN DRIVEN STRATEGY HERE? HOW DOES THIS RELATE TO INNOVATION? THE EFFECT OF TECHNOLOGY
3 4 6 6
3 CONTEXT
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3.1 3.2 3.2.1 3.2.2 3.2.3
CURRENT CHALLENGES FOR ICA ECONOMIC LOGIC/BUSINESS MODEL Business Analysis (Business Model) Brand Recognition Private labels / ICA Brand Products
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ICA ONLI
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4.1 4.2
STRATEGY STATEMENT PROPOSED SERVICE AND OPPORTUNITY FOR ICA
4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.3
User Experience Showcasing ICA Private Labels Brand Meaning Sustainability Clearer Marketing and Branding Customer value INTERNAL/EXTERNAL PERSPECTIVE
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MOTIVATION OF RESULTS
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PRIMARY RESEARCH 5.1.1 Observations 5.1.2 Questionnaire 5.1.1 Interviews 5.1.1 Precedence Review 5.1.1 Co-Creation Methods 5.2 SECONDARY RESEARCH 5.2.1 Market research
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6 CONCLUSION
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7 REFERENCES
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5.1
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1. INTRODUCTION
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he text you are about to read aims to develop a design-driven strategy for ICA Sweden, preparing the company for a digital future in grocery retailing. ICA has an increasing interest in the new radical changes of the industry and can’t afford to be caught unprepared for the upcoming digital future. This presents some new challenges for the existing organisation that has been a leader in the market. Our three year strategy focuses on using the best of the existing ICA organization to offer a new service to its customers without losing ICA’s core values and vision. We immersed ourselves in academic literature, design methods, market research and lectures that gave us insight into some of the challenges ICA is facing, as well as tools and theories that helped us approach and reframe this problem. In the following pages we will present the reader with an overview of the ICA Onli service, the process of how we came to its conclusions as well as some of its opportunities within the context of ICA.
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1.1 RESEARCH CONTEXT ICA Sweden is part of ICA Gruppen and is Swe-
The company is aware of the global health trend in
den’s largest grocery retailer with a market share
the food sector, and they have the existing chan-
of about 36% (ICA Gruppen, 2016). Dating almost
nels and market to make it a profitable and solid
a century back, ICA is a well-established brand
business that complements their existing retail
name among Swedish households and a profitable
business. (Lindqvist, 2016)
enterprise in a competitive market. ICA Sweden is founded on the so-called ICA Idea; allowing
• Strategic themes and priorities for ICA:
independent retailers to join forces to achieve
• Strengthen customer loyalty and brand position
economies of scales in purchasing, marketing,
• Strengthen and expand their customer offering
logistics, etc. The independent retailers in turn, own the corporation and the core values govern the operation: simplicity, entrepreneurship and commitment.
• Develop and broaden their channels • Simplify their business • Engage and develop their people • Excel in corporate responsibility
Their vision is to make every day a little easier and their mission is to be the leading retailer focused on food and health. Today, the company offers online shopping services based on location (meaning you first choose the store you buy from), prepacked grocery bags and an extensive health section in their online platform which covers a comprehensive archive of recipes, articles and tips about health, training, mental well being and an app called Hälsorabatt that allows users to receive 0.5% discount on selected healthy products for every kilometer the user walks or runs. ICA’s position in health is also visible in their strategy: they acquired Apotek Hjärtat, Sweden’s largest privately-owned pharmacy chain in 2015 with a market share of 30% (ICA Gruppen, 2014).
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Figure 1. ICA Sweden Structure: Stores & retails sales (2014). ICA To Go has no retails sales data. Source: ICA Gruppen 2014
1.1 REFRAMED STATEMENT
How might we develop a more user focused, sustainable online experience that centralizes ICA (Sweden), empowers brand loyalty and benefits both the online and independent retailers? 2. DESIGN STRATEGY 2.1 WHAT IS A STRATEGY? It’s hard to think of approaching any project with-
can help implement change, describing a major
out some sort of strategic vision that aligns with a
business as a quantitative amount of iron filings,
company’s vision and mission. Coming up with a
each one representing an employee; if you scoop
strategy is not an easy task, however Collis & Ruk-
up the filings and drop them onto a piece of paper,
stad (2008) stress how important it is to create a
they’ll be pointing in every direction. This means
strategy statement that is both clear and effective.
numerous intelligent people, working hard and
They have a metaphor for how a strategy
making what they think are the right decisions for
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the company, usually end up being confusion. He
way that produces value for society by addressing
describes that a good strategy can be like passing a
its challenges”. The authors state that firms can
magnet over those filings, resulting in alignment,
achieve this by “reconceiving products and mar-
and most importantly “it allows everyone in the
kets, redefining productivity in the value chain,
organization to make individual choices that
and building supportive industry clusters at the
reinforce one another,” rendering everyone more
company’s locations” (Porter and Kramer, 2011).
effective (idem, 2008). In the context of ICA and this project in particular we are working from user
We believe that building supportive industry
experience; with this in mind it’s difficult to imag-
clusters, is what ICA is already working on, for
ine a strategy that does not directly affect the user
example by collaborating more on produce from
and the value they receive.
Swedish farmers and also bringing more organic products available for their customers, while also
Mannervik (2016) speaks about organizing a
being a pioneer in terms of reducing food produc-
system of different actors when he talks about
tion, climate and environment good practices.
value creation systems that revolve around collaboration and not competition. This relates to create value, and not only money, and where cus-
2.2 WHAT IS A DESIGN DRIVEN STRATEGY HERE?
tomers are viewed as co-producers, a role that has
Normann & Ramirez (1993) describes strategy as
become more about being a collaboratively actor
being the art of creating value, but it can also be
instead of just being the receiver of a product.
seen as a practice (Rylander, 2016). In practical
a strategy paradigm, which actors are willing to
terms, design becomes key when considering the The value creation system approach, focused on
how to do part of strategy; this is where design’s
the client’s context as the reframing area, is an
role becomes relevant. Designers are taught to
important facet. In this context we see that in the
always create with the user in mind, whether for
case of ICA, a numerous amount of interactions
a product, application, or system, they put them-
happen and sometimes a lack of connection can
selves in the shoes of the person they are designing
bring new value to the customer. According to
with or for and in doing so, they become the bridge
Porter and Kramer (2011), businesses can over-
between the problem and the person (Kimbell,
come the narrow and out of date approach to
2011).
value creation by bringing business and society’s purposes in line and creating what they refer to as
It is also important to highlight that design “never
“‘shared value’— generating economic value in a
stand alone for itself” as authors Zec & Jacob
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“Designers will have to become proficient at aligning the needs and capabilities of markets, technologies, and businesses” - Hargadon, 2005
point out (2010, p. 120) . Being connected with other parts of the business itself makes design a competence that can translate into a strategy. The authors explain that strategy development in design, moves between two extremes: Difference (design strength) and identity (design continuity). Ideally speaking, this contradiction should be in balance. The design strength of a company stands for the innovation strength in or with design. It concerns a product-related measurement that also provides knowledge about the company’s design potential. Design strength suggests the differentiation potential in product development, since those who demonstrate strength are able to stand apart and be differentiated from the competition. Design continuity builds, strengthens and makes design
Figure 3. New network venture (Hargadon, 2005)
visible. Something is created in which customers are willing to trust - because it feels familiar and is linked to positive experiences.
that focuses on the user in order to understand its needs and wishes, but also one that builds a
Design has to do with playing with possibilities
network of values and actors around it to support
to reach a goal, and as a result, the design process
the design proposal. The opportunities that come
will have to include not only a designed product
to light through qualitative design research can
or service, but rather an entire venture: One that
be linked with the traditional business strategy.
values each partner in such a network, as well as
Taking into account several actors and not just
how it will evolve; in order to achieve such a result,
the end user, ultimately promoting collaboration
Hargadon (2005) mentions that “designers will
among these actors allows firms to create com-
have to become proficient at aligning the needs
petitive advantages in their respective industries.
and capabilities of markets, technologies, and busi-
Collaboration of actors is key within a design
nesses” (see figure 3).
driven strategy, as well as focusing on the “strength of the links between [them] and the quality of the
We can define a Design Driven Strategy as one
interactions among them” (Verganti, 2006, p. 118).
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Politecnico di Milano. This way it is possible to create a design driven strategy that is built on a common ground that
The author focused on the Italian firms that work
connects and benefits the customer as well as the
strategically through design and by broadening its area of interest he found out that companies that chose to make long term investments in innovation and well-designed products developing a stronger result in the long run than their competitors who place little or no value in design. In fact there are two possible levels of innovations: improvements that better satisfy the existing definition of value or new directions that arise after reinterpreting the problems and redefining what customers values are (Verganti, 2016). Design allows firms to radically innovate the meaning of their products and enables the creation of new values for the customers from the existing ones (Verganti, 2009).
Figure 4. Meaning priorities (Shedroff, 2016)
Good examples of this process come from Alessi, company and its employees. Shedroff’s (2016)
Artemide, Fiat Panda, Nintendo and Apple, show
diagram (figure 4) helps in terms of understanding
that the design process of investigation into the
this, and is of great importance as he shows how
possible meaning of their products gave them
to reach a strategic focus and differentiate from
a strategic advantage on the competitors and
competitors within the market.
resulted in possibly longer lasting products, or so called ‘classics’. Design-driven innovation is better at capturing broader changes in culture, society
2.3 HOW DOES THIS RELATE TO INNOVATION
and technology because of its approach of looking
Innovation is a broad concept that, like design,
existing trends with a broad perspective on the
is a noun and a verb. “[Innovation] signifies both
subject. Companies that follow a design driven
the output and the activities involved in creating
strategy are better able to innovate, offering new
the innovative output” (Carlgren, 2016) and can
radical meanings to the products and adding value
be interpreted as “the process of turning oppor-
to the products for the customers (Verganti, 2009).
into the long term phenomena and not following
tunities into new ideas & concepts that succeed in creating substantial value” (idem, 2016). For this project we focused on promoting innovation
2.4 THE EFFECT OF TECHNOLOGY
through a design-driven strategy, a process that
Technology has been a major factor in the trans-
has captured an increasing interest through the
formation of several industries and has changed
community of innovators in the past decades
the way we listen to music, how we read books
and that has been the subject of the investigation
and how we access media among countless others
from an Italian professor, Roberto Verganti, of
(Nielson, 2015). However one of the most affected
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by this digital shift is how we shop for items. The online shopping industry has grown substan-
3. CONTEXT FOR ICA SWEDEN
tially in recent years and other industries such as grocery retailers are currently making use of the
3.1 CURRENT CHALLENGES FOR ICA
current demographic and maturation of the digital
As of today, ICA Sweden has around 1,300 stores,
natives as a key aspect of their success (idem,
all of which are independently owned and oper-
2015). As well, users are willing to adapt to this
ated. Although ICA has built their legacy on a
online mindset as Nielson (2015) in his worldwide
business model that depends on locality and inde-
survey points out that one-quarter of the online
pendence, the act of grocery shopping has begun to
respondents say they order grocery products
change as the digital market has opened up for sev-
online, and 55% are willing to do so in the future.
eral new competitors and new ways of approaching this area. Today, one of the largest challenges we
Christensen, Kim and Mauborgne (inventors of
see for ICA is their inability to centralize their
“blue ocean strategy”) have shown that the large
existing store locations to create a unified online
changes in society and technology have the ability
customer experience. This is due to the indepen-
to challenge the conventional understanding of
dence the organization has established, allowing
what is valuable (Verganti, 2016). As the mindset
individual store owners to decide whether they
of users move from being weary of large data, to
want to offer online services, which products to
expecting their data to be used towards something
sell and how they manage their communications;
personalized, the perception of value changes
this has resulted in a fragmented and broken
(Lindqvist, 2016). As organizations make attempts
system that has created confusion when migrating
at making their service more user-centered and
online. We noticed that to order online, the sys-
personalized for their customers, they also benefit
tems vary so much, that customers would actually
in doing so as significant economic value is gen-
experience a different ICA depending on where
erated as a result of the engagements people have
they were located in the city. We believe that this is
within these digital spaces (Nussbaum, 2013).
avoidable, especially coming from Sweden’s most cherished grocery retailer. We also believe that this
Although the digital world has not yet taken over
is crucial as although ICA may establish 36% share
the physical, it can be said that the roles have
in Sweden’s grocery market, with online shopping
switched in terms of who is leading the other;
catching on quickly, ICA may not be in competi-
instead technology is now the driver and is ahead
tion anymore with other retailers in Sweden, but
of us in terms of the possibilities we can achieve
instead with larger and more prominent players
(Carlsson Reich, 2016). However, when it comes to
like Amazon, who have recently established their
technology being an agent for change towards the
own online grocery platforms.
better, Verganti (2016) says that to see which ideas truly have potential, managers need new assess-
Looking at the past success of e-grocery concepts,
ment criteria which helps them understand these
change has been more evolutionary than revolu-
changes.
tionary, however digitalisation is redefining what it means to go grocery shopping (Nielsen, 2015). Due to the digital maturation of generations, specifically Millennials and Generation Z, the
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“Brands are the Narrative Frame of the business and the Engagement Frame with consumers. In fact, brands are simply the commodification of meaning.” - Bruce Nussbaum, 2013 lines between the physical and digital worlds are blurring; “These users are growing accustomed to
3.2 ECONOMIC LOGIC/BUSINESS MODEL
the benefits of digital in other retail settings and are beginning to expect them in grocery as well”
3.2.1 Business Analysis (Business Model)
(Nielsen, 2015, p. 4). Creating an environment
Looking at the online food retail offerings and the
is key to this success, and competition is sprout-
existing firms already operating this market in
ing up from companies that leverage technology
Sweden (Mathem.se, Linas Matkasse) we can see
to enhance the shopping experience and meet
that business are growing exponentially. However
consumers’ evolving desires. One example of this
it is still difficult to predict the structure of costs
is “Instacart,” an online service that facilitates the
and profit of these services because they are still
user’s ability to order online, schedule food deliv-
on a process of expansion and affirmation. For
ery directly to their doorstep, all within the same
these reasons we are not able to show the reader
platform. Companies like this have no overhead,
any deeper analysis on this, but we want instead to
can use big data and leverage other competitors
focus on the benefit to ICA in terms of brand rec-
inventory to come up with the best prices for their
ognition and evolution. In the next paragraphs we
customers, while also offering their delivery ser-
will show how our strategy aims to use the existing
vice to some of the biggest retailers in California,
resources of the organization for a new cohesive
like Whole Foods and Costco.
service to the customers that meets their values and expectations.
Although there are challenges involved with ICA’s current business model, we believe there is an
All of this is going to be pursued considering the
opportunity for them to expand into the online
existing guidelines of ICA’s strategy in terms of
market by focusing on user experience, centraliza-
cooperation between the company’s operations
tion, brand loyalty and a new business model out-
both strengthening the Group as a whole and the
side of ICA Sweden that benefits both the online
individual companies.
and offline experiences. ICA’s legacy is a major factor on their side, and it will be an important asset when they plan to implement a more struc-
3.2.2 Brand Recognition
tured online experience. In the paragraph below,
ICA’s good reputation has always been a key factor
we will inform the reader on the strategy we have
in the company’s success and it is a strategic asset
set out, and how we plan on achieving this through
for the future growth of its business. As mentioned
our proposed service.
in ICA’s Good Business guidelines the company
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is driven by profitability and high ethical stan-
ICA Onli would be especially good for this purpose
dards; their policy is focused on listening to its
because of the centralized structure it would elimi-
customers needs and it is committed to ensuring
nate any problems with marketing, where offering
them with products that are both safe and of high
products that may differ from store to store would
quality. The company promotes a healthy lifestyle
no longer be of issue. Instead ICA Onli could use
and it’s moving forward to a sustainable future
the company’s powerful media to enhance the
development (ICA Gruppen, 2014). For example,
brand’s recognition among the customers and
in 2014 the company entered into a partnership
enhance what its labels stand for. We also think
with the Federation of Swedish Farmers (LRF)
it is a pivotal moment for ICA’s brand to gain the
with the objective to expand the offer of Swedish
reputation for being part of the digital movement,
products in its stores. ICA believes that an increase
and not stand behind some of the more digitally
in the sale of Swedish food and its commitment to
literate competitors who are now in direct compe-
supporting development and growth in Sweden’s
tition. The company would therefore offer a clear
rural areas will allow its label products to expand.
image of its intentions for the future to its cus-
From its historical association with meat, the
tomers, building a world together with those who
label is going to include more and more products,
share the same ICA philosophy, enforcing brand
including cheese, milk and frozen vegetables (ICA
strength and increasing the customer’s trust and
Gruppen, 2014).
loyalty for the future. Moreover this would have an important effect on the stores because customers
During the years ICA has also seen customers
would better know the qualities of the ICA private
increasingly prioritising sustainable options; in
labels when going to buy groceries in the existing
its annual report, the sale of organic products
brick and mortar locations. We believe that online
increased by 55% (2014) as well as a significant
and offline strategies could match with a positive
sales growth of label Fairtrade products (ICA
effect on both underlining how a digital expansion
Gruppen, 2014). We believe therefore that it would
wouldn’t compete with the existing stores, but
be wise for the ICA brand to continue supporting
instead help them to face the existing change.
these sort of initiatives within its online expansion to ICA Onli; the ICA brand should focus on promoting this image of a local, sustainable label in
3.2.3 Private labels / ICA Brand Products
order to increase loyalty among its customers.
In terms of private labels, the usual assumption is that private label consumers only care about a lower price, as products are usually perceived as a
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ICA GOTT LIV. This trademark focuses on offering healthy choices and provides balanced and attractive options for the customers who want to carry out a healthy lifestyle and diet. It includes fruits, vegetables, fresh fish, nuts, snacks and even vegetarian alternatives for meals. (see figure 5)
ICA Affordable and good quality products that have a wide array of options that follow ICA’s high quality and taste standards. Fresh fruits, fish, grains, juices, conserves and more can be found under this trademark.
lower quality. However, recent research shows that private label “super consumers” (consumers who buy a lot of private label products) buy these products because of an affection to a specific label and feel a deep level of pride in being a private label consumer (Yoon, 2015). In the US market, according to Yoon’s (2015) research, this type of consumers represent 40-55% today of total sales for the retailer and represent an important asset for the manufacturer. We believe that this could also be the case for ICA in Sweden given the brand’s strong
ICA I LOVE ECO ICA’s own organic line, which is constantly being developed and offers a wide range of food and other home goods that are produced in a way that do not affect the environment and forbid certain practices like, genetic engineering or chemical pesticides among others.
recognition in the country. In 2014, ICA private labels accounted for 22.7% of sales in Sweden, an increase of 1.2 percentage points compared to the previous year and the company launched 420 new private label products, many of which were in the
ICA SELECTION This range of products are especially selected by ICA and are of the finest quality made of first class raw materials and include food and non-food products like cookware. ICA carefully checks all products and the practices of making them thoroughly before placing the ICA logo on it.
fresh foods segment (ICA Gruppen Annual Report, 2014). Today the offer of ICA is synthesized into 9 trademarks (see sidebar) that fill almost every need with an assortment that includes food and non-food
ICA BASIC This is the cheapest range available, yet they stand up to ICA’s standard quality requirements. By using simple packaging and large volumes, these products can remain the lowest in price.
ICA SKONA These eco-labeled products were developed for over 20 years to protect both the environment and the user. This line of products are for cleaning with the environment in mind.
products. Their food assortment goes from meat, frozen fish, gluten free products, Swedish dairy produce, lactose-free and protein-free products, meal drinks and even genuine artisan food like ICA God smak (ICA Sweden, 2016). With such an enormous and diverse offer, the ICA trademarks and their assortments connect with their customers on different levels depending on
ICA COOK & EAT Affordable and high quality cookware and gadgets for the kitchen with a wide range of glassware, utensils, towels, pans, pots etc. This line carries a basic range of products also offering seasonal series to inspire users.
their food preferences, their allergies, their rela-
ICA HOME
of quality certified suppliers for their private label
This product line carries one of their broadest ranges of home products from bedroom, bathroom and additional products for cleaning, laundry and storage.
tion with the environment, or even their budget. In terms of quality and price, both important in the grocery retail market; ICA Gruppen has 83% products. This is an important operation target for the company and the sustainability of their business (ICA Gruppen, 2014) and represent a great
ICA GARDEN This range of products has a variety of garden products all with excellent performance and stylish design qualities.
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asset for a company that looks at its brand not as the cheapest alternative but as the best offer in
Figure 5. ICA Gott Liv Product Arrangement. Source: ICA Sweden terms of quality; considering the term “quality” for ICA has many different aspects, including product safety, animal welfare, content, taste, labeling and traceability. Additionally as part of ICA’s six strategic themes, the private label products are a major asset regarding their brand positioning and recognition as ICA Gruppen is working on further developing their private label products, which give customers better value and contribute to a unique product range (ICA Gruppen, 2014).
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4. ICA ONLI 4.1 STRATEGY STATEMENT
“ICA Onli aims to be an online service that offers a more user friendly experience for customers to shop for groceries and other items through a centralized digital platform” When creating our strategy statement, we referred
that ICA Onli is focused on strengthening the ICA
to Collis & Rukstad’s (2008) definition of the three
brand while creating a seamless experience to the
critical components they believe make up a good
user. ICA Onli caters a (digital) ecosystem in which
statement: objective, scope, and advantage. In this
all existing health services provided by ICA will
definition, the objective refers to the “ends,” the
be mixed with new ones depending on the user’s
scope to the “domain,” and the advantage to the
preferences. Aiming to present a more meaningful
“means.” As well, this statement must differ from
experience, ICA Onli will feature online grocery
ICA’s already existing Mission and Value statements
shopping, but also also other food/health related
and must define what ICA’s competitive game
services that will strengthen ICA’s position in
plan will be (Collis, 2008). the moment we believe
health with their customers.
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Figure 6: Proposed structure of ICA Onli
4.2 PROPOSED SERVICE AND OPPORTUNITY FOR ICA
to their users regarding their offerings and visions
Most organizations can make the shift to online
explain further into some of the key aspects of
quite effectively and effortlessly. However, ICA’s
the service and its benefits, and how it relates to
situation is a bit more challenging as they have
the opportunities set forth in this design driven
always been independently owned and operated,
strategy.
for service. In the following paragraphs we will
making the leap online more difficult. Currently ICA has five store varieties categorized under ICA Sweden, which is a segment under ICA Gruppen,
4.2.1 User Experience
also including ICA Banken, ICA Real Estate, Apo-
This new service is an opportunity for ICA to
teket Hjärtat and other operations. For our pro-
create a unified online experience that focuses
posed service we decided to create an online digital
on user experience; giving customers one place
service called ICA Onli that will fit as another
to shop for groceries, recipes, receiving healthy
segment of ICA Gruppen (see figure 6). We see the
advice, and many other personalized features such
main areas of our service focusing on user experi-
as: budget tracking, nutrition tips, loyalty points,
ence, how well the service works in relation to the
weekly deals and information on local and sustain-
user’s wants and needs; Showcasing the ICA brand
able food options; this would be set by allowing
by selling only ICA trademark products, which
users a space online that they can personalize
promise a better profit margin to ICA Gruppen;
themselves. Instead users move towards an online
Brand Recognition, by creating a more unified
experience that includes features that may also
experience and a spotlight on ICA private label
complement this online shopping experience. Our
products, this will help to create more acknowl-
proposed solution in no way wants to compete
edgement around ICA’s brand; Sustainability, not
with existing ICA stores, instead it facilitates
only from the standpoint of financials, but ICA’s
online orders that come from customers in a clear
opportunity to continue showcasing their most
and effective way and through an entirely sepa-
locally produced food and highlight key members
rate distribution channel. Users will not need to
of the community who contribute; Clearer Mar-
worry about inventory or varieties of offerings as
keting and Branding, by providing their users with
they would be consistently available and ICA store
a more cohesive message in both their marketing
owners will not have to adapt or bear the costs of
and advertising will help provide this clarity back
this service. ICA Onli may also offer personalized
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information based on data collected through
will discover the efforts of the company in order to
loyalty cards and shopping habits, which in turn
promote a sustainable future for grocery shopping.
would help create a more customized and tailored
We see this as a very crucial point in ICA’s time-
experience for individual users; for example, if
frame. ICA is now being challenged by competitors
customers want to see more recipes, weekly deals
outside of the traditional shopping market and the
and track their budget, statistics around this infor-
company is asked to re-confirm its image for their
mation will help tailor for example, recipes that
customers. By establishing their online presence
are based on not only shopping habits, but around
in a recognizable and efficient way will be the
daily deals and the user’s individual budget.
difference between ICA becoming a leader and a laggard.
4.2.2 Showcasing ICA Private Labels The proposed solution would only carry ICA
4.2.4 Sustainability
Private label products including ICA Gott Liv, ICA,
With this direction, we believe that ICA also has
ICA Loves Eko, ICA Selection, ICA Basic, ICA
the opportunity to focus their image and products
Skona, Cook & Eat, Home and Garden. Because
towards several directions including sustainability,
ICA offers such a wide variety of items, we want
local food offers and healthier options all benefit-
to help showcase the power of the ICA brand and
ting economic sustainability and the bottom line,
the added services they provide. We believe this
as ICA products warrant better prices (for the end
to be beneficial to our strategy as ICA has such an
customer) and better margins than comparable
impressive depth in their offerings. More so, ICA
A-brand products. Also being one of ICA’s strategic
Gruppen currently has private label products as
themes, private label products help give customers
a strategic theme and a priority to their vision, as
better value and contribute to a unique product
they believe it gives customers better value and
range (ICA Gruppen, 2014). Sustainability could
contributes to a unique product range. In the
also be understood as environmentally sustain-
report we touch on the misconceptions of private
able. About half of all ICA’s private label products,
label products, and how these labels can actually
besides their fruits and vegetables, are produced in
be a major asset in a grocery stores’ repertoire.
Sweden. This statistic supports our vision that ICA can be a leader in this area, and where the online service can help support this area. Some of ICA’s
4.2.3 Brand Recognition
labels are produced in cooperation with smaller
By focusing solely on ICA private label products,
companies and local producers, which offer their
we believe it will help drive ICA’s brand recog-
products in a way that benefits several of the
nition by strategically placing their name at the
actors in the value creation network (ICA Sweden,
centre of the service, showcasing the diversity and
2016).
selection offered within their product line. By creating a unified and clear product for the user, ICA will create value and a consistent online presence
4.2.5 Clearer Marketing and Branding
for their users, which, in turn, will also directly
By not having to coincide with existing storefronts,
affect the “off-line” stores. ICA’s customers will
ICA Onli will also be able to create marketing and
better understand what ICA’s brand stands for and
advertising that are unified and consistent with
15
“People need their interactions with technologies and other complex systems to be simple, intuitive, and pleasurable” - Kolko, 2015
their offerings online. Instead of just an online gro-
assumption that ICA’s strong position within the
cery store, we see ICA Onli as an online experience
Swedish population and the heritage it carries
that offers features to a wide range of customers
gives them an advantage in terms of trust and per-
who plan to shop with ICA. We believe that for ICA
ception with the customers. We consider this a key
to stay the leading retailer in Sweden, it needs to
aspect, because building trust is an important part
develop a clear message to their users.
of a business and it needs constant work and not to be taken for granted (Carstedt, 2016). Through our analysis, we saw that ICA already nurtures their
4.2.6 Customer Value
relationship with their customers through several
A study conducted by Forrester Research shows
ways: with their loyalty program, recipes, person-
that we are living in the “Age of the Customer”, one
alised discounts, health advice, organic products
where power comes from engaging with empow-
and by setting high quality standards and sustain-
ered customers” (Carlsson Reich, 2016). In this
able practices.
age, different user expectations emerge due to the digitalisation of our societies, homes, industries
However, our research pointed out the current
and also into a more personal level. Knowing what
fragmentation of the offline (in store) and online
these empowered customers expect and want
experiences. One of the pillars of our strategy is
might seem like a challenge. Nevertheless, Ver-
the collaboration and creation of value, so by inte-
ganti (2106) mentions that powerful approaches
grating current services and resources from ICA
like design thinking and crowdsourcing have given
we aim to provide a more seamless and cohesive
companies tools to obtain concepts or ideas from
experience for the user that could help to increase
internal and external sources, such as customers,
the brand loyalty online as well.
designers and even scientists. But at the end of the day, making sense is still vital for people, and
With the help of design thinking and co-creation
more specifically in this digitalised era: “ people
methods we were able to gain knowledge to build
need their interactions with technologies and
a network of services that speak to the customer
other complex systems to be simple, intuitive, and
in a more meaningful way while keeping the core
pleasurable” (Kolko, 2015, p. 68).
values of ICA and their vision of “making every day a little easier” central.
ICA is aware of this digitalised ecosystem, which their customers live and breath, and where their
Shedroff (2016) states that aiming for meaningful
role is more active. Our strategy rests upon the
values increases the probability of success because
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it is focused on the relationship with the customer.
sustainable image of the company will increase the
Rather than solely focusing on grocery shopping,
trust on ICA’s products.
we focused on offering a meaningful experience around helpful services related to it as described in section 3.3. By doing so, we are addressing customer needs not only in a functional way, but
5. MOTIVATION OF RESULTS
by creating value through extra features other than basic grocery shopping. Also, by offering only
5.1 PRIMARY RESEARCH
ICA private label products we believe that the
We have used different ways of understanding the
relationship and loyalty with their customers will
customers’ wants, needs and attitudes concerning
strengthen them more within a digital ecosystem.
grocery shopping and shopping for food online in particular. In order to create a digital service with the customer values in focus we used both quan-
4.3 INTERNAL/EXTERNAL PERSPECTIVE
titative methods (conducting an online survey)
ICA Onli service will fit into the existing organi-
an online shopping journey within the team, user
zation and is planned to use the resources already
testing and co-creating methods to dive deeper
present in the company. We imagine the service
into what would make the customers use an online
to work in cooperation with existing warehouses
shopping alternative and how we could create a
and the company’s network to deliver the products
service that makes them want to stay loyal.
as well as qualitative research, such as interviews,
to the customers. We believe that because of the limited time horizon of our strategy we should
By combining both qualitative and quantitative
base this new service on the existing ICA ecosys-
research and looking for answers through differ-
tem. This could diminish what we now experience
ent questions, “we gather more dots of knowledge
as a fragmentation among the services ICA offers
that are so essential to creating” (Nussbaum, 2013,
today. The parallel process of enhancing the brand
p. 55), as Nussbaum states when he talks about
recognition would benefit the company as a whole
immersive knowledge. Diving into different meth-
both within the online and offline experiences. We
ods to make sense thereby helps us to get a wider
trust that these internal changes will benefit the
picture of both customers, ICA as a company, the
final users. In fact, a more cohesive online experi-
context and the opportunities and threats with our
ence is going to enable the customer to better use
digital solution. In the context of design, Ladner
the existing services offered by ICA and the new
(2008) discusses how design is about creating
17
Our group also conducted several brainstorming sessions and analyses inclusing exploring the Business Model Canvas and Value Proposition Canvas to better understand ICA’s upcoming opportunities and challenges.
symbols and how these cannot be translated into
looking at ICA’s own customer segments, they
numbers. With an example of the kitchen stove as
are more categorized from shopping behaviours
a symbol, by looking only at quantitative data (eg.
and interests, rather than age and profession. In
how many households own a stove) we loose the
the market research (see chapter 5.2.1) there are
meanings a stove can represent in a family setting,
statistics based on age, gender, profession and
for example gender roles. In this case, qualitative
such. The outcome of our research can be seen as
research deepens the understanding of what the
guidelines and inspiration in our quest to explore a
stove symbolises (Ladner, 2008).
suitable digital solution for ICA’s customers.
This does not mean that design research should exclude quantitative research. It is a miscon-
5.1.1 Observations
ception that quantitative research only refers to
To understand how it feels to shop for groceries
marketing research or is only relevant at the end of
online nowadays we observed the shopping expe-
research. Quantitative research can be of value in
rience both when trying to shop online from an
every stage of research. The significant difference
ICA Nära-store and from a competitor, Mathem.
between quantitative and qualitative methods
se. The websites are hard to understand if one does
in design research lie in their purpose and usage.
not speak English, therefore, the only Swedish
Quantitative methods allow and are used to make
speaking group member conducted the shopping
clear decisions and cut to the chase. While qualita-
observation/experience. We made a shopping list
tive research methods start out wide and gradually
containing everyday groceries, and one contain-
refine the objectives, quantitative research only
ing less frequent bought products (toilet paper
starts when certain research objectives are already
of a certain brand, ecologic espresso coffee, fresh
defined. (Purpura in Laurel, 2003).
bread and filo dough for example). We used these lists in to compair in selection and navigation
The participants in our research are mostly from
throughout the interface. The journey started with
our own networks as the interviews are made
these lists and ended right before paying for the
with other students at the University. This of
goods. We picked one ICA Nära-store, thinking it
course had an impact on the outcome. However,
was the closest ICA that offered online shopping.
18
“The overall shopping experience was fine, but it did not offer an added value compared to a closer, local ICA Nära” - Julia Märak Leffler, 2016
It turned out, however, that this store was located
With this information we were able to understand
on the other side of Gothenburg, making it less
our subjects more deeply, whereafter we started
convenient to pick up groceries at the store (home
gathering more specific data. Although this survey
delivery was not an option). As the selection was
had only 46 participants, which is not statistically
limited in the ICA Nära store, filo dough and fresh
reliable, it did help us with creating a well con-
bread were not available and some selections of,
structed interview template.
for example magazines, were very limited. The overall shopping experience was fine, but it did not offer an added value compared to a closer, local
5.1.3 Interviews
ICA Nära.
An interview is a form of qualitative research and is an effective way to gather data if the researcher
On the other hand, the website of competitor
wants to gather insight about attitudes, opinions
Mathem.se provided a big selection. Mathem.se
or knowledge. Researchers also interview people
only sells online and delivers at home. Compared
for things they can not directly observe or learn, as
to ICA, their great selection does make it harder to
we can not observe behaviour that occurred in the
navigate through the website. Both websites have
past. Therefore the interview can give insight to
a search tool and categories to choose from, but
the core drivers that create a person’s (shopping)
at Mathem.se one spends a lot of time scrolling
behaviour. To gather more qualitative insight
through the pages. This company also offers fresh
around users who shop online we interviewed
bread, although not on Sundays. Throughout the
4 people on this subject. All participants were
shopping journey, there is clear information about
between the age of 23-35.
deliveries (eg. cost, environmental benefits...) as well as a small and easy check-out process where
Some value the social part in going to the store,
one can overview and change the shopping basket.
and getting an exercise at the same time; some found it important to feel the products (vegetables and fruits) before buying them. One commuter
5.1.2 Questionnaire
said that the delivery times of an online alternative
We made an online questionnaire to gain insight
did not suit him as he needed to be flexible. The
into the customer’s attitudes towards online gro-
same person told us that if it was possible to order
cery shopping. With questions on prior experience
the groceries on the commute and have it deliv-
towards the subject, we were able to gather some
ered when he reaches home, he might consider it.
of the values customers found most important.
For this person, environmental sustainability was
19
Figure 7: Precedence Review of Existing Online Grocery Stores important, saying that he would willingly change
her family as a child. The routine was important,
his shopping habits and try online shopping if this
they went the same day every week and got to taste
was a more sustainable alternative than tradi-
cheese at the deli counter. The same participant
tional shopping in physical stores.
usually shopped in a store nearby and valued the service she got there, with the staff remembering
One person had a onetime experience with online
her and greeting every customer in a friendly way.
shopping and referred to it as a pleasant expe-
Another participant liked going to market halls.
rience as it was time saving, and the fact that he
When asked why, he answered that he cherishes
could decide the ripeness of the fruits and veg-
the knowledge of each sales person. Knowing that
etables he ordered. One participant was close
the products are of high quality and knowing their
to online shopping in a webstore specializing in
origin is important for him. Shopping in market
vegetarian food; she had visited the site numerous
halls makes him feel secure that he gets what he
times, followed the company on social media and
wants without the hassle of having to do prior
even had added the products to the shopping cart
research.
but everytime chose not to go through with the paymen. She told us she got indecisive and that she
In order to give us inspiration when designing
would have to buy a larger amount of products to
our new online service, we invited the partici-
balance out the high delivery costs.
pants at the end of the interview to visualize how they would imagine their ideal online shopping
When we asked the participants to share a memorable shopping experience we got many interesting answers. One remembered going to the store with
20
experience.
Figure 8: Co-Creation Session
5.1.4 Precedence Review
process that gives the opportunity to go deeper
It was important to see how other grocery stores
only when asked for by the user. Getting back
were established online, so our group reviewed 15
on track is functionally and visually intuitive so
varieties of online services from around the world
ending the online shopping process is an easy task.
including some of the more prominent players like Tesco and Instacart. By looking at the competitors
Although features varied from site to site, our
in this area, we were able to point out some of the
group was not able to access all the benefits and to
features that were the most successful and ana-
test the services thoroughly as a postal code and
lyzed the sites from both an interactive perspec-
location in the country was usually required for
tive as well as from a user centered perspective.
sign up.
(see figure 7) One of the big mistakes we experienced in current
5.1.5 Co-Creation Methods
online systems is that they try to address a mass
At an attempt to understand our users more
audience. This universal approach of providing
deeply, we conducted a co-creation session with
information results quickly in an overwhelming
nine participants that focused on their wants and
system that blurs the usability and results in
needs in an online service. (see image 5.1.5A). The
frustration. Websites who manage to overcome
goal of this session was to understand personal
this problem use a minimalistic, clear and guided
features that were important to users and why; we
21
also asked our participants to help visualize this service and provide us with insight that may not have been attained if not conducted in this way. What made this method effective was its ability to gather information on several levels from giving participants the ability to primitively explain their reasonings using pictures to asking them to draw scenarios in which their reasonings came true. The activity started by asking participants to choose 6 of the 10 pre-designed icons, all of which reflected features that were taken from our precedence review and existing ICA services (eg. shopping cart, local food, recipes‌) . The participants were then asked to glue the 6 icons to a grid of 9 squares representing a personalized homepage, and draw the amount of space that the icons hypothetically took up . This helped establish a personal hierarchy and preference for the participant in terms of their space online. After
Figure 9: Analyzing Co-Creation Results
this section was complete, the participant was interviewed about the decisions they made. For
shopping in a physical store and customers expect
example, why did one of the participants feel it
from the company to meet up with both view-
was important to have a feature like “recipes� take
points.(see figure 9).
up such a large space? The insight allowed us to understand how a user might want this space
During the co-creation sessions we saw that
designed that would be extremely relevant in the
people want to be inspired to cook or try new
iteration stages of designing ICA Onli. After the
products. Depending on the personal criteria of
interview was over, each participant was asked to
the individual, searching for inspiration is mostly
draw how they imagined this space would look like
wanted through visualisation of recipes. This
based on the first two steps. This resulted in some
holistic approach gives insight to how accessible
really insightful information, where users were
the customer expects the online service to be. It
both confined by preconceived notions around
means that people are prepared to look for pre
web design, and their ability to imagine a more
combined suggestions in order to skip tedious
experimental solution.
decision making processes. Interestingly, this forms a base that people expect to be personally
After analyzing the nine participants we found that
customized and generated through algorithms
there are mainly two different behaviours that ask
that use data from previous buys. Whether people
for different methods of informing and visualising
value more the price of the product, the sustain-
in the online user interface. These behaviours
ability, origin, nutrition information; customers
are based on the same needs and wishes when
also like an appealing visualisation that answer
22
to these personal criteria. On the other hand people who want to buy what they already have in mind, don’t want the process to take long. These products (eg. toilet paper, toothpaste, etc.) can be predefined and saved by previous purchases and should be easily accessible for fast checkout. Overall, we know that even though their goals are relatively the same, shopping online is different in nature than shopping in a physical store. Whether the customer wants to learn or is looking for inspiration, the online exit process should be as simple and intuitive, at any given time, as walking to the cash register in a physical store. There is a significant difference in the attention span of customers
Figure 10: Source: Svensk digital handel, 2015, p. 14
online than in physical stores because the experience is on a lower level of perception. The design
on the market and the customers. The research
of the interface should take into account this very
is based on a quantitative survey with 2047
fragile connection with the customer’s interest. As
respondents between the age of 18-70. HUI also
an answer to this, ICA Onli can create an online
conducted interviews at businesses in the field of
environment based on personalised interactions
online food shopping (Svensk digital handel, 2015,
with every different customer, creating a familiar
p.2). This report is of value as it helps us to under-
relationship that fits perfectly with the ICA brand
stand the customers better, and gives us a back-
identity and values.
ground to the growth of online grocery shopping within the Swedish market. It provides us with
The biggest insight from this research was that
both opportunities and challenges for when the
people are enthusiastically engaged to create their
food market is going online.
own online service based on personal desire. This co-creation can be a run-up to a deeper research
The report from 2015 sees an increase of 41% when
that explores the possibilities of customized and
it comes to online food shopping. This includes
personalized online services.
ready meals, ready packed grocery bags and “usual” grocery shopping where the customers choose by themselves (see figure 10). As for today, only 1%
5.2 SECONDARY RESEARCH
of the grocery shopping in Sweden is done online, compared to 5% in the UK. The increase since
5.2.1 Market Research
2014 indicates that online shopping will take a
Svensk Digital Handel, a Swedish interest group
larger share also on the Swedish market (Svensk
for digital trade, comes out with a report on digital
digital handel, 2015, p.4). In our case, providing
food shopping each year, the research is conducted
ICA’s customers with a user friendly online alter-
by HUI research. The report targets attitudes and
native is key in order to make ICA stay relevant in
behaviour around shopping, both from the actors
a changing market.
23
Figure 11: Source: Svensk digital handel, 2015, p.13) Change is also an important word when it comes
convenience and comfort as the main values of
to shopping behaviour. The research shows that
shopping online.
once a customer has tried online shopping, it will probably do it again (Svensk digital handel, 2015).
Although, one challenge for a company creating
One challenge for the retailers is to make the cus-
an online shopping experience is that the cus-
tomers try their online alternative. For ICA, the
tomers cannot touch and choose the products for
challenge is to turn the already loyal ICA custom-
itself, vegetables and fruits came on second place
ers into loyal online customers.
of products respondents had bought online. Most common to buy was dry goods such as pasta, rice
The respondents who tried online shopping
and grains. There are many positive answers why
were mainly young. In the age group 26-35 46%
the respondents like online shopping, but it is also
answered that they shopped for food online. This
important to look at the negative feedback (see
number sank to 16% in the age group 56-56. HUI
figure 12). The most negative factor is the delivery
says that although the numbers in this study
cost, followed by higher price levels (compared to a
look low, they are seeing an increase in the older
physical store). Other factors that overrule online
customer segment. There is also a slight difference
shopping are: The pleasure of visiting a physical
between households with or without children,
store, better customer service and of course being
where those with children are more likely to shop
able to pick the products for yourself.
online than those without (Svensk digital handel, 2015, p.10).
From this research we were able to spot three main challenges:
As the chart (see figure 11) shows, when respondents who already shop online were asked of their positive experiences, they pointed out
24
•
Senses: Many customers think it is important to be able to touch, smell and choose the products.
Figure 12: Source: Svensk digital handel, 2015, p.17
How can an online experience meet these needs?
have tried digital shopping would recommend it
• Delivery: how can the food retailer provide a delivery service that is both flexible and at a good price (for both the online store and the customer). • Behaviour: How can a grocery store make the customers try online shopping? (Svensk digital handel, 2015, p. 7)
to others, “ambassadors” could play a key role in the shift to online shopping. (Svensk digital handel, 2015, p.28)
6. CONCLUSION ICA Gruppen is looking into the radical changes
In our work process, knowing what would make
that occur within different industries and it is
customers try online shopping is also valuable
investigating the future of grocery shopping within
information when creating the actual service.
the Swedish market. Our service ICA Onli aims to
Factors to consider are: Better selection, delivery
set a new path for the company’s digital strategy,
in areas other than the larger cities and discounts.
solving the current fragmentation of its online
46% Of the people who have no online shopping
services and enhancing the brand value of ICA.
experience answer that they are not interested
ICA Onli is a centralized platform, selling only ICA
in online grocery shopping. This means one of
trademarks through the existing distribution chain
the major challenges is to design a service that is
to value the investments made by the company in
attractive enough and persuades people to try it
its branded products. We believe that the broad
(Svensk digital handel, 2015, p.32). One solution
offer of the company could meet the new values of
could be using the help of “ambassadors”, cus-
the customers in terms of sustainability and healthy
tomers who already tried online shopping and are
choices and benefit the organisation as a whole, in a
willing to spread the word. As 80% of those who
non-competing logic with the existing retailers.
25
Although e-commerce is an adapting industry with radical change, we want to bring attention to the reader that brick and mortar stores remain a very relevant part of the grocery shopping puzzle (Nielsen, 2015). Our strategy revolves around the idea that we want to leverage existing resources of ICA, and create a separate entity that coexists within the current frameworks the organization has set up. Although ICA Onli was proposed as a segment of ICA Gruppen, we do not feel the service would compete with existing stores within ICA Sweden, but instead create more drive around existing ICA products and gain better brand recognition overall. Based on our preliminary research we explored customers’ needs and we proposed the reader with some solutions to our service, which is offered in regards to online grocery shopping. Given our results we believe our idea would be worth investigating further and we suggest that there could be more exploration on the subject. The next stage would be to create iterations and working design prototypes based on the collected research.
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7. REFERENCES
ICA Gruppen (2014) ICA Gruppen Annual Report 2014 [PDF]. Retrieved from: https://www.icagruppen.se/en/rapportportal/annual-report-2014/ ICA Gruppen (2016) Corporate Website. Retrieved February 3, 2016 from:http://www.icagruppen.se ICA Sweden (2016). ICA.se Retrieved January 20, 2016, from: http://www.ica.se
Digital sources Core Jr (2013, June 18). Bruce Nussbaum on Creative Intelligence, from Connecting the Dots to Indie Capitalism. Core 77. Retrieved February 8, 2016 from: http://www.core77.com/posts/25075/bruce-nussbaum-on-creative-intelligence-from-connecting-the-dots-to-indie-capitalism-25075 Ladner, S. (2008, April 12). Why do ethnography? Retrieved February 9, 2016, from: https://designresearch.wordpress.com/author/sladner/page/7/ Nielsen (2015, April) The future of grocery. E-Commerce, Digital Technology and Changing Shopping Preferences Around the World [PDF]. Retrieved February 10, 2016, from: http://www.nielsen.com/content/dam/nielsenglobal/ vn/docs/Reports/2015/Nielsen%20Global%20E-Commerce%20and%20 The%20New%20Retail%20Report%20APRIL%202015%20(Digital).pdf Svensk digital handel (2015) Digital mathandel 2015 [PDF]. Gรถteborg: Svensk digital handel. Retrieved Retrieved January 25, 2016, from: http://dhandel. se/wp-content/uploads/2015/07/rapport_digital_mathandel_2015_webb.pdf
Books Nussbaum, B. (2013) Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire. New York: HarperCollins Publishers. Purpura, S. &, Laurel, B. (ed.) (2003) Design Research: Methods and Perspectives. Cambridge, Mass.: MIT Press,
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Verganti, R. (2009) Design-Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean. Boston: Harvard Business Press. Zec, P. & Jacob, B. (2010). Design value: A strategy for business success. Essen: Reddot Edition.
Online Journals / reports Golsby-Smith, T. (2007). The second road of thought: how design offers strategy a new toolkit. Journal of Business Strategy, 28 (4), 22 - 29. http://dx.doi. org/10.1108/02756660710760917 Holloway, M. (2009). How tangible is your strategy? How design thinking can turn your strategy into reality. Journal of Business Strategy, 30 (2/3), 50 - 56. http://dx.doi.org/10.1108/02756660910942463 Porter, M. and Kramer M. (2011, January). Creating Shared Value. Harvard Business Review. Retrieved from: https://hbr.org/2011/01/ the-big-idea-creating-shared-value# Verganti (2008, September). Design, meanings and radical innovation: A meta-model and a research agenda. Journal of Product Innovation Management, 25 (5), 436-456. Retrieved from: http://www.uniroma2.it/didattica/direzioneestrategie/ deposito/Verganti.pdf Yoon, E. (2015, 15 April). Store Brands Aren’t Just about Price. Harvard Business Review. Retrieved from: https://hbr.org/2015/04/store-brandsarent-just-about-price?cm_sp=Article-_-Links-_-Top%20of%20Page%20 Recirculation
Journals Collis, D. J., & Rukstad, M. G. (2008). Can You Say What Your Strategy Is? Harvard Business Review, 86 (4), 82-90. Hargadon, A. B. (2005). Leading with Vision: The Design of New Ventures. Design Management Review, Winter, 33–39.
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Kolko, J. (2015). Design Thinking Comes of Age. Harvard Business Review, September, 66–71. Normann, R., & Ramirez, R. (1993). From Value Chain to Value Constellation: Designing Interactive Strategy. Harvard Business Review, July-August, 65–77. Porter, M. & Kramer, M. (2011). Creating Shared Value. Harvard Business Review, 89(1/2), 62-77. Verganti, R. (2006). Innovating Through Design. Harvard Business Review, 84(12), 114-122. Verganti, R. (2016). The Innovative Power of Criticism. Harvard Business Review, 94(1), 88–95.
Lectures Carlgren, L. (2016, 2 February). Design Thinking. [Presentation Slides] Lecture presented at HDK, University of Gothenburg. Carlsson Reich, S. (2016, 4 February). Business Design. Doberman Style [Presentation slides] Lecture presented at HDK, University of Gothenburg. Carstedt, G. (2016, 20 January). Creating a Sustainable Future [Presentation slides] Lecture presented at HDK, University of Gothenburg. Lindqvist, B. (2016, 22 January) Introduction to ICA [Presentation slides] Lecture presented at HDK, University of Gothenburg. Mannervik, U. (2016, 21 January). Strategy and business innovation -Design thinking in strategy [Presentation slides] Lecture presented at HDK, University of Gothenburg. Rylander, A. (2016, 19 January ). Perspectives on Strategy [Presentation slides] Lecture presented at HDK, University of Gothenburg. Shedroff, N. (2016, 4 February). Value of Design for Business. Seminar presented at Handelshögskolan, University of Gothenburg.
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- Health 360 service: - Reminders - Tips * - Recipes * - Meal planner * - Online shopping: - Apotek products (?) - Non-food products - Food products - Personalized promotions / offers - Home Delivery
LIST OF PRODUCTS & SERVICES
VALUE PROP OSI TION
ICA ONLINE
- Less physically demanding if you go to the store and buy bulkier things - Time saving - Time / cost efficiency - One-stop shop - Avoids queuing - More variety
PAIN RELIEVERS
- Time saviour - More efficient decision making - Plan budget - money smart - Ica Community - Loyalty Card and with the brand - Health 360 service - A place for food inspiration and healhty advice
GAIN CREATORS
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BUSIN ESS MODEL CANVAS
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CUSTOMER SEGMENTS i 2Oë?@ION i &éHDGD@N i 2DIBG@ CJëN@CJG?DIB i %G?@MGS i /éM@ION i 3@@IN ąCDG?M@I i .IGDI@ ąJHHëIDOS i ąJHKéID@N
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CUSTOMER RELATIONSHIPS i /@MNJIéG i ąJHHëIDOS i #MéI? M@êJBIDODJI i "êê@NND>DGDOS i 2@GA 2@MPDê@ i ìJJ? '@éGOC "?PDê@ i 3DH@ 2éPDJëM
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TREND SENSITIVE CAREERISTS (Careerists) $@NKDO@ OC@ êCéGG@IB@N DI CDN êéM@@M DN OC@ AJêëN KëON OC@ @HKCéNDN JI C@éGOC éKK@éMéIê@ éI? OJ AJGGJQ OM@I?N 3C@S éM@ éIRDJëN OCéO OC@S @éO DN BJJ? éI? C@éGOCS AJJ? >ëO âI? DO ?DAâêëGO OJ HéF@ ODH@ OJ KMD JMDODT@ êJJFDIB éI? DICéI? GéI?@ JA AJJ?
SOCIAL INSPIRATION FINDER (Social) 3C@S CéP@ é GJO BJDIB JI >JOC DIND?@ éI? JëOND?@ OC@ CJH@ éM@ êëMDJëN é>JëO OC@ OM@I?N éI? M@OMD@P@N CéKKS DINKDMé ODJI AMJH ?DAA@M@IO NJëMê@N &JJ? DN éI DHKJMOéIO KéMO JA GDA@ DO NCJëG? >@ C@éGOCS éI? JA CDBC LëéGDOS >ëO é>JP@ éGG AJJ? DN NJêDéG éI? éêO éN é NJëMê@ JA DINKDMéODJI EëNO éN KM@NêMDKODJI
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ICA CUSTOMER SEGMENTS
CONSCIOUS FOOD LOVERS (Food lovers) (N B@I@MéGGS êëMDJëN éI? @IBéB@? DI GéMB@ éI? NHéGG QCDêC êJIOMD>ëO@N OJ é CDBC G@P@G JA éQéM@I@NN 3C@ ?@HéI?N GDF@ êJJFDIB éI? QéIO CDBC LëéGDOS @RêDODIB KMJ?ëêO MéIB@ éI? @IPDMJI H@IOéG IJODê@? QCDG@ OC@S éM@ F@@I OJ HéF@ é BJJ? >ëS éO BM@éO KMDê@
SPONTANEOUS SHOPAHOLICS (Shoppers) 3C@S GDF@ OJ F@@K ëK JI OM@I?N éI? éM@ P@MS NKJI OéI@JëN DI OC@ DIO@M@NON éI? êJINëHKODJI "O OC@ >@BDIIDIB JA OC@ HJIOC OC@S HéS >@ CéKKS OJ OM@éO OC@HN@GP@N OJ NCJK éI? êJJF é GDOOG@ é>JëO QCéO OC@S A@@G éI? >@ DINKDM@? >S >ëO OC@I OC@ KMDê@ QDGG >@ DHKJMOéIO éI? OC@S éM@ AJMê@? OJ >@ HJM@ AMëBéG
FOOD & LIFESTYLE ENTHUSIASTS (Livsnjutare) ` 6JëG? GJP@ OJ ?DNêJP@M I@Q OCDIBN éI? OCDIF OCéO éMO OMéP@G êëGOëM@ GDO@Mé OëM@ éI? AJJ? êJHKGDH@IO @P@MS?éS GDA@ 3C@S NK@I? ODH@ éI? NJëG DIOJ êJJFDIB éI? OC@I QDGG ?J IJOCDIB >ëO CDBC LëéGDOS BJJ?N BJJ? AJM >JOC C@éGOC éI? OC@ @IPDMJIH@IO éI? é I@éO éI? êG@éI NOJM@
ECONOMIC TRADITIONALISTS (Traditionalists) 3M@I?N éI? êCéIB@ DN IJO NJH@OCDIB OCéO DIO@M@NON OC@H DINO@é? OC@ AJêëN DN JI AéHDGS éI? OMé?DODJI 3C@S QDGG âI? QéSN OJ NéP@ éI? HéF@ NëM@ OJ KGéI Q@GG >JOC DI O@MHN JA êJI?ëêO éI? êJJFDIB QCDêC CéKKDGS êJJF@? OMé?DODJIéG 2Q@?DNC AJJ?
- Fragmentated experience, different platforms (min mat butik), lack of cohesiveness (different apps, instagram accounts, etc. for different stores) - Focus on customer value and online experience - Propose an integration of new services and existing services
SERVICE/ EXPERIENCE
MINDMAP V1
- ICA position in health - Increase brand awareness - Benefit the ICA Brand - Fragmentated experience, different platforms, lack of cohesiveness - Where can OMNI live? - Where will profits go? - How can we benefit the physical store formats and not compete with them?
THE BRAND
- Benefit the ICA Brand - Different prices in different store formats - Scale economy - Standarization - ICA trademark products come from third party manufacturers.
THE PRODUCTS
We are looking into the future but we don’t want to leave anyone behind. We are considering:
B u i l i d i n g a g o o d fo u n d a t i o n
ICA ONLINE
- Mathem.se - Instacart - Wholefoods - Spud.ca - Tesco
COMPETITORS/ MARKET REFERENCES
Health / sustainablity related - Local products - Nutritional info - Use your leftovers
Price - Weekly specials - Price update + quantity
Shopping - Discount on repeat orders (planning & subscription) - Best sellers, fair trade, staff picks
Services - Meal plans / weekly / seasonal - Recipes / shop items from them - Catering & meals - Buy from different stores - Favourites / Last Order / My Usuals - Shopping Lists
Check out / Delivery - Bonus points in loyalty cards - Shows saving on discounts when you check-out - Delivery in one hour - Free delivery upon a certain amount (invite you to shop more) - Free delivery / different prices depending on the schedule
FEATURES
PRECEDENCE REVIEW COMPETITORS
- Sign up with facebook - You can buy without signing in (guest checkout) - If signed in: easy category choices (home, bakery, etc.) - Splash page easy location choice - Easy to see array of products - Easy check-out - Club/Loyalty Card
USABILITY
HOW M I GH T W E D E V E LO P A U SE R FOCU SED, S US TAI NAB LE O N LI N E E X PE R I ENCE TH AT CE N T RA L I Z E S ICA, EM POWE R S B RA N D LOYALTY AN D WHI C H B EN E F I T S B OTH THE ONLINE AND TH E OFF L I NE (S E L F- M A NAG ED STORES)?
'JQ êéI OC@ êëNOJH@MN NODGG A@@G OCéO OC@S NCJK éO (ą" cohesive experience
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BRAND LOYALTY
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COMPETITION
How might we...
CLUSTERS
NETWORK 2Oë?D@N NCJQ OCéO K@JKG@ QCJ CéP@ OMD@? JIGDI@ NCJKKDIB QDGG ?J DO éBéDI HéFDIB BM@éO éHé>éNNé?JëMN 6CJ DN JëM éH>éNNé ?JM ąM@éO@ é NOMéO@BS OCéO >@I@âON AMJH (êé N êëMM@IO êCéII@GN KéMOI@MN
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HEALTH DRIVEN
CENTRALIZATION
USER DRIVEN / FOCUSED
- ICA Basic - ICA Skona - Cook & Eat - Home
- ICA Swedish Diary - ICA Good Taste (local producers) - ICA Lactose free milk protein free - ICA Gluten Free - ICA Mealtime drinks - ICA Frozen fish - ICA Meat
ASSORTMENT
- ICA Gott Liv - ICA - ICA Loves eko - ICA Selection
ICA’S 8 TRADEMARKS
SUSTAINABILITY
- Harmonize - Simplify - Seamless Experience
VALUE FOR CUSTOMER
MINDMAP V2
- 81 Maxi - 122 Kvantum - 431 Supermkt - 666 Nära
1,300 STORES
Improve ICA’s online brand experience
OPPORTUNITY FOR REVAMPING BRAND/IMAGE
USER EXPERIENCE
CONFUSING MARKETING
- Make everyday a little easier
Self payed marketing
Aligning ICA Omni with physical stores over time
CENTRALIZATION
INTEGRATION
between different store formats. Between ICA
Reduce fear of digital / tech and cannibalization of channels
SELF MANAGING
Different prices in different places
Divide online strategy for their different store formats
Distribution of responsibilities / profits
COLLABORATION
Incentive program for integrated online services
Co-existence of online + instore shopping experience New roles for self-managed stores
ECOSYSTEM ACROSS CHANNELS
Collaboration between other branches of ICA Gruppen
Find a system / logic that fits all store formats
8,000 fliers delivered every monday
Build a community around ICA
UNIFICATION of platforms and services
- 10 million online recipes - Training - Physical and mental health - Wellness tips
Ica Health Services:
LOYALTY PROGRAM
- Entrepreneurship - Engage & develop
VALUES, MISSION, VISION
ICA BRAND
HEALTHY + FITNESS + WELLNESS = ICA
APOTEK
EVERYONE EATS, EVERYONE IS OUR TARGET but...everybody eats differently and have a different preferences in food, cooking, grocery shopping.
ICA ONLINE