LESS IS MORE
In our fast-paced, saturated world, simplicity is the best way to stand out. Consumers are overwhelmed by the ‘infobesity’ our digital tools generate. They’re looking for anything that will help to streamline the process of choosing and they prefer usage to ownership. Business models that simplify lives via very targeted offerings, subscriptions and recommendations are gaining momentum.
The simplest of them all
Companies that put simplicity at the heart of their model outperform their competitors. They understand that keeping things simple helps consumers to make choices and to feel happier about the choices that they have made in a world that is overly cluttered and complicated; as Barry Schwartz points out in his TED talk "The Paradox of Choice" seen more than 14M times. This simplicity impacts multiple aspects of business:
The design of experiences is becoming cleaner and simpler: from digital interfaces (flat design), to physical products (Apple) and retail experiences (Aldi). This clearly shapes what we expect and aspire to in terms of designed experience whether they are digital or physical
User journeys are becoming frictionless, as retailers like Amazon try to eliminate barriers to purchase both in the digital space and beyond, e.g; the dash button, allowing you to order a refill of a specific product via a single push or go the grocery store with no check-out.
Simplicity earns a premium: 64% of consumers are willing to pay more for simpler experiences
Simplicity builds loyalty: 61% of consumers are more likely to recommend a brand because it’s simple
Simplicity performs: A stock portfolio of the simplest global brands outperforms the major indexes by 330 % (source: Global Brand simplicity index 2017, Siegel+Gale)
Status in developed countries is becoming less about ownership and constant consumption and more about values, experiences and the ability to access what is needed when it is needed rather than collect possessions that clutter up your home. This is fuelled by ecology and the desire to ‘lighten’ your home and by a rejection of ‘classic’ consumerism.
Marie Kondo, the Japanese organizational consultant whose book sold over 1.4 million copies, popularized decluttering (a technique for separating from all non-essential objects). Second-hand sales platforms are booming in multiple sectors such as clothing where Vinted, the second-hand clothes marketplace, sold €1.3bn of clothes in 2019 and is valued at $1bn+ and at the luxury end of the market Vestiaire Collective has raised €59m and has 9m members in 52 countries. More and more consumers are willing to pay for the privilege of not having to own something permanently or to re-sell items that they no longer use. It is obviously true for housing and cars, but also now for bikes, clothes and smart phones.
Renting is taking the lead: 70% of millennial and Generation Z consumers are willing to rent, rather than buy (source: JLL 2019 “Future of Retail”)
OPPORTUNITIES & CHALLENGES
KISS (keep it simple stupid!)
Consumers want products and processes that are fluid, intuitive and streamlined. Approaches that strip out complexity and focus on the essential will stand out in this overloaded environment as they provide clarity and reassurance.
Businesses must therefore provide the smoothest possible user experience in terms of product functionality, customer journey and the clarity of their messaging. For existing players this means making hard choices about eliminating nonessential features and functionalities and stripping down their offer to focus on what generates value. In addition, connected objects will open up a new area of possibility for brands to make life easier for consumers. The spread of connected objects will help to collect usage data and to ‘update’ objects to take out unused features in new versions.
New lives for ‘old’ things
The BtoB rental segment is still under-exploited vs. BtoC despite offering flexibility, additional re-sources and cost optimisation. For example, Floow2, a startup based in the Netherlands, allows all elements of the supply chain to be shared between companies (eg. car fleet, printing facilities, machines or canteen services).
The same applies to the secondhand segment. Players such as BackMarket ($176M raised), allow us to buy refurbished electronics. Ocazoo connects professionals for the sale of work equipment (eg office equipment, florklift, construction engines).
The Renting economy generated $60bn in revenue in the United States last year, excluding vehicle and home rentals, even Ikea is testing a furniture rental service.
70% of companies today use some aspect of the sharing economy at least once a month. (source: The State of the B2B Sharing Economy, Chad Brooks 2017)
SO WHAT FOR LYRECO ?
1. What would be the simplest and most intuitive user-experience that Lyreco could offer for each product category?
2. How could we make Lyreco’s purchasing and using experience more ‘frictionless’? What are the key pain points for our current clients and users?
3. What features of our services are truly essential for end-users?
4. What new minimalist products could Lyreco offer?
5. How could we rethink our offer to facilitate customer decision making? How could we save them
6. What if tomorrow, our customers prefer to rent rather than buy? Second-hand rather than new ? What are the categories that are most exposed ? What new models could we imagine ?