REDESIGNING HY-VEE'S SERVICE DESIGN

Jan-Apr 2017, Atlanta

INTRODUCTION

Hy-Vee is a grocery chain that operates primarily in the Midwestern United States. Founded in 1930 by Charles Hyde and David Vredenburg, Hy-Vee has two primary value propositions: The first is their positive company culture, which fosters strong customer service. Hy-Vee’s enduring slogan “Where there’s a helpful smile in every aisle” represents their historic commitment to the customer experience. The other pillar of Hy-Vee’s value proposition is variety. In addition to a grocery store, the chain includes pharmacies, dieticians, clinics, banks, post offices, restaurants, gas stations, among other experimental stores. They leverage these diverse offerings to allow customers to maximize savings. Based on the our team's research and fndings,we have identiyed verticals where the Hy-Vee experience could be enhanced.

RESEARCH
Primary Research

Team members observed customers and employees and conducted short semi-structured interviews. We found that Hy-Vee gives a first impression of promoting health and deals, caring about customers, and providing anything one might need (and more) when making a grocery trip. While these are true, further observations and interviews revealed challenges in effciency and communication.



Secondary Research

The team conducted background research on Hy-Vee and the grocery industry prior to visiting stores. In addition to phone calls with NCR and IT Employees from Hy-Vee, activities included researching:  • Social media & online reviews   • Literature  • Industry publications  • Annual reports  • Hy-Vee website and mobile application   • Competitors  • News articles



Key Insights

From the primary and secondary research, we concluded both gain and pain points of Hy-Vee stores. Generally, Hy-Vee possesses a large amount of attractive merits, we summed up as: 1. family and community-oriented, 2. autonomy for stores and employees, 3. collaborative Innovation and diverse range of products/services and 4. pleasant, visually-appealing environment. Even through, there are some pain points where we see opportunities for a more pleasant service experience. For example, the checkout and POS manpower is intensive and disjointed - as one of the final touch points of the grocery shopping experience. The second is the size of store as organization and efficiency challenge. Even though Hy-Vee prides themselves for their service, there were instances where people were unable to find what they want. Third is the “Inconsistency” across various stores and variations in service quality in the day and night. A by-product of autonomy results in slight variations across stores.



Research Artifacts
# Personas

# Customer and Associate Journey maps

By creating customer and employee journey maps, the team visualized the pain and gain points personas face before, during and after their in-store experience.




IDEATION
Research Findings and Opportunities
# The Need for Friction-Free Retail

Research indicates that although Hy-Vee‘s diverse range of services are co-located, the point-of-sale (POS) system remains a challenge for both employees and customers. Looking from the customers‘ viewpoint, without exiting the compound, there could be multiple times that a payment would occur, leading to unnecessary friction like queue lines and payment transactions. As one of the last few touch points of the Hy-Vee experience, the POS system is identified as one of the key areas of opportunity for innovation for the team.


# The Need for Selection Assistance

With some stores sprawling over 100,000 square feet and offering over thousands of unique inventory items, it can be slightly overwhelming for customers to locate and decide between items. During the team‘s visit, customers were spotted standing for extended periods of time in front of shelves. Secondary research revealed that customers are increasingly hungry for information. Leveraging the in-house dietician and pharmacy data to aid customers in making product selections presents another area of opportunity.


#The Need for Community Setting

Hy-Vee values its community. Besides supporting local community events and selling products that benefit selected community groups as part of the One Step program, Hy-Vee emphasizes inclusiveness on various levels. The team found that Hy-Vee employed community members of all ages. Hence, part of our design would provide space for the community to use. Valuing human-to-human interaction between customers, as well as between customers and employees, would result in a higher level of customer loyalty, which our research found to be especially true among female customers.


# The Need for Freshness

Research indicated that Millennials are less likely to cook a meal from scratch, and that more people are eating out at home. This led Hy-Vee toward providing more Blue Apron-style freshly-prepared meal kits. In addition, Hy-Vee’s focus on fresh and healthy grocery items stems from their customers‘ shopping patterns along with increasing e-commerce sales on packaged products. As mentioned to the team when visiting stores in Minneapolis, a can of green beans is the same everywhere. The team saw opportunity in making traditionally packaged food products fresh.


Process

Translating from concepts and words into actual prototypes allows for physical and visual interaction, that helps to develop and refine ideas iteratively. Feedback was also sought from various users.



FINAL DESIGN
Overview: Infotaining Innovation

The team’s proposed design for the future Hy-Vee introduces architectural changes to the marketplace that leverages automation. The result is a visual and interactive experience that increases customer-customer interaction, employee-customer interaction, and customer-environment interaction through engaging touch-points and gathering spaces. One main feature will be the multi-function event space at the mezzanine level. In contrast, the size of the center store will be significantly reduced. Instead of stocking multiple numbers per product on shelves, only one sample of the product will be on the smart shelves as a Showcase item. Without having to cater for wide aisles because of the elimination of carts, space can be more effectively managed within stores. All the individual services at Hy-Vee will be strung together with an integrated Point-of-Sale system to eliminate friction of payment transactions. The Exit Lounge, one of the last few touch points, will be an aggregation of friendly employees, comfortable ambience, visual feast, and coffee.





TOUCH POINT 1 - Marketplace

The Marketplace is where one would find fresh groceries, be it produce, meats, seafood etc. The team‘s store visits revealed that Hy-Vee places huge emphasis on these sections, all the way from product placements to product personalization. From background research, the produce section would usually be one of the first touch points of a grocery store experience because of the sensory impact of the scents, textures, and colors to send a message that is welcoming, fresh, natural, fragrant, and healthy. In our design, the Marketplace experience will be elevated to include the stronger elements of visual feasting and infotainment, with the same emphasis on sending a more impactful message that conveys the store‘s vibrant environment and allows for more customer-employee interactions and employee autonomy.

Humans and machines will work together to deliver the freshest and most personalized pasta sauce into a customer‘s hands within the shortest amount of time. Imagine selecting the nest ingredients that suits your palate, handing it over to a friendly Hy-Vee employee, and showing your children how these ingredients gets cut, ground and combined into the jar of pasta sauce. What would usually hap- pen behind the scenes in a faraway factory is now brought in stores, together with freshness. Similar to how people attend brewery, farm, and factory tours, the educational element is also brought in stores. The moving parts of the machinery will be part of the visual feast, similar to how passerbys would stop and watch the fresh orange juice machine (that can be found in some of the Asian countries like China and Singapore) cut up 3-4 oranges and squeeze out the juice. The Yokohama Ramen Museum had an experience where visitors can make their own personalized cup of instant noodles, with participation physically and visually in the sealing, packaging processes. Only with this you‘ll know exactly what goes into your food, how they are packaged, and best of all, the ingredients are uniquely-you. Leveraging on informatics, employees manning the station can also provide advice based on nutritional values and tailor ingredients according to dietary restrictions.

TOUCH POINT 2 - Friction-Free Retail System
Cart-free, hands-free

In the future Hy-Vee, Near-field Communications (NFC), automation, and employees will work together to enable a seamless shopping experience where customers can focus on their environment. With any NFC-enabled de- vice including smartphones, smartwatches, or a Hy-Vee band that can be dispensed in stores, customers can now shop hands-free. To speed things up, a credit or debit card can be paired, but will not be necessary.


In the Marketplace, customers are able to pick up the produce of choice, hand it to a friendly employee, who will send the produce via a smart transporter infrastructure to the collection area at the Exit Lounge. The only transaction that occurs will be scanning the NFC-enabled device with a reader, that will add the purchased item to a virtual cart.


At the Showcase for packaged food, customers are free to interact with the showcase items, before scanning their NFC-enabled technology to add the item to their virtual cart. At the back end, the smart transporter infrastructure will move the item from the storage area to the final collection area at the Exit Lounge. Similarly, any consumption of services from Postal, Dry-Cleaning or Dining will be handled the same way.


Integrated across services

All payment transactions will be done at a single point upon Check Out. This concept is similar to an online shopping experience, where people would add items to cart, and check out only at the end.


Exit Lounge

While waiting for your check-out items to arrive at the pick up kiosks, an exit lounge equipped with a cafe and comfortable ambience awaits. Employees will help bring shopping bags to the pick-up point, where self-driving cars pick up customers.


TOUCH POINT 3 - Multi-Function Community Space

A multi-function space, situated at mezzanine level, will host events ranging from cooking classes, and wine and cheese tasting classes to private functions. Emphasis will be placed on the architecture and location of this space, allowing it to be a theatre for customers to take in the sights of the entire store from above and below. The reverse can also happen, because of the proximity to ground level. That way, shoppers are able to be informed of what events are on-going. The space can also serve as a gathering area for locals to exchange ideas, interact and be immersed in the visual feast that is offered by Hy-Vee in stores.


TOUCH POINT 4 - Selection Assistance

Offering a variety of product choices can cater to a larger group, but can also make things difficult for shoppers when they have to commit to one item of the many on the shelves.


You know that you want to buy some crackers, but have no particular brand in mind. At the same time, you also know that you prefer salty and wheat-based crackers, and preferably locally-produced. Instead of having to sift through every single cracker product that is being offered, the Hy-Vee of the future will provide selection assistance kiosks that function like filters on e-commerce sites. The smart shelves at the Showcase area have a sensor for each product, that will also light up if the particular product met all the customer‘s requirements. These will direct the customer‘s attention only to products that would suit his or her needs.


This can also be a pre-programmed list of options set in the customer‘s online pro le for the health-conscious, people with dietary restrictions (e.g. allergies), or simply people who are adventurous and want to try new products.

New Customer and Associate Journey Maps





Service Bluprint



Change Management Plan

Inevitably, several of Hy-Vee’s stakeholders will feel the impact of the service re-design towards Hy-Vee’s future. Therefore, a change management plan helps to ensure a smooth transition from the present state. In addition to the two tables of action plan presented, the changes should be implemented in phases, and not all at once. Hy-Vee’s best asset is its employees, who are also owners. The aim is to get buy-in from all employees and ensure that every one of them has ownership of the new design. Since a large part of the design is about engaging technologies as touch points, employees will need to be eased in with training prior to store openings. Only with this can they be of assistance to the customers, especially for those who are less technology-savvy. In the midst of affecting revolutionary and disruptive changes, Hy-Vee must be cognizant to preserve what it already excels in —— great customer service and high employee motivation. It is also important to continue to stay ahead of the curve with constant and iterative improvement and innovation.