service orientation from b2b to b2b2c: revealing what consumers really need is a bit of street work and a creative approach

1. Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Abstract
This Short Service Story is about telling how services could be viewed from our own (private) consumer point of view. It sketches
how to explore which services and products are being sought by consumers driven by their specific needs and expectations. The
Story begins by introducing briefly the trends in servitization under the umbrella of innovative consumer-targeted offerings.
Following our research activities and projects, the paper highlights the viewpoints consumers have when deciding upon what to
shop next.
The example of an urban layout has been chosen to turn the readers’ attention towards service rather than product offerings. We
hereby mirror our very own shopping experience as citizens and tourists piggy-backing our very own decision parameters about
what we like and what not. We take the urban layout to reflect upon how products and services are being exposed to us in our
preferred shopping area and ask you to do the same. Based on the example of Berlin Mitte we demonstrate what other services
could be added to an urban area to serve consumers paper.
The paper provides an exercise at the end that any of the readers can make use of. We like to get your reflection results in case you
like to share them with us! If so, please send your insights to b.fluegge@sap.com.
Keywords: Innovation, Service Trends, Services, Urban Layout, Urban Needs
© SAP AG, Barbara Flügge Page 1 of 15

2. Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Table of Content Page
Introduction … 3
① Serving instead of purely Selling … 4
② What is the viewpoint of the consumers and business customers? … 5
③ The Urban Layout … 6
④ An Example in Berlin Mitte … 7
⑤ Being Served in My Neighborhood … 8
⑥ The Urban Service Layout … 9
⑦ What makes consumers stay … 10
⑧ Concluding how to «make consumers stay» … 11
⑨ Get started in creating your very own layout … 12
Exercise … 14
Keywords: Innovation, Service Trends, Services, Urban Layout, Urban Needs
© SAP AG, Barbara Flügge Page 2 of 15

3. Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Introduction
The relevance of services is growing. As identified by the OECD, the World Bank and research studies on service growth, revenue
generated by services has been overtaking the revenue generated by products sale with a ratio of about 2:1. Not necessarily all
industries encounter the same level of speed, but are approaching towards more and more service foci. The trend «servitization» in
fact is revolutionizing entire industries.
When we look behind the curtain on most innovative companies, our analysis showed that a major trigger for innovation to
companies was to serve markets differently, differentiate from product sellers, and attract consumers more intuitively, yet surprise
them with a «blink» (Gladwell, 2005).
Innovation has many definitions. The following we find suitable are. Following Chesbrough (2003, p. 35), innovation is apparent
where «companies are increasingly rethinking the fundamental ways in which they generate ideas and bring them to market». In the
field of technical innovation, the Organization for Economic Co-operation and Development (OECD) (2005) concludes that a
technological new product that includes a significant improvement and has been put into use is perceived as a technological
innovation. A technological innovation covers scientific, technical, organizational, financial as well as commercial aspects (OECD
(2005)).
© SAP AG, Barbara Flügge
Sources of reference:
• Chesbrough, Henry W. (2003). The Era of Open Innovation in MIT Sloan Management Review, Spring 2003, Vol. 44 No. 3.
• Flügge, Brookes (2013). Short Service Stories – Social Networks and Open Innovation.
• Flügge, Peslova, Fliegauf (2010-2013). The Service Store Concept
• Flügge, Barbara. Service Innovation and Transformation Projects (ongoing)
• Gladwell, Malcom (2005). Blink: The Power of Thinking Without Thinking. Little, Brown and Company; 1 edition (January 11, 2005)
• OECD. (2005). Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data [Electronic Version], 3rd edition from
http://www.oecd.org/.
• Statistics around Servitization can be found at the websites of OECD, World Bank, Berlecon and statistics offices of a specific country and the European
Union.
Page 3 of 15

4. © SAP AG, Barbara Flügge
① Serving instead of purely selling. 7 emerging trends build the fundament about the increasing role of serving instead of purely
selling:
1
2
3
4
Market Growth by Services continues
Anything-as-a-Service in focus to become consumable, downloadable, digestable, subscribe and exchangable
Geographical Decoupling is needed to serve customers anywhere
Electronification of Service Ordering is made feasible
Business Transformations are required to cope with the increasing service demand by businesses and business networks
Enterprises’ and Consumers’ Mobility increases, yet expectations for real-time execution emerge
Mature Information Technology is awaiting Intelligent Content
5
6
7
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 4 of 15

5. ② trends make further initiatives accountable. still, market orchestrators seek to gather direct and immediate insights in what
comes next. What is the viewpoint of the consumers and business customers?
consumers tell
because they like
us for the great
shopping
experience
consumers do not
tell, but raise
expectations
elsewhere
consumers are loyal
customers as they are
fans about our products
for a long time
consumers continue to
shop the pro-service
package as they like the
packaging of product,
installation and repair
services
A Product
A Product plus a Service
The non-existing ideal cool thing
A Service
the company does
not serve my needs
– consumers drop
out and it takes a
long time to
recognize a change
in the offerings and
come back
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 5 of 15

6. Image source: Mikoleit, Pürckhauer (2011), 100 Lessons for Understanding
the City, p. 22
③ The Urban Layout. like in an urban layout as illustrated below, well positioned shops attract others, complementary products are
being sought first in the immediate neighbourhood, and what I do not find at the first corner, I hope to find across the street.
The illustration on the left indicates shops, cultural
amenities, restauraunts and bars in the lower New York
City district of SoHo.
The arrangements are quite stunning as mostly you find
restaurants and bars rather at the edges of the district.
Shops are piled towards the centre of the district. A
number of no public access areas add to the layout –
potentially with access to residential buildings or local
community offices and governmental or business
related areas.
Cultural amenities are rather a few compared to the
number of shops and restaurants made accessible to
the local residents, the visitors, tourists and personnel
doing business in the SoHo area.
The analysis does not reveal how many of the shops
focus on a product or on a service offering. Hereby we
only can speculate that most of the early established
shops in the former industrial area got acquainted with
the number of artists that moved in that area. Where
rents have been affordable, living costs manageable,
the early shops covered what the artist needed and
especially offered: galleries, art cafes and supply shops.
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 6 of 15

7. ④ An Example in Berlin-Mitte. let’s have a look at one of the streets of Berlin Mitte and gather
with shops are currently allocated and which ones might be added following the viewpoints of
being better served …
global brand chain
bar
restaurant
restaurant
shoe shop
global brand chain
decoration store
furniture
residential
residential
residential
phone supply
phone supply
residential
access to backyards
residential
residential
Chinese food supply
local grocery store
kiosk at the corner
boutique
boutique
boutique
boutique
bar
bar
resi-
dential
resi-
dential
resi-
dential
hotel
resi-
dential
boardin
g house
resi-
dential
resi-
dential
resi-
dential
… …
boutique
access to backyards
public area
offerings
restaurants & bars
no public access
The street layout reflects the emerging combination of
being a resident that seeks to gather any kind of
offering for daily living supply needs nearby and stay
within his or her district for dining, chilling and other
sorts of distraction needs.
The streets of Berlin Mitte gained attraction because
of creative product displays, shop layouts like the Boss
Orange shop that offers distinct dressing rooms
following an apartment layout. Attraction is given also
by the huge variety of distinct types of restaurants and
bars offered to the resident and the tourist.
An essential adding to the attraction is the historical
landmarks, teared-down buildings reflecting the spirit
of being-yet-to-start to become an upscale district.
That label of turning into an upscale district sticks with
Berlin Mitte for many years, even decades.
© SAP Next Business and Technology, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 7 of 15

8. ⑤ Being Served in My Neighborhood. now let’s consider for that street of Berlin Mitte and gather
with services might be added to what I shop in my neighborhood and being better served just-around-
the-corner …
global brand
chain
bar
restaurant
restaurant
shoe shop
global brand
chain
decoration store
furniture
residential
residential
residential
phone supply
phone supply
residential
access to backyards
residential
residential
Chinese food
supply
local grocery
store
kiosk at the
corner
boutique
boutique
boutique
boutique
bar
bar
resi-
dential
resi-
dential
resi-
dential
hotel
resi-
dential
boardi
ng
house
resi-
dential
resi-
dential
resi-
dential
boutique
access to backyards
decoration showroom
sewing service
repair-to-serve-around the
corner
residential
residential
residential
bar
residential
local community
service office
decoration
supply
carpenter
residential
residential
residential
snapshop studio
residential
re-
crea-
tion
area
Serving consumer will
result in expanding in a
the traditional product
offering. Ideally the
expansion is a combined
activity of experimenting
on the one hand side
and on the other hand
intentionally, planned
driven addings.
public area
offerings
restaurants & bars
no public access
pop-up shop
Examples of experimenting
are so called pop-up shops.
The concept behind is to
spread the word of mouth,
make use of a community
or simply market it in an
existing store distributing
pop-up postcards. A pop-up
shop opens for a brief
period of time, launching it
in an existing retail
surrounding or making use
of an unused building and
planting it into the
community.
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 8 of 15

9. ⑥ The Urban Service Layout. now let’s consider for that street of Berlin Mitte and gather with services
might be added to what I shop in my neighborhood and being better served just-around-the-corner …
global brand
chain
bar
restaurant
restaurant
shoe shop
global brand
chain
decoration store
furniture
residential
residential
residential
phone supply
phone supply
residential
access to backyards
residential
residential
Chinese food
supply
local grocery
store
kiosk at the
corner
boutique
boutique
boutique
boutique
bar
bar
resi-
dential
resi-
dential
resi-
dential
hotel
resi-
dential
boar-
ding
house
resi-
dential
resi-
dential
resi-
dential
boutique
access to backyards
decoration showroom
sewing service
repair-to-serve-around the
corner
residential
residential
residential
bar
residential
local community
service office
decoration
supply
carpenter
residential
residential
residential
snapshop stuido
residential
re-
crea-
tion
area
The service layout we
envision turns into
additional onsite
offerings.
New service offerings
are product-adjacent on
the one hand. On the
other hand they are
related to residential
needs such as the
establishment of a social
community service
office. and non-
product, residential.
They are being offered
directly to the
neighborhood.
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 9 of 15
public area
offerings
restaurants & bars
no public access
pop-up shop

10. ⑦ What makes consumers stay. what we saw from the example of Berlin, products and services offered in a certain,
compelling logic, will ideally guide the consumers to the next shopping experience as well and the next one and the next one.
1 we like how we
have been served
2 it is the
package that
convinces us
3 the top-seller
product should last
4 we love to get
more, but from
whom?
Four reasons of «make consumers stay» are about:
1 we like how we have been served
2 we are convinced by the onsite offerings
3 we like to get continuity in the offering and those that provide the offerings
4 we need more and if not offered, we browse and shop elsewhere
Why would residents stay within their area to experience anything they need for daily living, entertaining and nice-to-haves?
In Berlin the concept is called Kiez-life – everything that is needed in is offered in my Kiez. «Kiez2 is a local term for «my
area», «my suburb». Residents do not leave the Kiez for their being served elsewhere.
The neighborhood knows each other pretty well. That makes it is easy for residents to interact. Furthermore, they fill
acquainted when going out, on the streets and in the stores when coming from work or when leaving their home offices.
Familiarity with the ones that offer the products and services is key to feel home, not loosing time in finding out who else
would serve our daily needs.
Out of the above stated reasons would the insights into reasons 1,
2 and 3 be compelling enough to prevent residents being
distracted to another outside offering? Would we still encounter
what residents miss?
Missed opportunities are those we should know and listen to at
an early stage. Otherwise the risk of loosing and investing in re-
attracting the consumer turn into additional financial, marketing
and logistics and human resource efforts.
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 10 of 15

11. Product offering exists
Product and Service offered in a package
No offering yet available
Service offering is compelling
⑧ Concluding how to «make consumers stay». there are 4 entry points to check out compelling service layouts:
and 3 key questions that trigger the layout design:
what is the strategic impact the existing offerings should create
and which impact should new offerings create?
differentiating the existing products and services, what are the
results of the ABC analysis?
who are the addressees of each of the identified offerings?
longterm objectives
value propositions to consumers
value creation process
intangible assets
stand-alone
service bundles
hybrids (product + service)
businesses …
local government …
consumers …
gatekeepers, bridges, multiplicators…
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 11 of 15

12. ⑨ get started in creating your very own layout
It is now transformational excercise to transform what we learned from the insights in an urban layout into a service layout
offering to a community, a business partner which set of services.
In our method of service innovation we make use of the ecosystem analysis as demonstrated in the urban layout example.
Based on all the stakeholders involved we then build categories around the level of involvement.
We suggest you start with a layout sketch similar to the one of the Urban Layout and list all the services and products you are
currently offering and run through the following steps:
. sketch the layout of existing products and services
. add to the layout further services you like to see being offered next to your product
. add to the layout further services you like to bring newly to your consumers
. sketch the layout again and include the new offerings
. identify what you need to do to deploy the layout
3 Questions on the next page support in finding out what you like to see next.
Publish your layouts ideally in the blog and make it accessible for comments and further ideas to the community – we love to
see your layouts!
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 12 of 15

13.  the layout sketch pad – you want to make use of the shading and colour coding below and want to make use of the icons as well
your location – where you like to shop
yourconsumers
public area and inter-organizational access
offerings (products, services, service bundles)
recreation and entertainment offerings
no public access – intra-organizational
pop-up shop or service
adjacent knowledge sharing services and products
addressees:
. individuals
. businesses
. business networks, entire communities
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
Page 13 of 15

14.  the layout sketch pad – you want to make use of the shading and colour coding below and want to make use of the icons as well
your location – where you like to shop
yourconsumers
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
your mapping result(s)

15.  the layout sketch pad – you want to make use of the shading and colour coding below and want to make use of the icons as well
© SAP AG, Barbara Flügge
Short Service Stories: «How consumers and businesses tell us about what we should offer next»
- The case of urban needs -
your location – where you like to shop
yourconsumers
your mapping result(s)