Here is a round-up of innovative uses of vending machines from around the world, compiled by Trendwatching.com. These are all great examples of service design. How, you ask, since they are all selling products? Service design comes into play in the methods in which they have chosen to “get” products to customers. That delivery is, in and of itself, a service supporting the product. In most cases this is about delivering the product to the right customers in the right place at the right time. And in doing so, cutting out a whole chain of middlemen, resellers, and wholesalers. (Is that good or bad? Depends on what role you currently play in that chain!)

This is also another example of technology prices continuing to fall, which make it financially feasible to distribute via vending machines or self-service kiosks. That technology is applied to not only the “machine” itself, but also it’s wired or wireless connection back to headquarters to let it’s owners know when it’s time to restock or fix the machine.  Which of these would you use?

• Barcelona company Lof (short for ‘Lo Fresco’) has developed a range of vending machines that only dispense healthy food, from prepared fruit and ready meals to gazpacho soup.
• Redbox specializes in the vending of DVDs via self-service kiosks. Redbox kiosks are located throughout the US in fast food restaurants, pharmacies, grocery stores and convenience stores, leasing out DVDs from USD 1 per night.
• Launched earlier this year, US based U*tique bills itself as the world’s first interactive, automated luxury store for “life’s little emergencies and indulgences”. Debuting at Los Angeles retailer Fred Segal, U*tique lets consumers learn about selected luxury and personal-care products and have them dispensed with a swipe of their credit card. Only 50 products are available at any given time, and all have been handpicked by product specialists with backgrounds in global beauty, trend-hunting and innovation. The technology features a touch-screen interface, interactive LED lighting design, and a behind-the-scenes robot that delivers products from secure storage into consumers’ hands.
• German farm ‘Peter-und-Paul-Hof’ has begun selling its fresh produce in vending machines. The specially designed Regiomat machines sell milk, eggs, butter, cheese, potatoes and sausage in thirteen German towns and communities.
• The Standard Hotel chain in the US has introduced a retail concept by placing vending machines stocked with designer swimming trunks in their hotels. Quiksilver and André Balazs’ have partnered to fill the vending machines in the New York, Los Angeles, Hollywood and Miami hotels.
• Bike manufacturer Trek set up a prototype Trek Stop Cycling Convenience Center in Madison, Wisconsin. Located outside (and operated by) bike shop Machinery Row, the Trek Stop is a convenience center for cyclists. The vending machine is stocked with bicycle products such as spare tubes, patches, tire levers and more, along with food and cold drinks.
• InstyMeds have developed vending machines to dispense medication. The machines are designed to be placed in doctors’ offices, clinics, emergency rooms and other healthcare facilities. Each holds 100 of some of the most often used medications, ranging from pills to drops to creams and so forth.
• Last year, US Electronics retailer Best Buy installed vending machines at 14 major US airports as part of a successful pilot program for the company’s new Best Buy express kiosks. The kiosks are large vending machines that carry cell phone and computer accessories, flash drives, MP3 players, headphones, gaming devices, travel adapters, and other items that are likely to appeal to customers on the go.
• Kosher Vending Industries in the US operates “Hot Nosh” vending machines that deliver hot kosher meals in 90 seconds. The company originally launched with more than 50 locations in New York City and has expanded nationwide through partnering agreements and regional licensing.

And we particularly like this one, which solves a very specific problem, in very specific places…

• Two British companies now sell their version of portable ballet flats in vending machines at nightclubs: Rollasoles sell for about GBP 5 and come in four colors: Hi Ho Silver, Gold Digger, Back to Black and Pink. Afterheels are similar rollable ballet flats which have the added feature of being recyclable.

Today’s Wall Street Journal has an article entitled, “Palm’s Pre Smart Phone Fails to Stem Deep Losses.” The article goes on to describe the Palm’s quarterly loss has quadrupled since the launch of the much-touted Pre on June 6. Revenues are down, profits are down.

But how much of this is attributed to the phone itself, which has been lauded as an “iPhone killer,” versus the partner that Palm chose to dance with on the network provider side? This is a classic case service design example of the symbiotic relationship between products and services. From our vantage point, Palm’s problem is not the Pre product, but the Sprint Nextel network, which is suffering from massive customer flight due to spotty coverage, dropped calls and bad customer service.

As a long-time (and happy) Verizon customer, I have been jonesing for the Palm Pre ever since I saw it in Las Vegas last January at the Consumer Electronics Show. Add into the mix that I am also a long-time (and happy) Palm Inc, customer who started on the old Palm Pilot handheld organizer, moved up into the Treo family of smartphones and is now happily using a Palm Centro. And even though I’m happy I STILL want a Pre. But I will not buy it until Verizon has it. (This is probably also the number one reason I don’t have an iPhone – even though I am Mac everywhere else in my life – you can only get an iPhone via AT&T, another inferior network to Verizon.)

Call me old fashioned, or just call me loyal. But Verizon has always done right be me when it comes to mobile communications and that service relationship is the stake in the ground around which my product decisions are made. This is a key insight of service design that product folks often don’t get: it’s more about the service “eco-system” than it is about individual features of a product.

When is this insanity going to stop? Imagine if you bought a Chevrolet and you could only put Sunoco gas into it. In Europe, the phone networks are independent of the handsets so that consumers are free to combine their favorites. Until the U.S. adopts the same model,  I just have to hope that Palm hangs in there long enough for me to get a Pre on the Verizon network. Please, Santa…

A critical part of the service design process is putting into place feedback loops which enable your customer to let you know how you’re doing. This is a delicate matter because you want to do it without disrupting the customer experience. That’s why we applaud Facebook and the way they’ve incorporated a simple feedback loop into their advertising.

Did you ever notice the little “x” at the top corner of a Facebook ad? I kept seeing these annoying ads for “Mafia Wars,” a Facebook game that appears to be wildly popular with others. Out of curiosity I clicked on the “x” up in the corner of the ad, having been conditioned over the years to know that clicking on an “x” makes things go away. That feature is standard user interface component for applications, or a way to get rid of an intrusive “overlay” ad that hides content below it.

In this case, the ad on Facebook was on the side of the page just sitting there. And being able to hit the “x” to just make it go away is a great idea. But before the ad goes away, Facebook solicits your feedback by asking “Why don’t you want to see this ad?” Your options are misleading, offensive, uninteresting, irrelevant, repetitive or other (in which case a text box pops up for your custom input.)

After making a selection, you see “Thanks for your feedback. Over time, this information helps us deliver more relevant ads to our users.”

There’s also the famous “thumbs up” logo at the bottom of the ad to show that you like the ad. (It would be interesting to see a breakdown of how many people click the “thumbs up” versus the “x” – and why.)

This is such a simple, yet powerful tool. Why don’t other websites integrate this feedback feature into their online advertising? The whole point of the web is that is interactive. “Ask and ye shall receive,” right? We all know that ads are the currency of the realm when it comes to delivering content. So why not do everything you can to get feedback from viewers as to what they like or don’t like, and why?

Smart move Facebook, and a great example of a powerful feedback loop for service design!

Last week the Wall Street Journal ran an article about Wi-Fi services available on airlines. Bottomline: people love it, but really aren’t willing to pay for it. Why not?

According to the article, “in tests and now in regular service, usage drops off considerably when travelers must pay for the service.” Even Alaska Airlines, which only charges $1, saw a steep drop off in usage. (By the way, Alaska Airlines is a “cashless” airline, so if you want the Wi-Fi, you have to pay for it with a credit card – ggrrrrrrr.)

So what’s going on here? Is the economy causing people to cut back on non-essentials? Or have people become so used to ubiquitous computing that they expect “the cloud” to envelope them everywhere, all the time, for free?

Or could it be – as we suspect – that sitting in an (albeit overpriced and cramped) airline seat at 35,000 feet is one of the last places where you can seek refuge from our “always on” world of instantaneous communications?

An interesting question to answer for sure, and one which has ramifications for service design in the worlds of travel, entertainment, and hospitality.

Interesting times in the media worlds as the television and Internet continue their mash-up dance. Some interesting statistics from a recent article by Terry Teachout.

In 1949:
- Americans owned 85 million radios
- Americans owned 1.3 million TVs – of which over 70% were located on the east coast
- a 16 inch picture tube TV $695, or the equivalent of $6,212 in today’s dollars.
- TV networks were losing money at a clip of about $116,000 (today’s dollars) EACH day

Then came the tipping point. Fifteen TV stations on the east coast and in the Midwest got connected via a crude coaxial cable network, which enabled far more viewers to see network programs “live.” As a result, movie theater attendance dropped by 72% but bars who had TVs installed were filled to the rafters on certain nights.

Who made it safely to the other side? Big (radio) media companies who kept funding their vision, and entertainers who embraced the new medium, as opposed to pining for the past. Bob Hope and Big Crosby made the leap from radio to TV, while Fred Allen, a big radio star, decried the loss of the “theater of imagination” that radio made possible, and got left on the far shore.

These are underlying principals of service design; understanding what customers want, using technology as an enabler, and being patient to see your ideas to fruition. (This latter point is difficult for public companies who live quarter-to-quarter.) All in all, the transitions of previous media shifts are all good history lessons for today’s media executives.

The California Academy of Sciences, a natural history museum in San Francisco re-opened last fall in a $488 million eco-friendly building. Beyond the new digs, they also apparently have a new attitude as well. They now stay open late Thursday nights and transform the museum into one of the city’s hottest night spots. More than 3,000 people drink and dance while touring the hands-on tide pool, aquarium, planetarium and four-story tropical rainforest. But book your $10 ticket now because they often sell out in advance.

Who the heck wouldn’t want to hang out in a cool aquarium for happy hour, rather than sitting in bar? We’re glad to see that the lawyers haven’t killed off this idea (can you imagine the wrangling that took?) and see this as a great example of service design. Museums are, after all, in the service business, delivering memorable learning experiences. Massive sums of money are put into bricks, mortar, collections and all the people needed to support it. So why not leverage those sunk costs into new and innovative revenue streams?

It makes perfect, brilliant sense to open the museum after-hours in this way. It provides an uber cool backdrop for socializing, and who knows – you just might accidentally learn something while sipping your mojito.

Starbucks is taking a page from Toyota’s playbook in their new focus on streamlining the coffee-brewing process. From bending over to scoop coffee from below the counter, to eliminating idle moments waiting for expired coffee to drain, an 11-person team is bringing the gospel of “lean manufacturing” to more than 11,000 Starbucks stores.

According to the Wall Street Journal, Starbucks says the efforts are already helping its bottom line, as shown by quarterly results last month that beat analysts’ expectations. However, there are some employees who fear that the new efforts will turn them into coffee-making robots.

This focus on streamlined operations is an interesting complement to the other tack that Starbucks is taking with some of its stores in “de-Starbucking” them. Stores across the country are being revamped to look like locally-owned coffeehouses, complete with local artwork, baked goods and live music. The stores go by the name of their street address i.e. “250 Chestnut” and have drawn mixed reviews from observers. While some accuse Starbucks of going “stealth” in trying to pretend to be a local small business, customers who have actually experienced the stores give them high marks for being much more community-oriented, fun and funky than their corporate brethren.

Turning a ship the size of Starbucks is a slow and daunting task, but we give management credit for both their initiative and imagination. This is a great example of service design in which they’re using both sides of their brains; focusing on both mechanics and aesthetics, to improve both the bottom-line and the customer experience. How can you do the same in your business?

Longing for a taste of the good ol’ days? The John W. Hartman Center for Sales, Advertising & Marketing History at Duke University just posted thousands of television commercials created or collected by the D’Arcy Masius Benton & Bowles (DMB&B) advertising agency, from the 1950s to the 1980s. From American Express to Vicks VapoRub, they’re all here. (Did not remember the spots for Fluffo Shortening, but they’re all here too!)

Click here to jump into the time machine.

From Wikipedia: “DMB&B was established in November 1985 by the merger of the Benton & Bowles (B&B) and D’Arcy-MacManus Masius(D-MM) advertising agencies. DMB&B created the original Santa Claus icon for a Coca-Cola ad, as well as the slogans “This Bud’s for you” for Budweiser and “Melts in your mouth, not in your hands” for M&Ms. They were acquired by Publicis and closed in 2002.”

These ads reminds us of simpler days, when advertisers could simply blast a clever message out through the limited media channels (NBC, CBS, or ABC) over and over and over, to win the hearts and minds of American consumers.Today, the challenge is much complex and requires actually listening to consumers and speaking with them, as opposed to at them.

Unfortunately, we’ve seen too many current-day ad agencies who are still stuck in the time machine, longing for the “good ol’ days.” This is where service design can help.

We have posted four new videos today which cover a range of topics related to service design. Click here to check them out.

We recently came across an amazing service designed for kids; a Brooklyn, NY storefront appears to cater to outfitting superheros for his/her next crusade. The shelves are lined with tools of the trade – invisibility paint, capes, deflector bracelets, and bottles of chaos and anti-matter. Customers are treated as real superheroes throughout every facet of the customer experience – and take an oath when they leave the store not to share trade secrets with “villains.”

An actual business generating real revenue, this novel idea actually creates a comfort zone for the real business in the back-room; a non-profit creative writing and tutoring center called 826NYC.

Imagine students, who are hesitant at best when their parents sign them up for extra help (equaling extra homework.) Now they enter a cool and unique storefront, and get to the tutoring center through a secret bookcase in the back wall. What kid wants to walk into a storefront that says “Tutoring Center?”

826NYC is the second in a series. A pirate supply store called 826 Valencia, located in San Franscisco, was the first tutoring/creative writing center and was the brainstorm of Dave Eggers, author of the Pulitzer Prize finalist novel “A Heartbreaking Work of Staggering Genius.”

Since then, sister sites have popped up all over the country with different themed storefronts. Seattle has a space traveler theme and 826 Michigan is a robot supply and repair shop.

Many times, we assist our clients in finding new service design concepts in the most obvious places. This story also shows that sometimes you have to “zig” when logic would tell you to “zag.” Kudos to Dave Eggers and everyone involved with his tutoring program for thinking differently in order to help kids bridge the gap between their own inner hero and their schoolwork.

Click here to see a Dave Eggers discuss this project at the 2008 TED conference.