In the second episode of El Periscopio, our Director of Strategy and Innovation, Ferran Sespluges, interviews Amaia Calvo-Fernández, Product Manager at Sencillo, a company that has successfully implemented product servitization. This is a growing trend that is perfectly aligned with current consumer habits and is also a circular design strategy because it extends the life cycle of products.
In this conversation, Ferran and Amaia take the product as a service to the realm of user experience and product design to analyze the practical implications of this trend, which transforms the business model. These are the main highlights 😊.
Why was Simplr founded and what is its mission?
Amaia explains that Simplr was created with the mission of improving people's quality of life by giving them access to the products and services they want, when they want, for as long as they want, without the need for ownership.
"We have become accustomed to not owning everything we want to enjoy."
Why is servitization now a real alternative for companies and users?
This new model is part of a paradigm shift that includes changes in consumer lifestyles and in the economic model.
Amaia stresses that subscriptions have always existed, taking newspaper subscriptions as an example, and that this change in consumption models is spreading and making subscriptions for anything possible.
Amaia attributes this shift to a change in consumer mentality: "Today, owning a car is not an aspiration, but having access to one when you need it is. We are witnessing a change in consumer behavior, where ownership is less important than it used to be."
He also offers an interesting insight by explaining that servitization has gained prominence in the digital age, enabling the design of hybrid products that incorporate both a physical and digital (phygital) component.
As Amaia exemplifies, Hybrid services are those that used to be purely physical and tangible, but now, by adding a layer of services (made possible by digitalization), they become something more. To illustrate this, she refers to health bracelets, which, beyond being a physical product, offer the possibility of tracking users' health data.
Is there a direct relationship between servitization and circularity?
While servitization and circularity are not always directly related, there are some sectors where it is clearly a circular design strategy.
"In technology, specifically, subscriptions allow products to have a longer life cycle by finding new users who want to use them again."
Simplr, through technology rental, enables its partners to incorporate circularity into their business models. They provide a platform that allows consumer electronics companies to publish their used products for new owners, integrating subscriptions into their business model.
Amaia explains it well: "Simplr is a channel that connects users and companies to extend the life cycle of their products. Companies reach customers who are looking to consume explicitly through subscription, creating a network of companies and consumers."
What should manufacturers consider if they want to implement servitization?
Due to the limited availability of product-as-a-service providers in Spain, there is a clear lack of competitive pricing. However, Amaia emphasizes the opportunities for servitizing the sale of products, but manufacturers need to consider the following factors:
- Product as a service is not an outlet; it is a business model.
- The product extends its life cycle and has multiple owners, which requires planning logistics, repairs, insurance, etc. It must be a profitable business for both the company and the consumer.
- Companies need to think about what added value they provide. What happens if the product breaks? Device security? Do they come with pre-installed software or applications?
- Customer retention is key. Users are not owners, they are subscribers and we need to retain them.
"With servitization, we no longer have a unique relationship with the user; we become their regular service provider and this experience must be designed differently."
Tips for optimal service design?
Amaia acknowledges that service design is a long process, but stresses the importance of focusing on moments of truth, which are crucial moments that influence whether the user continues to use the service or not.
"The moments of truth in service design are those in which users form their perception of service quality. Companies must identify and optimize these moments to create a successful experience and determine when users can stay or leave."
"Life as service" is Simplr's motto. Is your goal to service everything?
Amaia mentions Angel Bou, the founder of Simplr, who envisions Simplr as a lifetime operating system that allows users to activate and deactivate products as needed without owning them.
"My biggest dream is that on our planet, goods can circulate between hemispheres according to the seasons, so that consumption doesn't have to be duplicated. For example, fans are seasonal products that are only used in summer, but can be consumed in the opposite hemisphere when we are in winter."
What is your view of the product as a service?
Companies are prepared for this model change because subscription-based consumption, especially in the consumer electronics sector, has become a necessity due to factors such as employee turnover and remote work.
"While the environmental aspect is an advantage, for companies, this model aligns perfectly with their business needs, making technology rental a financially viable option."
In conclusion, servitization offers numerous opportunities for companies and aligns perfectly with the aspirations of consumers and the needs of the planet. This paradigm shift will be driven by both consumers and the current economic landscape.
