In the second episode of El Periscopio, our Head of Strategy & Innovation, Ferran Sespluges, interviews Amaia Calvo-Fernández, Product Lead at Simplr, a company that has successfully implemented product servitization. This is a growing trend that perfectly aligns with current consumption habits and is also a circular design strategy because it extends the lifecycle of products.
In this conversation, Ferran and Amaia bring Product as a Service into the realm of user experience and product design to break down the practical implications of this trend, which transforms the business model. Here are the main highlights 😊
Why was Simplr founded? 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, whenever 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 businesses and users?
This new model fits within a paradigm shift that includes changes in consumer lifestyles and the economic model.
Amaia highlights that subscriptions have always existed, using newspaper subscriptions as an example, and that this shift in consumption models extends and makes subscriptions possible for anything.
Amaia attributes this change to a shift in consumer mindset: "Nowadays, owning a car is not an aspiration, but having access to one when needed is. We are witnessing a shift in consumer behavior, where ownership is less important than before".
Additionally, she offers an interesting insight, explaining that servitization has gained prominence in the digital age, allowing the design of hybrid products that incorporate both a physical and digital component (phygital).
As Amaia exemplifies, hybrid services are those that were once purely physical and tangible but now, by adding a layer of services (made possible by digitalization), become something more. To illustrate, she refers to health bracelets, which, beyond being a physical product, offer the ability to track user health data.
Is there a direct relationship between servitization and circularity?
Although 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 lifecycle by finding new users who want to use them again."
Simplr, through tech rentals, enables its partners to incorporate circularity into their business models. They provide a platform that allows consumer electronics companies to list their used products for new owners, integrating subscriptions into their business model.
Amaia explains it well: "Simplr is a channel that connects users and businesses to extend the lifecycle of their products. Companies reach customers who explicitly seek to consume via subscription, creating a network of businesses 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. Nevertheless, Amaia emphasizes the opportunities in servitizing product sales, but manufacturers must consider the following factors:
- Product as a Service is not an outlet; it is a business model.
- The product extends its lifecycle and has multiple owners, which requires planning for logistics, repairs, insurance, etc. It must be a profitable business for both the company and the consumer.
- Companies must think about what added value they provide. What happens if the product breaks? Device security? Do they come with pre-installed software/applications?
- Customer retention is key. Users are not owners; they are subscribers, and we need to build loyalty.
"With servitization, we no longer have a one-time 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 she highlights the importance of focusing on moments of truth, which are crucial moments that influence whether the user continues using the service or not.
"Moments of truth in service design are those in which users form their perception of service quality. These moments must be identified and optimized by businesses to create a successful experience and determine when users may stay or leave."
Life as a Service' is Simplr's motto. Is your goal to servitize everything?
Amaia mentions Angel Bou, the founder of Simplr, who envisions Simplr as an operating system for life that allows users to activate and deactivate products as needed without owning them.
"My biggest dream is that on our planet, goods could circulate between hemispheres according to seasons, so consumption doesn't have to be duplicated. For example, fans are seasonal products used only in summer, but they could be consumed in the opposite hemisphere when we are in winter."
What is your perspective on Product as a Service?
Companies are ready for this model change because subscription-based consumption, particularly in consumer electronics, has become a necessity due to factors such as employee turnover and remote work.
"Although the environmental aspect is a bonus, for companies, this model aligns perfectly with their business needs, making tech rental a financially viable option."
In conclusion, servitization offers numerous opportunities for businesses and aligns perfectly with both consumer aspirations and planetary needs. This paradigm shift will be driven by both consumers and the current economic landscape.
