There are three major trends, two of which often combine into a single strategy – developing ‘micro-units’ to fit into new host environments, and co-branding of operations. Host environment refers to the non-traditional kinds of location which are being used for the ubiquitous delivery of products and services. For instance, in 2003 the restaurant company Yum! created the The WingStreet brand as a delivery-based chicken wing chain within Pizza Hut restaurants.
Often micro-operations need to redesigned or adapted in order for them to fit into these new places. For instance, a stand alone fast food restaurant may have a footprint of 3,000 square metres. But a micro-unit of the operation, located in a petrol station or cinema, may have a footprint of only 600 square metres, one-fifth the normal size. To achieve this reduction in size, different types of service organisation may have to do different things. Retail operators generally have to reduce their product range, but in more complex operations, such as restaurants, not only might the product range (ie menu) be reduced, but different equipment might be needed. Sometimes this might smaller, scaled-down versions of the same equipment as in the main outlets, or sometimes this may be different equipment specifically designed for this environment.
Co-branding refers to firms that put together two or more brands into a single facility. This is an almost inevitable outcome of designing micro-units for host environments, but it can also occur when a main chain outlet is converted into offering two, rather than one, brand. For instance, in the UK supermarket brands and coffee shop brands are co-branded at petrol filling stations.
The third trend is ecommerce, which is not just the use of the internet to enable the sale of the product or delivery of the service, but also the use of social media to build a relationship with the customer. Our recent blog on Starbucks is a good example of this.