Apollo – reinventing the bookstore
Apollo used to be just a bookstore. Videoplanet rented films. Filmipood (literally “movie store”) sold movie DVDs and music CDs. All three were conventional brick-and-mortar stores and finding it increasingly difficult to keep up with the adoption rate of digital devices and content. This is the story of how, over the course of several years, Apollo reinvented the way people consume content and spend their free time.
As a result of this process Apollo has seen a 200% increase in registered customers and a 300% increase in interaction frequency. This was achieved by unifying different entertainment and content brands into a single experience under one roof. The above outlets were combined under the Apollo banner, and the new Apollo has become a destination for entertainment. It has not only redefined the bookstore, but has also entered and completely changed the cinema market in Estonia, significantly improving the customer experience and consequently customers’ loyalty to the service provider.
The new Apollo concept is designed around the desired customer experience, not around the products or services on sale, because they are universal and created by global publishers and studios. Together with the client, then a holding company called Rautakirja Estonia, the team illustrated the customer’s point-of-view: “WHY do we have 7 different brands with competing content while providing no synergy either to customers or the company?”
As a first step, the designers mapped the touch-points of existing retail brands to their customers. This provided an understanding of the Rautakirja’s organisational capacity on the one hand, as well as the customers’ expectations and behaviour on the other. This helped to clearly illustrate the urgency of the coming transformation due to the paradigm shift from analogue to digital content delivery. What could Rautakirja offer, if content is digital and entertainment options are limitless?
The new service concept was designed to unify the customer experience, bringing three customer needs together into one physical space.
a) shop: a space that satisfies one’s needs to find new content. Bringing together e-readers,
books, music, films, board games as well as toys from the latest blockbusters all the way to stationery;
b) food: hunger is entertainment’s worst enemy. Different food concepts, depending on the
location, were introduced offering everything from freshly squeezed juices, artisan coffees to healthy handmade sandwiches and snacks;
c) cinema: movies can’t be made better, but the movie theatre experience can be. Apollo offers three different seating formats including the opportunity to order and eat real food while enjoying the show.
The service concepts have been in constant development since 2010 and culminated in the 2014 opening of the first combination Apollo store and cinema multiplex. Three new Apollo entertainment centres have opened since, making Apollo the number 1 entertainment brand not just in the minds of customers, but also in terms of sales for books, music, films and cinema in the whole country.
The service design process
Apollo was one of seven brands under Rautakirja Estonia, a holding company. With considerable office politics and departmental focus undermining cooperation, getting the right people’s attention was not easy. Before the services and customer experience could be improved, everyone needed to understand the current situation.
Through qualitative research, primarily in-depth interviews with customers as well as staff members in various positions throughout the holding company, designers revealed that while customers were aware of several of the brands, none of them offered anything unique that would help to build long-term loyalty. Furthermore, internally managing 7 brands was clearly inefficient and the cost of marketing as well as personell training for different retail system, was a cost that was delivering little benefits. The 7 retail brands delivered 7 different customer experiences that created everything from indifference (no idea where they bought something) to indignation (eg. charging for compulsory customer cards).
The weaker brands were identified, which along with obvious trends in shift to digital, made focusing on the stronger brands a reasonable decision. A clear target was defined: people should remember WHERE they bought something, not just WHAT they bought.
However, the structure of the holding company, with its entrenched manner of working was making implementing changes difficult. This finally lead to a management buyout, which allowed the strategy and vision for the future to be implemented, reducing the brand portfolio to Apollo and extending its reach beyond books. In 2013 fifteen Apollo entertainment stores were opened, in 2014 the Apollo’s first Blender juice bar was opened, which was soon followed by the first Apollo cinema in 2015. In February 2016 the brand’s flagship Apollo center was opened in one of the busiest boroughs of Estonia’s capital.
The working process, has been continuously iterative, following the pattern of discover, define, develop and deliver.
– Qualitative and quantitative research with customers and staff to determine opportunities and threats
– Customer journey and touchpoint mapping
– Benchmarking of similar industries and similar challenges / solutions in different industries – Trend spotting
– Ideation of various possible solutions based on defined customer needs, including researching and testing competitive solutions on foreign markets. Workshops to narrow the options to viable versions.
– Prototyping and testing concepts, both analogue and digital. For retail concepts with consumables (food, drink) live testing with target groups. Walk throughs of retail spaces and co-creation with both customers and architects.
Delivery of final concepts
– Primarily in cooperation with interior designers, architects, graphic designers and brand specialists, communication and business management. Continuous monitoring of implemented solutions and follow-up research with customers as well as benchmarking trends around the world.
For customers, the most obvious benefit is the unification of content under one brand. As the market is still very competitive, the usefulness of a single incentive program for everything from books to fruit juice makes loyalty worth while.
For the company, an increase in the incidence and value of purchases has proven the merit of customer centric service development. The organisational change that the management buyout instigated has resulted in a completely new organisation, that now as default considers value for the customer as the primary driver for the development of new products and services.
The number of repeat (loyal) customers has more than doubled from 110 thousand in 2012 to 250 thousand in 2016 and the average purchase has increased 65%. For the cinema, which had 0 customers in 2014 now commands the top spot in Estonia 1,3 million visitors (out of a national population of 1,3 million).
“Being involved from day one, and looking back now, I must admit that we are proud. We have learned and changed our mindset about what we do and why we do it. Changing the focus of our business to our customers’ needs from our products has helped us not just to survive, but to take a huge leap forward. I only wished that we would have had a better understanding at the beginning of our cooperation with Brand Manual, as to where it would lead our brand, our organisation and our business.”
– Mauri Dorbek, CEO of Apollo Holding