Increasing consumer retention by innovation-based concept design for digital grocer Crisp

Abstract

Crisp is an online supermarket for fresh and high-quality food. By using an app, customers can order groceries which are delivered to your house throughout the Netherlands. One of the goals for Crisp as a start-up is to grow. Crisp desires controlled growth, where their operations scale simultaneously with their customer base. The framework for start-up growth from McClure (2007) is used for this research. The challenge Crisp faces is to optimize consumer retention, which can be explained by comparing the acquisition rate and the churn rate (McClure, 2007). To grow the customer base, resulting in company growth, retention needs to be increased. To stay competitive, Crisp needs to continuously innovate. According to Schumpeter (1949), who published the first academic ideas about innovation, companies have to continuously introduce ‘new combinations’ in their product design to remain profitable. Hence, the following main research question is addressed. How to increase the retention of digital grocer Crisp through innovation-based concept design? By internal and external analysis, search areas, or innovation themes, were concluded. From analyzing the company, consumer and collaborators internally and the competitors and context externally, four search areas were defined: transparency, ‘doing good’, engagement and personalization. These trends could be interesting for Crisp for the development of a new innovation for their application. The search areas were used as a basis for the qualitative consumer research. Interviews were held with the goal to validate which search area would be most interesting for product development. Thirteen consumer interviews were conducted, testing four hypotheses matching the search areas. By coding the interviews, categorizing and defining the relationships between the code groups, a grounded theory was developed. The qualitative research resulted in the development of a general model for online shopping, describing the process a Crisp consumer goes through while buying groceries. From this model, the design brief was formulated describing five focus points: creative, personal, transparent, convenient and informative. Afterwards, through a brainstorming session, many selection rounds, critical discussions and design iterations, a concept design was developed for the application. The ‘weekly planning’ is an integration of customers weekly planning of recipes in the Crisp app. It offers more personal convenience, it unburdens customers in a smart way and it is an easier guidance trough shopping. As this concept is designed from direct consumer needs following from extensive consumer research, it could contribute to an increase of retention. Also, a first concept validation round is held amongst online shoppers where retention is positively validated. Lastly, conducting an A/B experiment is recommended for Crisp to measure retention after the ‘weekly planning’ is launched. Acquisition and churn rates should be measured and compared, so the retention rate can be calculated. Also, consumer satisfaction, habit and experience and service quality can be measured to quantify the increase of retention in the real app context.