No frills is a business model that eliminates extra services as much as possible , but does not reduce the quality of core services, and provides users with a reduced price as much as they are omitted.
By narrowing down to the minimum necessary services, we will attract a customer base that dislikes waste.
Non-frill means “no decoration”, and there are various ways to omit services depending on the company.
In many companies, airliner companies sacrifice comfort to carry as many passengers as possible.
Currently, services with non-frills as a business model are spreading not only to the passenger aircraft industry but also to various industries such as business hotels, fitness clubs, and beauty salons.
No frilling is to eliminate frills = frills to reduce costs.
Advantages of No frills
Today’s general services may be profitable with functions that are less necessary for users, and there is no need for those unnecessary functions, so there is a need to use them cheaper anyway. We have many customer bases .
LCCs have achieved such remarkable growth because many users just want to get to their destination without needing that much service on a short flight.
Of course, those who want to get existing services, even for a short time, will use legacy carriers.
Disadvantages of No frills
Customer satisfaction other than core services will be low.
The non-frilled business model basically simplifies or omits services and functions that are considered unnecessary other than the core services and functions, so the satisfaction level of services other than price tends to be low. However, the business model of non-frills is how to think about the concept of customer satisfaction, for example, if you are satisfied with the price. From there, it becomes important to draw a line that divides some of the services and functions that the company provides into core or unnecessary . For example, if you simplify or omit the elements that can be the core, customer satisfaction will drop and you will not know if you will use it from the next time.
Successful No frills
LLC (Low Cost Carrier) is a typical example of a non-frilled business model.
LLC is not a company name, but a general term for low-priced airlines such as the original American airline Southwest Airlines, Ryanair of Ireland, Jetstar and companies of Australia, and AirAsia of Malaysia. That’s what it says.
Many companies are narrowing their seats, serving food and drinks, and paying for entertainment such as in-flight music and watching movies . There may also be a charge for baggage storage. In addition, some airlines depart and arrive at suburban airports, which are inconvenient for transportation, rather than in the city center, where departure and arrival fees are expensive.
In recent years, LLCs such as Jetstar have appeared in Japan as well, and it has become possible to travel for an extraordinary thousands of yen in Japan and 10,000 to 20,000 yen overseas.
Herb Kelleher, the founder of Southwest, and others have devised a service no frill that is less necessary to reduce the expensive travel costs as much as possible and use it for many people. In Southwest, the seat width is not particularly narrow, but all seats are unreserved and seats cannot be selected.
Furthermore, in Southwest, in order to maintain the quality of flight, which is the core service, the labor cost of pilots and CAs is never reduced, and the efficiency of pilots and mechanics is improved by unifying the aircraft to Boeing 737.
IKEA is the world’s number one interior company with 28 countries around the world. Consumers take over the delivery and assembly work that the company is responsible for. IKEA is popular with DIY enthusiasts, who buy products from stores like warehouses in the suburbs, take them home and assemble them themselves.
There are many simple yet fashionable designs, and the price is reasonable, so we meet the needs of users who want to make it freely.
The pursuit of cost reduction is the best in the industry and is the basis of a non-frilled business model.
For users who like DIY, they make the materials in-house for the final assembly, but omit the assembly, which simplifies the work from packing at the time of transportation to display at the store.
IKEA is limited to product planning and market research , and parts production is a partner company in developing countries.
Goods are likely to be packed in standardized boxes Because they are displayed in such stores, the number of people in the store is minimal.
And as I’ve said many times, delivery and assembly are done by the user, so there is no cost to IKEA.
It is said that the reason why there are many users even though the work is minimal is great user experience .
A store like a warehouse has a food court that functions like a theme park, and the IKEA-focused catalogs are of high quality, stir the viewer’s imagination, and cluttered with applications. There is no stress because you can instantly find the interior you are looking for from many boxes.
When shopping at IKEA, if you find a product you like, write down the number and go to the warehouse → Find your furniture in the warehouse → Put the furniture in the cart and go to the cashier → Take your furniture home after finishing the checkout → Yourself at home The flow is to assemble furniture by hand. With this mechanism, IKEA reduces “delivery costs” and “assembly”. We have succeeded in selling products at low prices.
We are also focusing on the utilization of environmentally friendly recycled materials to reduce costs.
However, IKEA’s non-frills are inconsistent with the recently launched online shop’s strategy of not delivering to home, which has actually resulted in a 30% increase in sales, but we are paying close attention to future trends.
Business hotels generally save check-out hassle and phone calls, and focus on core quality bedding to reduce prices.
In particular, Super Hotel has a “No Key No Checkout System”, which allows guests to first receive a receipt with their room number and PIN printed at check-in. The guest then unlocks the room by pressing the PIN code on the door of the room. As a result, the company saves the trouble of dealing with customers at check-out and dealing with staff by inquiries by not installing a telephone in the room. In this way, Super Hotel has gained the support of customers by focusing on the sleep of guests and omitting other services, and the company’s accommodation fee is about 7,000 yen on average in the business hotel industry, with one night and breakfast included. We have realized an exceptional price setting of about 4980 yen. Capsule hotels can be said to be a business model that further simplifies these and pursues only the minimum sleeping place.
Curves is a fitness club founded in 1992 in the United States. .. The founder lost her biological mother early due to a lifestyle-related disease, and focused on the importance of prevention as well as treatment, and launched a general fitness club, but this did not work, and in 1992 it was special to women. You will establish a modified Curves.
Curves is a breakthrough with the concept of “ 3 M “-“No Men (no male customers)” “No Make-up (no need to make up)” “No Mirror (no mirror)” It is called a typical fitness gym, and with regard to “No Men”, you can exercise without worrying about the eyes of men, and all the staff are women, and “No Make-up” does not require the trouble of making up. There are two points: it’s easy to go through, and you don’t sweat enough to remove your makeup. Finally, “No Mirror” doesn’t have a mirror in the gym, so you don’t have to worry about your body shape.
Although it is a non-frilled model of Curves, Curves is focusing on fitness machines by removing pools, showers and mirrors that other fitness clubs should have .
By the way, Curves is also profitable in the franchise model.
The key to no frills success
Never lower the quality of core services is the key to non-frill success.
It can be said that it is the minimum necessary, but the minimum necessary.
Whether or not there is a device to improve the quality of the core service is the key to long-term support.