IoB Insiders – Nick Lansley says retailers must concentrate on reducing the friction for shoppers, using the example of the new Amazon Go store, if they want to build customer satisfaction.
Some three years ago, I was invited by Tesco’s London Format team to explore how we could use innovation techniques to enhance the customer experience in their small Express and Metro stores.
When we started our meeting, I presented a list of ideas that I had seen from start-up companies engaged in this area. The team looked aghast; “Nick, these are great extra experiences we agree, but when we said ‘enhance customer experiences’ we meant, ‘take some experiences away’. I looked aghast back at them, wondering what they meant. ‘Let’s visit one of our stores this lunchtime’, they said.
The store we visited was in Dean Street, Soho, close to the border with Oxford Street in London. The customers visiting that lunchtime were mostly workers from nearby shops and offices on their lunch break looking forward to the discounted Meal Deal of sandwich, crisps and drink.
Most of the supermarket chains have these deals; making them a popular choice for many at lunchtime. The challenge was that more people were entering the store to purchase the Meal Deals than could be processed by all the checkouts, creating a significant queue.
“Queuing: That’s the experience we want to take away!”, said the London Format team. “Is there anything you can do?”.
As we continued our stay at the store, a moment came when someone decided to walk out without paying for their Meal Deal. A burly security guard sprang from a nearby monitoring station to deal with the individual, but it made me realize something: The customers having the best experiences in the store were shoplifters! They walked into the store, chose the items they wanted, and walked straight out again. No queuing for checkouts. OK, so their positive experience was terminated by the security guard, but up until then…great!
My immediate response was, “So, supposing there weren’t any checkouts?”. Hearing that I was thinking about turning all customers into shoplifters, it was time for the London Format team to look aghast again.
Killing the queue – at Tesco and with Amazon Go
Back at Tesco Labs HQ, we set ourselves the challenge of eliminating queuing. Living in our world of innovation we imagined the perfect experience of customers walking into a store, choosing their products and walking straight out again. Then we stepped back into reality to see how much of that utopia we could reproduce, and modeled various variables from store design to customer flows and checkout technologies.
Finally, we agreed our innovative solution with the London Format team – then took over the Dean Street store for a week.
And it worked. Customers flowed through the zone and appreciated not having to queue. The checkout was reduced to tapping a contactless payment card on a terminal, and a mobile payments app performed the same duty. For the week, customers wanting to buy the Meal Deal didn’t have to queue.
The Tesco Labs report from the experiment was delivered to the property team, and I’ve noticed that its insight is already informing their store design choices.
The reason why I recount this story is in response to the news of Amazon Go, the new frictionless grocery store experience being tested in Seattle. Tesco Labs brought to life their version of Amazon Go three years ago, and the results are in for Tesco to use in future store design.
If you have a dedicated innovation group inside your organization, they can bring this experimentation quickly to fruition on behalf of your customers to test the boundaries and help you experience the future. Optionally, without looking aghast…
Nick Lansley, innovation insider, Nick Lansley’s Innovation Lab