The 2017 Top Ten Friction/Reward Retailers

You’ve heard me bang on about friction and reward all year, and I admit, I can’t stop thinking about them, how each can be measured, what retailers can do once they have the insight and how exciting being able to better understand and predict customer behaviours is. In this article I’ve gathered together some of the best examples of retailers pulling these levers this year. This is my list of the top ten retailers who in 2017 did the best job of reducing purchase friction and/or raising shopping reward. In my opinion. Yours might be different — so tell me! It’s all good.

You’ll notice that I have included a Friction Reward Index (FRi) for each retailer, get in touch and I’ll happily talk you through how we get to those numbers, which are the overall result of friction levels minus reward derived. We’re building a software platform to crunch existing customer research into crazily granular insight that shows these indexes at the individual shopping scenario, need state and touch-points levels. I’m doing that as part of a start up called Uncrowd, would love to talk to you about it but I’ll save the advert for another day.

My new book on all this will be published by Pearson in May 2018. It’s provisionally entitled: Friction v Reward: the Secret Relationship that Rules Your Customer Experiences. Finishing it right now and loving every second of uncovering the meat and bones of this hugely powerful approach to understanding the new realities of winning and keeping customers. That was sort of an advert, wasn’t it? You can’t buy it yet though, which makes it a stupidly high-friction advert if it was.

Right now, there’s a friction/reward revolution coming and I’m desperate to share the intelligence — so let’s kick off with these 2017 heroes of friction/reward…

Amazon

Still the ultimate friction-reducers; amazon delivered ‘easy’ again and again in 2017; the Go format moved from technological curiosity to become a genuine contender; with it amazon will go on in 2018 to make the self-service till look like the middle finger flip off to customers that it really is. No, supermarkets, YOU do the work.

With an estimated army of 65m Prime customers, amazon has delivered the empyrean heights of friction-reduction by persuading those customers to pay for the pleasure of making it easier to shop the store. Think about that for five seconds; the audacity of a strategy that has a greeter at the door parting some customers into the Prime VIP section, where shopping is faster and easier, away from the ‘ordinary people’; it’s the kind of thing we might have once thought up tired and cynical at the dying ebb of a will-sapping strategy away-day. But done the amazon way; it’s genius.

If amazon ever learns about the reward side of the FR equation, and as a result begins to deliver super-attractive retail experiences capable of drawing modern crowds keen for fun, tribal belonging and theatre then we are all toast. The acquisition of Whole Foods might be primarily about access to mature supplier relationships and a ready-made fresh network, but Bezos is still the consummate customer guy; he knows there’s treasure in the way Whole Foods made customers feel about the store.

There are a bunch of fun things on my consultant’s ‘the client will definitely say this stupid thing’ buzz-phrase bingo card; prime among them is this ‘yeah, we’re not thinking about amazon or the Apple Store, those are exceptions’. No. They really aren’t; they are where this thing goes, you don’t have to follow but you sure as hell have to learn: make it easy, make it good.

Walmart & Tasty

‘Retail is fundamentally changing’ is now as redundant a sentence as ‘one bowl of noodles is never enough’ or ‘IKEA are a bit Swedish’. When forced to explain just how it’s changing and to give specific examples that look like things customers might actually, y’know, buy into, things get trickier but we’re starting to see some genuine retail 3.0. One of the best this year came late with December’s announcement of a tie up between Walmart and Buzzfeed’s viral recipe monster Tasty.

Live already for US users of the Tasty app, many of Tasty’s signature top-down cooking videos now include instant links to buy the ingredients, utensils and cooking gadgets shown in the video. Fulfilment goes automatically via Walmart.com or Jet.com.

But Rich, this is a list of best friction/reward stores in 2017, not best initiatives; ahhh and there’s the thing, new retail will see stores exist in all sorts of weird and wonderful forms and shapes and locations. What we have here is a store that Walmart has placed inside of Tasty. To function it still requires all the basic retail disciplines, what Tasty is in this case is an extremely engaging form of visual merchandising. Make no mistake — this is a retail store and it is of a form that we will be seeing again and again over the coming years.

CW Pencil Enterprise

Surviving the potentially destructive whims of a landlord and a subsequent forced location switch, Caroline Weaver’s charming panegyric tribute to analogue proves that a super-rewarding customer experience, one that is authentic, fun, utterly and completely sincere, can transcend the friction of a physically challenging single store. Customers don’t just visit CW Pencil Enterprise, they make pilgrimages. Seriously; CW’s social media is full of stories of customers making specific journeys in extreme cases and happy detours in many more just to come and pick up a paper bag filled with hand-selected pencils and pencil ephemera.

Caroline loves pencils, and in her store has communicated that love in such an honest, charming manner; the VM is respectful of the artefact but accessible to the happy and curious browser. The store is the antithesis of arch; it is bouncy and playful, it is a store you leave feeling like your day just got a little bit better. This is reward writ large: and when the product is something as every day and ordinary as the humble pencil, it is also proof that understanding the emotional context into which your product fits is the first and biggest step towards creating spaces customers love being in.

Dollar Shave Club

Acquired in 2016 by Unilever for a billion dollars in cash, this year it appears to have sunk in for some retailers that suppliers are actively looking for opportunities to cut the ground from beneath their retail partners’ feet. Unilever how have a number of innovative, attractive and effective direct retail formats that appear to compete with their own listings at the grocers… this is happening people, Unilever and more recently Nike have thrown down soggy gauntlets to us retailers on which are written ‘be relevant or we’re off’.

But for now, Dollar Shave Club is the pinnacle of that shift. Remember when there weren’t razor blade subscription services and we all had to go down the shops and hand over five million pounds for some blades, or a quid for a bag of blunt ones? Hmm? Remember those times? Thanks to Dollar Shave Club, those days are gone if you want them to be.

What DSC have done is almost the ur-FR example; on the one side they have dramatically reduced friction by making the buying of boring razor blades much easier and much cheaper, but the reward side is big too where they have created a community, a tribe and a sense of belonging that makes customers feel special. Reward is a slippery beast but that sense of beating the system, of being in the know and of membership of a community that a customer gets from great subscription retail is massively powerful.

Screwfix

Blimey but I love Screwfix; I love it as a customer, I love it as a regular consultant to Kingfisher and I love it massively as a retail observer. That last is especially sweet given that almost nobody seems to pay Screwfix much attention but a finer reducer of friction in home improvement you will not find. And I love Screwfix because it’s a cheeky business, pleasingly free of the corporate nonsense so many retailers bury themselves under — it knows and likes it’s customers, bends over backwards to help and impress them, and it structures everything to work from the customers’ perspective rather than attempt to force customers to do things it’s way.

Screwfix have had an incredible 2017 with soaring sales and continued profitable expansion; if you are a tradesperson on a job, it makes it incredibly easy for you to find the bits you need, to swap tips and tricks with fellow professionals and wraps this up in the best click and collect operated by ANY retailer, or there’s swift delivery to site or yard. But if you’re a private customer then Screwfix has essentially transformed the forbidding Trade Counter business into a friendly and approachable deep project resource. Nobody minds when you unbox something on the counter, or when you order a part by slapping down the existing bits on that same counter. The place is full of patient and knowledgeable staff who appear to enjoy sending people away happy and with the right bits.

Eldest daughter bought her first flat recently and I had the parental pleasure of doing a few jobs for her in the place, one of which was to replace the kitchen sink and taps. Yeah, I’m not just a pampered writer, I’ll get involved with a filthy set of sink wastes! Nipped into Screwfit on the way over, order immediately ready for collection. Returned hours later for another bit, and Screwfix branches never seem to be more than ten minutes away wherever you are, this time I didn’t reach the counter or even say a word before the lad there held out a plastic bag of pre-ordered bits saying ‘Here you go Mr Hammond!’ — lowest friction purchase I have ever made, internet purchases included.

Container Store

Hands down my favourite retailer for many years now and still a supreme example of how to build reward into a customer experience. Container store essentially sells things to put other things in and things to put those things and other things on. Boxes and shelves in a million different combinations. So basic is the idea that founder Kip Tindell’s Dad asked him how he was going to make money selling empty boxes. But what Tindell knew then and has practiced throughout the history of the company is that the boxes and shelves don’t have intrinsic value, they are tools to be used to help a customer create solutions to life’s problems; to live a better life through storage.

This is where staff interaction element is critical; without it, Container Store is a nice curiosity, a place full of solutions looking for problems and the average customer who wanders in and doesn’t talk to staff buys 1.2 items. The customer who is lucky enough to be engaged by a member of the team; that customer buys an average of more than 7 items. Why? Because those staff members deliver massive reward in the form of personalised solutions for grateful customers. You might find yourself holding a letter tray when a jolly Container Store person asks you what’s got you looking at letter trays today? And you mumble that you want to sort your mail out. The staff member has asked you if your mail comes through the door or into a mailbox at the street’ They ask more questions and really listen as you answer. They walk you through your existing handling process and before you know it they’ve identified that it’s actually your hallway storage that is the problem and you eventually leave the store with seven items all of which will go towards making your life easier through better mail handling.

Now, since taking the business public, and with it bringing the inevitable Wall Street instinct to penny-shave, pressure on the Container Store model has been intense. 2017 was a good year though, with the company looking like it’s turned the expectations corner, growing like for likes and continuing to expand. The management team have resisted the pressure to downgrade wages and training and the result is a store that really can sell empty boxes in an incredibly compelling and completely relevant, significantly rewarding way.

Dominos Pizza Box Store

Launched in 2015 and as rare now as hens teeth, the Dominos Pizza Box store remains in the top ten friction/reward stores for 2017 on account of how it is simply the lowest friction retail operation in existence. It’s a tiny little pizza box containing a single button; open the box and click the button and magically your favourite Dominos order turns up at your door less than half an hour later. What also remains crazy and frustrating and perplexing is that Dominos still don’t understand what they made, nobody there calls the Pizza Box store anything other than a limited edition promo for the Dominos app.

The genius of the Pizza Box store is that it is a store in a pizza box; sure it’s dumb and limited and there’s no upsell or deals, or all the other things that make ordering pizza fun; but on the other side of the ledger IT IS A PHYSICAL DOMINOS PIZZA STORE THAT LIVES RIGHT IN A HUNGRY CUSTOMER’S HOUSE. Hungry and insanely lazy? Press the button. Hungry and pressed for time? Press the button. Creature of habit and hungry? Press the button. The friction numbers are insane on this one, if we could account for the physical friction between the customer’s finger and the air molecules that finger must breach on it’s way to pizza then we would, because there isn’t very much else. And the reward side? Pizza. Nuff said.

Houzz.com

Houzz is a brilliant navigational mess but glorious all the same; what began as a place for ‘ordinary people’ to share photos of their house renovations, and for others to explore and find inspiration, suddenly became an extremely important retailer in 2017 after raising $400m in it’s series E funding round. Houzz has gone from the side project of the founders — when they found finding inspiration for their own renovation a frustrating process of buying and clipping from magazines — to a global discovery and inspiration hub, visited by 40million uniques each month.

The hidden gem at Houzz is it’s product tagging process; if a product is ‘recognised’ within an uploaded photo of some glorious refreshed and renovated room, then Houzz automagically finds a link to the product to fulfil through it’s affiliate network. Suddenly, Houzz isn’t just a home design and inspiration network — it’s a retailer. More; it’s a retailer able to sell to a customer at the exact moment that customer is squealing ‘OH GOD, THOSE ARE THE TILES’. In our new retail reality, you snooze, you lose — competition has the potential to come at you from completely unexpected directions.

We did our bathroom working from Houzz inspiration back in 2013; I just had a look at the bookmarked pages and sure enough in the image we referenced many times there’s now a tag on the 1930s Art Deco chrome taps I spent nearly two damn days trying to source. Now, one click and there they are. This is big, this is crazy easy and very, very rewarding.

Any and All stores utilising Unilever’s Hero Images

Science everyone! It’s great and the science employed by Unilever’s brilliant Oliver Bradley, in conjunction with Cambridge University’s Inclusive Design Team, to create a structure that makes product images on mobile shopping apps easier to understand and shop, is a perfect case study on the benefits of friction-reduction.

Get the full science on ‘hero images’ here (and follow the links to Cambridge, genuinely fascinating) https://www.linkedin.com/pulse/online-shoppers-find-mobile-ready-hero-images-easy-shop-bradley/ but in essence, what Oli and the Cambridge team have done is create a way to make it much easier for customers to quickly identify pack size and variants when shopping on mobile. It sounds like such a small change, and in many ways it is, but the impact is hugely significant; in A/B testing, Unilever products experienced sales uplifts from 4% to 20%.

2017 is the year these ‘hero images’ have gone big; Unilever recognised that this work is bigger than just themselves, that improving the shopping experience overall was a worthwhile goal for FMCG manufacturers in general. That understanding has lead Unilever to generously share the templates and philosophy by making them, essentially, open source. As a result; L’Oréal, GSK, Procter & Gamble, Kellogg’s, Kimberly Clark and Johnson & Johnson have all begun to use the hero image approach. Customers respond to friction-reduction; your new job as a retailer is to give it to them.

Idea Bank

A perfectly formed little moment of lateral thought sits at the heart of Idea Bank’s huge friction-reducer: bring the ATM, on demand, to the customer. So right now there are 18 electric BMW cars in lovely Idea Bank livery whizzing around Warsaw to wherever a customer pleases. Installed into the cars are full service ATMs and customers use an Uber-like app to request a visit.

The service has proven especially useful to small retailers wanting to deposit cash; rather than making the traditional risky trip to the bank, or contracting to the expensive armoured van pick-up, a couple of taps and along comes Idea Bank. For the bank, the service has resulted in many new customers but also a big increase in it’s cash deposits, making a significant impact on their ratios and so opening up new opportunities to lend. What could you do in your retail business to shift the friction away from customers by taking it in house creatively in this way?

Amazon — FRi -10
Walmart & Tasty — FRi -10
CW Pencil Enterprise — FRi -6
Dollar Shave Club — FRi -6
Screwfix — FRi -5
Container Store — FRi -4
Dominos Pizza Box Store — FRi -3
Houzz.com — FRi -2
Any and All stores utilising Unilever’s Hero Images — FRi -2
Idea Bank — FRi -1

Find me at: https://www.linkedin.com/in/smartretail/