Thursday, April 4, 2019

When retailers INTRODUCE friction

This post includes a discussion of a product offering from my own employer - but I have a good reason for doing this.

But before I toot my company's horn, I want to talk about the concept of a "frictionless" experience.

While the definition has evolved over the years, the basic meaning of a frictionless experience is to make it as easy as possible for customers to purchase goods and services.

And there's a dramatic financial incentive to make shopping frictionless - roughly 70% of online shopping carts are abandoned without the customer purchasing anything, a potential loss of revenue for the company. The same thing can happen at old-fashioned physical stores, except that in this case the abandoned shopping carts are real shopping carts - and if there's frozen food sitting in an abandoned shopping cart, you have to deal with both lost revenue and lost inventory.

Which brings me to my employer IDEMIA, and a story about a university dining hall.

By PCHS-NJROTC - Own work, CC BY-SA 4.0, Link

You can imagine what those can be like; assuming that the dining hall doesn't use an a la carte system, the basic question that you have to answer is whether you are entitled to a meal. Some students buy meal plans that let them eat every meal in the course of a week; others only buy a limited number of meals a week. However, all students are only allowed to eat one meal at a time; the student can't eat lunch at 12:05 and then have the same student - or a buddy - eat the same meal at 12:45. So everyone has to get in line - and the lines can get long, causing...friction.

Back in the spring of 2016, the University of Maryland decided to improve the dining hall process, and worked with several vendors, including one of IDEMIA's predecessor companies, MorphoTrak, to come up with a frictionless solution. This solution included a product, called MorphoWave at the time, that allowed a user to wave his or her hand to be identified, rather than dragging out a student card or a punched meal ticket.

The result? Faster, frictionless processing of students, most of whom are processed in under two seconds.

Now a lot of companies are coming up with a lot of frictionless solutions to make retail purchases either. For example, think of the various "pay" apps on mobile phones that allow you to easily make purchases without removing your wallet from your pocket. All of these tools make it a lot easier to buy things, and retailers are reaping the financial rewards.

You'd think that all retailers would be striving to achieve a frictionless experience to increase sales.

But some well-known retailers are moving in the other direction.

I was recently buying bubble wrap in a Walmart (yeah, that Walmart). I found the bubble wrap with no problem - and if I hadn't been able to find it, Walmart has an app that can show me where it is. I then purchased the bubble wrap - while I used a physical credit card to do this, Walmart has an app that lets me make the purchase more easily if I want to use it.

So everything was going smoothly and without friction - until it came time to leave the store.

As I neared the exit, I ran into a line of several people. No, they weren't talking with the greeter (I don't think our local stores have greeters anymore) - they were having their receipts scanned by the receipt checker.

It turns out that this Walmart was not only requiring every customer to have his or her receipt scanned, but also requiring that one of the recently purchased items also be scanned - presumably to make sure that the receipt actually corresponded to the items that the customers were carrying out of the store.

This caused friction - not only in a delay in leaving the store, but also in personal irritation.

There's a financial reason for receipt checking, just as there is a financial reason to make (legitimate) purchases as easy as possible. The financial reason for receipt checking is something called "loss prevention" in the industry, which is a fancy word for stopping people from shoplifting.

By MJOHN - Own work, CC BY-SA 4.0, Link

Now there are a variety of ways to reduce or prevent shoplifting, including electronic article surveillance (via tags), video surveillance, keeping expensive items in locked cabinets, and enclosing small expensive items in hard plastic packaging that can only be removed by nuclear weapons.

But receipt checking offers one clear advantage over other methods of loss prevention:

Unlike the locked display case, it doesn't interfere with the customer experience until after the purchase is complete.

The store's already made its money - it's just hassling customers on the way out the door.

Now some people are getting so angry with receipt checking that they're filing civil complaints and complaining that stores are violating the Fourth Amendment of the U.S. Constitution when checking receipts. Before going down that road, however, it may be a good idea to see what the Fourth Amendment actually says.

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

"But dude!" you might say. "That Walmart checker was conducting an unreasonable search and seizure on you! She should have gotten a warrant!"

However, you have to remember that the Fourth Amendment, like the First, is designed to constrain the actions of the GOVERNMENT. It was written to prevent a GOVERNMENT OFFICIAL from unreasonably searching you. Walmart is not a governmental entity - not even in Bentonville, Arkansas.

So in the same way that private businesses often do not have to guarantee freedom of speech - if you espouse socialist principles, or talk about making the country great again, the First Amendment can't stop you from being fired - private businesses are not necessarily constrained from asking you to prove that you bought the stuff you claim that you bought.

So don't claim that Walmart should be hauled to the Supreme Court for checking your receipts.

On the other hand, the last I checked, Target wasn't making you wait in line to leave their stores. Just saying.
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