Frictionless. Is that the ultimate goal in retail?
While I was growing up, I worked in one of my father’s convenience stores and, unknowingly, was on the cutting edge of frictionless transactions—before the term was even invented. This is how it would work: If a customer wanted curbside service, he or she would drive up to the front of the store and honk her horn. I would run outside, whatever the weather, and find out what they wanted to buy. Having received their order, I would run back into the store, select the items, ring them up, and run them back out to the car. Upon delivering the news of how much the items cost, I would be handed cash to pay for the purchase. I would then re-enter the store to get change and return it to the customer who would then go on her merry way to continue whatever other tasks they had planned for the day.
This transaction relieved the customer from having to get out of her car, enter the store, search for products, make a decision about which one to buy, interact with the cashier and carry the groceries out to their car. Instead, she could remain in their car, listening to the glorious sounds of AM radio. In hindsight, the transaction was frictionless for everyone but me.
Speed and Ease
The idea behind frictionless retail is that the barriers that slow down a retail sale are removed so that the customer can finish the transaction as quickly and effortlessly as possible. Today, when you are making a purchase in a store, you can just tap your credit card or waive your phone over the payment terminal. Online, there is one click check out where the computer does all of the work for you. Loyalty programs, personalized marketing and digital coupons are all bundled into the transaction or the app. Speed of service and customer ease are the key objectives.
You see this type of frictionless retail growing across the full spectrum of the industry, from full-service restaurants and dry goods stores, to QSRs and grocery stores. But the convenience and fuel-retailing industry, as a whole, is lagging behind in providing its customers with the same flexibility that these other retailers provide to their patrons. Notice that I said convenience and fuel. It is the fuel component of our business that is causing the disconnect.
Frictionless Nirvana
This was an intrinsic part of a discussion that the Convenience Technology Vision Group had during a breakout session of a group of c-store retailers and five of the leading POS suppliers to the industry. The discussion ranged from the advantages of having more integrated POS systems to the idea of “de-coupling” the components of a POS system so that they are interchangeable. There were pros and cons to both strategies.
More specifically, we asked: How can small and midsize retailers have access to loyalty programs that can be personalized to their brand and offer the frictionless benefits that their customers are looking for, such as rewards and in-app payments? Can these loyalty programs allow all retailers to create promotions and discounts that speak directly to the buying habits of their specific customer base? And, the big question, can an app tie fuel sales, store sales, loyalty, marketing and payment options together so that the customer only needs to click once—one app to rule them all?
Speed of service and customer ease are the key objectives.
The bottom line, as shown through the resulting Vision Report, is that the convenience industry needs to innovate to keep up with other retail segments and provide the consumer experience that our customers want.
The only way that we are going to achieve a frictionless Nirvana is if everyone—retailers, solution providers and major oil companies—can break out of their silos and talk to each other. Technology is moving very fast and, more importantly, consumers are adopting new tech at the fastest rate ever. If those of us selling fuel don’t adapt and innovate, our current POS fuel technology is a competitive disadvantage.
This doesn’t mean that every store needs a car hop, like I was back in the day. But it is imperative that we meet the expectations that other retailers have set for our customers. Friction is how you get burned.
Roy Strasburger is CEO of StrasGlobal. Contact him at roy@strasglobal.com.