Birth of the Shopping Cart
The first rolling shopping cart was created by a Piggly Wiggly owner in Oklahoma City. Once a regular basket got too heavy, customers headed straight for the check-out line. This robbed stores of incremental sales.
So in 1936, that store owner introduced a rolling cart to make shopping easier. In CRO terms, he reduced the friction of shopping to increase average order size. The design went mainstream in the 50s. It has remained a retail “best practice” up to today, even making the jump to ecommerce.
But is it still the best way to reduce shopping friction? Is it really the best way to make shopping easier and more enjoyable?
Or are we mindlessly applying “best practices” instead of doing the hard work of designing customer-centric shopping experiences?
Another Industry Rethinks the Customer Experience
Until about a decade ago, the design of an average movie theater was essentially the same as it was at the birth of cinema. The design, that itself was borrowed from live theatre.
Except in live theater, the majority of the money is made from the sale of tickets. And they usually have an intermission to increase the sales of refreshments. In cinema, the dynamic is the exact opposite. Up to 40% of the theatre’s profits come from concessions and there is no intermission in the middle of a movie. And with no intermission, who wants to get up in the middle of the movie and buy more popcorn? That creates a lot of “friction” when it comes to patrons buying more concessions!
But, of course, nobody thought to rethink the basic design of theater until they were faced by increasing competition from the first wave of disruption from the digital revolution. Netflix, RedBox and Video on Demand had already put most video rental stores out of business. It looked like movie theaters would follow the same path of self-destruction.
Then movie houses like the Alamo Drafthouse, looked to re-think the movie watching experience from the perspective of the customer.
- First, why limit concessions to popcorn, chocolate raisins, and soft drinks? Why not sell beer, burgers, and cocktails?
- Second, why not let patrons order more food and drink from their seats?
- Third, why not design the theatre with cabaret-style tables stretching in front of each row of seats and auxiliary aisles between rows facilitating waitstaff service?
- And while we’re at it, why not let patrons reserve their seats (and pay more for premium seating), instead of doing open seating?
- Finally, why show only first run movies? Why not bring back fan and cult-favorites, so people can relive their favorite movies by seeing them on the big screen?
To quote the founder of Alamo Drafthouse, Tim League:
“You need to think about the customer experience all the way through, from buying a ticket to arriving in the parking lot to watching the movie to leaving… So much of what we do is trying to make the Alamo experience special.”
As a result of this customer-centric redesign, Alamo Draft House makes roughly double the amount of money per movie screen as any competitor — $917K per screen for Alamo Drafthouse, compared to $517K, $403K, and $442 for AMC, Regal, and Cinemark theaters, respectively.
How Retailers Can Implement a Similar Strategy
Retailers need to understand the benefits of the in-store experience to a consumer, just as the Alamo Drafthouse started by recognizing the benefits of the in-theater experience to the movie goer.
So what is the core value of an in-store shopping trip? In three words it’s Discovery, Trial, and Instant Gratification.
And once we start with the idea of how to improve and amplify those attributes, the obvious question becomes: how does the traditional shopping cart and cash register fit into that equation?
They don’t. If anything, they are often the least favorable part of the experience and they were a logistical answer to a technological limitation that most stores no longer suffer from. If you have all your inventory on shelves and the customers have to go to the inventory (instead of vice versa) and if those same customers then have to bring their stuff to a set location for you to process their payments, then you need carts and checkout counters.
But what about shopping itself demands that kind of set-up? Isn’t it possible to design a better retail experience that doesn’t run off of that model?
Well, just ask Apple.
In May 19, of 2001, the first retail Apple store opened at Tysons Corner. There were no checkout lanes, nor were there shopping carts.
Instead, the store represented Steve Jobs and Ron Johnson’s vision for what retail should look like. And to this day, no other physical retailer has matched their success. According to Fortune:
“Saks, whose flagship store is down the street, generates sales of $362 per square foot a year. Best Buy stores turn $930 – tops for electronics retailers – while Tiffany & Co. takes in $2,666. Audrey Hepburn liked Tiffany’s for breakfast, but at $4,032 per square foot, Apple is eating everyone’s lunch.”
The Keys to the Apple Stores’ Success
The first key has been a store design aimed at improving and facilitating Discovery and Trial. All the products are set up for demonstration and use by shoppers. They can play with all the toys and discover what they want.
If you go to an Apple Store to buy a laptop, you won’t walk by rows and rows of boxed laptops that take up expensive retail real estate space. And you won’t put the box into your cart and bring it to the front of the store to checkout.
Instead, you’ll find a few laptops of each model out and running, all ready for you to take for a test drive. You’ll also find a passionate, store employee eager to help you discover the laptops features and to figure out which model might be best for you. They can also suggest or recommend accessories and features you might want, so you can get the instant gratification of getting a complete set-up all in one trip.
And if you find the laptop you want, the second key comes into play: reducing friction. That same employee can take your payment right there, and have the boxed model, along with any software and accessory purchases, brought directly to you.
Or, if you perhaps bought a heavier desktop model, Apple can arrange for delivery of your computer directly to your home. Not only do you not have to cart the computer around the store and to a checkout, you don’t even have to cart it out of the store and into your car.
A Simple Challenge!
Your challenge is to imagine what in store retail would look like if we concentrated more on increasing Discovery, Trial, and Instant Gratification, and decreasing friction, while deciding to ditch the previous century’s “best practices” of carts and checkout lines.
Some ideas from some of friends:
Dave Jenkins would want to see a hardware store with a workbench and a concierge that talks about my project with me, while a robot caddy brings tools/materials and we sort of do a ‘dry-run’ walk-thru of the project right there. Or for an electronics retailer, a cafe where he can poke/play/manhandle the demo equipment, then say ‘yes’ and walk out with the new stuff.
My brother Jeffrey thought about the grocery store. He wants to walk the aisles at the supermarket and point my phone at stuff I want and then head home to await delivery. While there are stations with participatory cooking demos (not just ordinary demonstrations but more like classes) and the ingredients all right there on hand. Like Blue Apron live and in person.
Jonathan Miller describes his ideal retail experience.
I walk into a store. It’s clean & bright.
My concierge shopping assistant greets me and I sit down for a cup of coffee.
He/she asks about my needs, what i’m after or what the event is i’m shopping for.
We set parameters and a budget and while she inputs the info into a Microsoft surface type interface which has AI that can accept my query and also recommend based on my previous purchases, i sip the organic coffee she ordered me.
We find a dozen matches, which i then can discard or save, eliminating and adding as we go.
Within 10 mins i have it down to 3 shortlisted items.
I select two, one a gift I came in for, another an impulse purchase for myself.
The concierge orders it, with gift wrapping and a card, while I order another coffee.
In return for my card, which she swipes, the concierge gives me a printed transaction reference and a pickup time, 7 minutes away.
I finish my coffee and walk to the exit, picking up my shopping as i exit.
Think I’m being far fetched? Check out B&H Photo in NYC. It’s not as slick as my imagines shopping space, but their automation rocks.
David Melamed imagines a different retail future:
I drive up to valet. Go into the store, all my usual items are automatically loaded into my car and paid for, I walk the aisle doing some browsing.. As I find things I like, a proximity sensor pushes a notice to my phone with expanded info on the product with reviews and Amazon’s price…if its cheaper elsewhere, I can one click order it…if not, I add it to my cart on my app and once I confirm I want it it gets loaded into my car… I walk to the store opening and my car fully loaded is waiting for me.
Linda Bustos points out:
“I think it would really depend on the context – both shopper and product. Millennial-oriented shopping I think this could pick up fast. Would be slower adoption or resistance among other demographic groups. We’ve seen this for years with online/mobile shopping and catalog. I’ll also throwback to your “buying modality” framework and suggest that removing the human interactive element will be more of a negative for certain folks. In my opinion, we’ll have a period of time, perhaps a decade, where this runs in tandem. Seamless digital for the digerati, and conventional retail for the rest.”
Bobby Hewitt pointed out Disney World works that way.
“In a recent trip I purchased items and they shipped them back to the room for me, other items they shipped to my house.”
Much of the technology has been evolving since Apple opened their first store nearly 15 years ago and a lot of the pieces are already in place in several retailers. What would retail look like to you if the shopping carts and baskets went away? How could retailers change the experience for you?