Customer experiences factually drive revenue and margins – well done Checkers

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I recently posted a LinkedIn commentary on the exceptional customer experience design in Checkers stores. I stated that it is far superior to any large retailer in SA or in the UK.

Here I will indicate what global research tells us about how what we offer customers, impacts the bottom line.

We all know Apple is successful because of its unique design features and operating model, amplified by great stores, brilliant marketing, brilliant packaging to the finest detail and an ecosystem that locks customers in. Steve Jobs famously quoted, “For Apple design is not only how a product looks, but also how it works”.

At the core of all successful business ideas is the notion of putting the customer at the centre and building the infrastructure for a company to support that. Of late, the concepts of business model design and service design have frequently been highlighted in literature.

The notion of customer-centricity is not new, just the mechanics of it expanded dramatically within a digital era.

Successful brands are built to be different or have unique qualities.

Same-ness leads to commoditisation, an issue that haunts most companies.

Brand portals like Booking.com, Expedia and kayak makes it even worse online, as they focus on the best price rather than the best brand.

Hence, difference matters. This is where design comes in. Any aspect of a business that is created around customer needs, is in some way related to design.

Design-driven companies outperform the S&P 500 by 219%”, quote by The Design Management Institute, UK. This body has done extensive research on these issues over a long period of time. Their research was complemented by McKinsey in a very comprehensive report, The Business Value of Design. To quote from their report, “We tracked the design practices of 300 publicly listed companies over a five-year period in multiple countries and industries. Their senior business and design leaders were interviewed or surveyed. Our team collected more than two million pieces of financial data and recorded more than 100 000 design actions.” These companies included products and services and the results were the same.

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They state, “Top-quartile Design Index scorers increased their revenues and total returns to shareholders (TRS) substantially faster than their industry counterparts did over a five-year period—32 percentage points higher revenue growth and 56 percentage points higher TRS growth for the period” and “the market disproportionately rewarded companies that truly stood out from the crowd”.

They state four factors as key, 1. Driving design performance with the same vigour as revenue and costs, 2. Breaking down internal walls between physical, digital and service design, 3. Make customer-centric design everyone’s responsibility and 4. Manage risk by listening to customers throughout.

Bloomingdales in NYC was the originator of big-name brands within “mini-stores”, within the larger store. It became a runaway success and even “built” the reputation of brands like Kelvin Klein. Walt Disney is the godfather of designed experiences. So is James Dyson in making mundane chores enjoyable (yes, it can be fun to vacuum!).

Back to Checkers.

Checkers creates “mini stores” that in some way, resembles a “high street” in any European town. In this manner, it creates “small customer experiences” that are all unique and engaging. The impersonal notion of “a very large store of blandness” disappears (“stack them high” with products, as Sam Walton famously said) and customer engagement becomes personalised in each micro-moment. Checkers now almost resembles a farmers’ market, where different people “peddle” their goods, yet all with their own unique character. Where quality of experience and goods are “crafted” by individuals rather than a company. Where the height of the ceiling, glaring lighting or “too-much-white” does not make a customer rush their shopping. I can imagine shoppers may linger-longer in a Checkers store.

For more information on Dr Thomas Brand, click here.

The impact is already clear in their business results.

No amount of online emulation can do the same at this point. I can see how AI can produce even greater results if it overlays onto the Checkers framework in time.

It requires problem solvers, idea generators and design partners with real insight and expertise to create these experiences within the confines of expensive retail space.

They had the support of a Cape Town design solutions company, IMS. They need to be congratulated on a world class job.

When you “unpack” how professional companies create new ideas for a business, it largely follows the “Design Thinking process”. This means generating many ideas, iterative testing them with customers, assembling multi-disciplinary teams to ensure diversity and inclusiveness as well as to speed-up implementation.

Designing anything new entails risk, it requires confidence and insight to do and is as they say, “a long game”. Once you start, you need to retain the lead.

Customers are fickle, when we “teach” them new things, they use that as the yardstick to measure all else. Today, they use their best experience with any other brand as a yardstick. If the Uber application is easy to use, it becomes the customer yardstick for how other applications are designed.

The Design Management Institute defines design as, “… design is a method of problem solving.  Whether it is an architectural blueprint, a brochure, the signage system at an airport, a chair, or a better way to streamline production on the factory floor – design helps solve a problem.” 

Design forms the basis for all customer experience. It specifies, in detail, how a customer will experience a brand wherever he or she may encounter it. It combines functionality with emotion. Standards with feedback. A responsive design ecosystem is like an organism that adapts to its environment. That all customer interfaces will be intuitive and satisfactory.

Design is inherently congruent, it cannot be fragmented, then the experience of customers is fragmented. Even though analytics and data underscore design and “post-tests” it, it must be “invisible”. I do not have to know how a car works to drive one.

For more information on Dr Thomas Brand, click here.

In the last ten years, the issue of “customer-experience” through online and offline channels, have become far more salient than before. Words like “user experience” indicates the functionality and simplicity when a consumer wants to interface with a website or an e-commerce retailer. For a customer to have an experience, that experience needs to be designed.

The dichotomy is that whilst most executives will acknowledge implicitly, in their own buying behaviour, the importance of buying the best products and services, they may not see that same value when they conceive of and think about their own products and services in their own companies. Or worse, as one survey found, 80% of the CEOs of large companies believed they served their customers well, yet only 8% of the customers said the same.

Two last comments from the McKinsey Report:

“The CEO of one of the world’s largest banks spends a day a month with the bank’s clients and encourages all members of the C-suite to do the same.”

Akia Morita, founder of Sony, spent time every year working anonymously at the check-out counters of stores (in the US) that stocked his products.

“Design is more than a feeling: it is a CEO-level priority for growth and long-term performance.”, a quote from the survey mentioned above.

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