Over the last 10 years, there has been a lot of talk and much evidence on how eCommerce is transforming the retail world. The effect online commerce has had on music, film, and books is fairly obvious. The effect is now spreading to other sectors such as fashion.
The reason for this is normally a list populated with the usual suspects such as greater convenience, more choice, and better prices. However, I think there is something else lurking away in the bowels of this new experience that has given it the impetus that it needs.
Happiness happens on the way out more than on the way in
Nobel Prize winner, Daniel Kahneman, one of the pioneers of Behavioural Economics, ran a series of experiments in the 90s which formulated the idea of how we arrive at the thought of happiness through both experience and memory.
What he found was that our experience and how we remember it could be quite different.
Kahneman looked at patients undergoing a colonoscopy. (Note: You can keep reading because I am not going to go into any details of what happens during such a procedure, so if you’re having lunch, it is safe to continue.)
All I will say is that such a medical procedure can be very uncomfortable and cause slight pain throughout. What the findings showed was that patients who experienced discomfort toward the end of the procedure remembered it as a bad experience. This was the case even though there had been little or no discomfit for most of the procedure.
The researchers slightly changed the procedure to something that sounded counterintuitive. You would think you would want to literally, be in and out as quickly as possible. This would be the most convenient process.
The researchers actually lengthened the time of the procedure. They added a few minutes to the end. They ensured the patient was comfortable and the discomfort was minimised as much as possible. Patients saw the experience as a positive one and were much happier with it because that was basically the last thing they took away from the experience and what they committed to memory.
Ok, so how does this relate to the ins and outs of eCommerce?
If we were to take this example and overlay it onto how we experience and remember buying something online, I believe you can see a very important correlation to why eCommerce has become such a serious pastime.
Think about your experience of buying a suit at a department store. You go in, you see the choice available, you get to interact viscerally with the quality, you can try it on, and you can get feedback from the floor attendant, “Wow, that suits you beautifully.” That is a really good experience so far. But what happens next?
You decide to take the suit. “I’m sure you’ll be very happy with it, Sir. Here you go. Could you please take your purchase to the counter over there and pay.”
The floor attendant hands you the item and points you to a line that leads to a cash register. You line up behind a couple who are having trouble deciding which card to put their purchase on (“Not the Visa, use the Amex, we get more points” “Oh, right, I know that card is in here somewhere.”).
You have to go through the small talk with the Cashier (“Going back to work after this are you?”). For the first time, you actually really notice the cost (“Oh my God, imagine all the other things I could have purchased with that amount. Well, if I don’t have lunch for the next three weeks, I may just be able to ….”). The really good experience has been slightly dampened. And what is the last thing you remember about it?
What’s the last thing you remember about your online shopping experience?
Now think about the online shopping experience. It all works the other way around. You go to a number of websites to see if you can find the right suit for you. There it is, at a great price.
You wish you could try it on to ensure it fits because you know you look nothing like the model. You wish you could touch the fabric, look at the lining, and feel the quality. But you still pull out your card and make the purchase.
And from here, the experience really starts working. You receive an email telling you your order has been received; you relax. A few days later, you receive an email to tell you that your order has been shipped and should be arriving in a couple of days; anticipation starts to build, and you get a little excited. Then it arrives, and it is like a gift. You actually unwrap it like a gift.
I worked at an eCommerce startup many years ago and all purchases were despatched in a beautiful hard-cardboard box that was secured with a colourful bow.
I actually watched it being delivered to a number of offices where everyone stopped working and looked up to see what wondrous object would emerge. I purchase from Mr Porter, and each item is wrapped with a sticker that has Mr Distefano on it. I get to unwrap every item, which is personally addressed to me.
When you receive your Amazon Kindle, you turn it on, and it says “Hello Joe” (well, that’s mine. Hopefully, yours will display your name).
Note the difference in the experience. If done right, the last enduring memory of the online experience is one of surprise and delight. The monetary transaction is no longer in the frame. In most cases, it is a good news story.
My experience with “breakages and returns” is approximately 1 to 2%. So, you should be able to get this happy memory well over 90% of the time. If you have a look at ebay.com.au sellers, in the main most are in the 95% to 99% positive feedback range. I don’t know about you, but I would feel uncomfortable buying from a seller with 98% or less.
However, the real opportunity here is the enormous scope to improve for each experience. For example, look at how Apple Stores are trying to get rid of the line at cash registers. Perhaps department stores could offer to deliver items to select customers personally.
And how do eCommerce stores get over the lack of physical interaction? I think both experiences can survive in the same world. But that’s another story.