Friday, 23 February 2018

Let's get physical


2018 sees the first wave of “adults” born after the millennium – those who have grown up in the digital revolution for who technology and online are mundane, every day things, rather than something to marvel at.  As the “silver surfers” begin to make way for the generation for whom life before Facebook simply doesn’t exist – what relevance will the physical world play within the new digital age?

The good news is, that we’re not yet ready to be all be plugged into the Matrix and live our existence inside a virtual reality.  In the world of retail, despite the rise of convenient online shopping, almost 85% of sales are undertaken in a physical store.  The social experience of shopping is still something that people want to experience in the physical world.  What we’re beginning to see in this sector is that online and in-store working together in tandem.  Successful retailers are joining up these two channels into a holistic customer experience.  The so-called “bricks and clicks” environment is thriving because people still value what a physical store brings. 



The following roles of a physical interaction are still incredibly important:
  • Exchange
  • Personalisation
  • Technology gap
  • Accessibility
  • Security
  • Trust


Exchange
As we’re not all plugged into the Matrix, we still need physical things.  Some of these are “legacy” items such as documents that have not yet been digitised (Passports, Driving Licences, Certificates et al) whilst others are things that it’s unlikely they ever will (food, clothes, etc.).   Almost every frequent online shopper has experienced goods not being as described, or even fraud from untraceable sellers.  Trust in the physical world it seems still outshines that of the online environment.  Whilst many things are now shipped, often in incredibly quick timescales – with the promise of drones cutting it even more dramatically - we still have the need for a physical location for many of the things that make our life easier.  If you’re in the middle of doing something, the immediacy of the local shop is still hard to replicate for convenience.

Whether the exchange of a physical item is through shipping, self-service, or click and collect, we still need a physical experience for our online journey.

Personalisation
When you go to the supermarket for your groceries how often do you pick from the front of the shelf, or randomly dip into the apples?  The buying decision has so many dimensions, what the expiry date is, how shiny the apple is, whether the tin is slightly dented, how much fat is on the steak.  These considerations extend to a greater or lesser extent into other domains too.  Replicating personalisation online is hugely tricky without compromising on the reality of the customer experience.  It may be my vanity in believing that I look just like the model photographed wearing the clothes on the website.   When I buy clothes online it often results in incredible disappointment when the item finally arrives and I try it on at home. 

Whilst many online interactions don't have a physical element, for those that do this still needs to occur somewhere in the customer journey.  Where personalisation is low, the physical interaction can happen successfully at the end.  Where personalisation is increased, the physical interaction needs to move further forward in the overall experience.

Technology lag
The term smartphone is probably an outdated one.  Of all the things we do with these devices, using it as a phone is probably low down (and decreasing) as a percentage of time spent interacting with it.  Things that we may have done previously, such as getting a passport quality photo, the little device in our pocket can now do entirely online.  No longer do we need to go to a physical location.  The issue is that technology often follows a well-trodden path.  The camera in a mid-priced smart device delivers the same quality photos as an expensive, bulky camera would have 5-10 years ago.  Yet there is still a market for expensive, bulky cameras because they’re now as good as the cameras in smart devices will be in another 5-10 years’ time. 

Why we should care about physical from a technology perspective is similar to why we should care about Formula One.  The innovation in the car industry starts off as expensive, vanity, over-engineered non-sense to make the F1 car a 100th of a second faster.  It then gets productionised into top end vehicles before becoming a commodity item on every car. 

We should remember that technology doesn’t stop.  The generation who laughed at their elders trying to use the gramophone, will have been laughed at themselves as they tried to use the Betamax.  And they will have been laughed at trying to use the iPod.  And they will have been laughed at trying to stream a movie.  Technology will always be confusing at some point in our lives.  When it reaches that stage it's less likely that we'll be interested in owning it ourselves.

Accessibility
The knock-on impact of technology lag is accessibility.  When you need to be able to take a 3D photo to get a passport, this may have only made its way into the latest high end smart device.   Ubiquity needs to be delivered elsewhere. 

The availability of technology is only one part of the accessibility issue.  Competence is a major issue too.  Being able to use the internet is one thing.  Being able to complete a complex application form is another. 

Accessibility covers broad demographic and use cases, depending on what the need is.  When making a recent application myself, the requirement to “get someone to witness your signature who has known you for at least 5 years and isn’t a family member” caused me a considerable inconvenience.  In the digitally connected world many of my closest friends live the furthest from me.

Security
We’ve all seen the keyboard warrior.  The person who has a strong opinion and isn’t afraid to use the caps lock to GET THEIR POINT ACROSS.  Or the troll who sends offensive, abusive, threatening or persistent messages to one or many people.  There are two things that you can do (fairly easily) online that you can’t do (easily) in person.  One is that you can walk away unbruised.  The second is the volume in respect of effort.  If I wanted to shoplift a £1 item to make £1,000, doing that in person means I’ve got to go around a lot of shops and I my risk of getting caught is huge. 

I can spam several thousand people online in minutes, to get them to put money into an anonymous account in return for something that I don’t deliver on.  

We see the impact of this today with people “washing” fake documents through online document checkers in order to prioritise where to use them.  Walking into a physical location where the risk of apprehension of both the document and the individual is far riskier.

Doing things offline doesn't necessarily mean they're more secure - often its the opposite.  However they are different.  The risks change.  The controls change.  The mitigations change.  Using the right channel to get the right experience with the right security is how we get the right result.

Trust
When things do go wrong online, having a physical location to go to is often the only way of unpicking the situation and restoring the balance in the force.  This brings together many of the points raised so far.  It may be simply returning an item ordered online where I need to prove that the item was faulty.  Or it may be having to demonstrate a high level of security that simply cannot be achieved online.  Trust in the digital era is about having great experiences in both the online and offline worlds.

Getting in physical shape
In the financial sector, the advent of open banking will see the market opened up to more tech and online focussed services that those with an estate of retail outlets will have to compete against.  In order to do so, there is a need to focus on the services that customers value online and in store.  Ensuring that the online offer is as good as or better than the competition becomes the baseline.  The advantage comes from bringing the benefits of the retail network to complement this.

Thinking about the physical world isn’t about reverting to legacy ways of doing things.  The sepia tinted glasses of how great things were back in the day isn’t the way to view how to operate.  We should be making the right use of the offline and online channels to create a joined-up customer experience.  This will deliver a sustainable, relevant and valued bricks and clicks offering.  So, let’s get physically fit for the digital era.

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