John Lewis has decided to charge £2 for Click & Collect orders under £30. Andy Street, CEO of John Lewis, said that business sustainability was the main reason for it.
It’s fair enough. As a business they need to secure a healthy level of profits. However, from the consumers’ point of view it is not fair.
It’s basically giving and taking away tactic. Parents know what happens when you take away the favourite toy from a baby. This is exactly how consumers’ minds will feel right now.
So what could have been a better solution?
Maximimising purchase opportunities is the answer. Majority of the Click & Collect points are rather uninspiring in design and experience. They also don’t have the usual merchandising which subconsciously influences consumers to buy more.
IKEA with their new concept of smaller Click & Collect stores with inspirational displays and smaller decorative products on display has used exactly that principle to ensure that a customer collecting their previously ordered table will additionally purchase a set of napkins and a candle holders for romantic dinners.
The turnover from Click & Collect points could be further maximised by introducing special offers and product bundles just for Click & Collect customers. It will not only result in clear commercial benefits but most importantly make the Click & Collect customers feel special and rewarded for shopping in this way.
Psychologists not economists should inform business decisions
This is just one of the great examples that economics doesn’t have all the answers regarding running successful customer-centred business. There are many ‘soft’ indicators of successful retail business like customer loyalty and advocacy which can be easily destroyed by making purely commercial decisions.
As an expert educated in psychology and economics I understand how important both of them are for creating financially healthy and desirable by the customers business. However, you need to ensure that you know which approach can produce better solutions at any given moment and how to blend them well.
Image Source: John Lewis.
