Reported by: banking|Updated: October 15, 2018
The growth of e-commerce has provided a clear perspective on what the customer wants – quick and hassle-free shopping. So we see e-commerce giants like Flipkart, Amazon, Snapdeal, etc, offer increasingly refined websites and mobile apps. Customers can find the desired products quickly, research the products easily, compare products, look at special deals, etc, update their carts and make payments with minimal data entry. Following the e-commerce model, banks too have significantly enhanced their digital interfaces for their customers. The fundamental premise in all these strategies is that customers do not enjoy the task, but since the task has to be done, the company facilitates it with technology to make it as quick and simple as possible.
Well, some companies have taken the opposite approach, and the prominent one among them is IKEA, the Swedish retailer. The winning strategy for retailers has been to make the customer experience so delightful that they spend more and more time browsing which can lead to increased sales. Thus, we have seen the mushrooming of malls. IKEA was expecting customers to spend 2-3 hours in its newly opened store in Hyderabad. It was pleasantly surprised, when many customers spent as much as 7-8 hours. Customers clearly like to hang around and explore. Clearly, the opposite of the typical digital strategy is also a worthwhile strategy.
Can the financial services industry adopt an IKEA-like strategy, viz move away from being transaction centric to relationship centric? Perhaps some of the financial service providers will explore that option. The push for this will come if companies like Amazon get into banking. A study conducted by Bain among 6000 adults in the US showed that 65% of Amazon Prime subscribers would be prepared to open a bank account with the etailer. If that was not scary enough, Amazon had a NPS score of 47, way ahead of the national bank average of 18. Huge gap…isn’t it?
Manoj Agrawal, Group Editor, Banking Frontiers