Amazon recently started offering deliveries direct to car boots for members of its Prime subscription service. The service is an extension of Amazon’s Key program, which also enables drivers to deliver directly to your home even when you are away, and is also why Amazon acquired Ring for a billion dollars. The company has also tried other innovative means of delivering their packages, such as the delivery drones and delivery to secure lockers where you can pick up your package.
But Amazon’s efforts are not limited to the online shopping world. They have also launched the Amazon Go stores which allow customers to basically pick a product a walk away without the hassle of queuing. Amazon subsequently decided to expand the Go program to six new locations. Fair to say that with the acquisition of Whole Foods last year, Amazon can grow much beyond the six. Simultaneously, Amazon is linking Alexa to Wholefood’s two-hour delivery, so you can order your groceries directly from Alexa and have them delivered to your home the same day!
So why is it that while Banks are closing as many branches as possible, Amazon is moving in the opposite direction? The answer is straightforward – Amazon is focusing on most important problems for its customers – and then doing whatever it takes to solve those. Banks, in contrast, are still grappling to define which problems to solve. Let me elaborate.
Last week, I went to a bank branch in the UK because I accidentally blocked my credit card (long story – have two cards that almost look alike and I input the wrong pin too many times). Now, this bank is considered the gold standard for branch experience – so a problem that this bank has will almost certainly apply to most other banks out there. While I was waiting for my turn, I could see that the person sitting next to me was getting quite agitated. As I soon found out, this individual, who had come to the bank with his two young daughters, had been waiting for his turn for about 40 minutes by then. When a branch employee approached us, he asked her how much longer would it take for someone to see him. The iPad toting employee told him that it would take anywhere from 25-40 minutes more since all advisors were busy, this being a weekend. This customer exploded at that point – When he had come in, he was told that it would take about 30 minutes. Had he been told it would take over an hour, he could have come at another time. But now he was in a catch 22 and so angry was he at the bank that he decided to close his account then and there (of course they still made him wait another 25 minutes to do that)
This is an extreme example – most people in a similar situation would not close their account. However, this doesn’t take away from the underlying problem – the branch experience sucks and the banks are not doing anything to make it better! That’s the irony – people both loathe and love the bank branch in equal measure. There is a good reason for that – the branch experience, when it works, is fantastic. You speak to a real human who can understand your needs, empathise with you and in most cases solves your problem. However, this lovely gooey experience is surrounded by layers of thorny bushes that you must manoeuvre around, from waiting in the queue for ages to being told to come back again because you don’t have the right documents and sometimes being put on the phone because your query is not important enough. Basically, the branch experience of today is no better than 30-40 years ago – maybe even worse as you can do less in branches now. Yet, the branches are having a mini-resurgence as they enable banks to sell more i.e. they solve a problem for the bank.
Coming back to Amazon, the fundamental reason why they have been so successful is that they have a laser focus on one principle question – How to give customers the best shopping experience possible and two sub-questions – How can I make ordering as simple as possible and how can I make getting hold of your order as convenient as possible?
In the context of these questions, it all starts to come together – Amazon Go for instant gratification minus the hassle of standing in checkout queues. Alexa, Amazon Tab and One-click ordering for making shopping simpler and more integrated into the customer’s daily life. Having the item delivered to your home, your car boot or in an Amazon locker to eliminate the need of being there to receive your order. When you ask the right questions, all these steps seem almost obvious! It is due to this focus on asking the right questions and then going all out to find the best possible solutions to those questions that Amazon has been compared to Death Star for all its competitors. So much so that someone has even started a death-by-Amazon index.
Contrast this with banking. While a lot of banks talk about BHAGs (Big Hairy Audacious Goals), almost no one mentions BHAQs (Big Hairy Audacious Questions). We have a lot of solutions, but we have never been that great at articulating the problem that we are trying to solve. Our questions are usually articulated from the perspective of the bank – how can banks stay relevant in light of PSD2 and Fintechs, how can we digitalise more customers, how can we increase cross-sales, how can we increase the number of primary customers…..and the list goes on. Do these sound familiar? Do you see a trend here? Does the customer care about any of those?
If we learn to ask the right questions, maybe then the branch won’t be looked as a cost centre to cut back on, but instead, we would objectively look at its role in solving the customer’s problems. Maybe then instead of expecting our customers to queue in a branch for over an hour, we will send them a push notification on their mobile app 5 minutes before their turn. You won’t be told to come back with your passport because your mobile app will be enough to identify you. And maybe, just maybe, even the non-digital customers will finally see the point in using our apps – because they solve their problems rather than the banks’.