Nov 17, 2005

A preferred checkout experience

Most discount retailers face the same fundamental challenge that is inherent to their way of doing business: “How can I continue giving increasingly greater value and service than my competitors, for the same items and for the same low discount price?” Customers expect low prices and excellent service. Discount retailers are constantly looking for innovative ways to offer customers a superior shopping experience that does not impact margins. Banks that can tap into this need can develop a much stronger relationship with retailers.

Carrefour in France has several preferred checkout lanes, which you can see in this picture. They of course have lanes for 10 items or less, but they also have lanes which allow handicapped customers and pregnant women to cut in front of other customers, and lanes for customers that pay with the Carrefour PASS co-branded credit card. Yellow banners hanging from the ceiling show which lanes are reserved for PASS cardholders.

“That could never work here!” I wish I get a dollar every time I hear this. After twenty years, the money would add up. When I hear this I automatically become instantly convinced that that is precisely why the idea would work. “People in my country would never respect the queue and would complain loudly.” This was said to me recently concerning the UK, of all places, the country with perhaps the strongest respect for queues anywhere on earth. The French are not naturally inclined to respect queues, on the contrary. They are among the least inclined. Yet, Carrefour in France is able to adapt their checkout experience to different customer categories. If it can be done in France, it can surely be done in many other countries. In any case, whether it’s a preferred checkout experience or some other service, I can guarantee that retailers everywhere would love to be able to target special services to their most profitable customers, if only they could identify those customers while they are in the store. Banks have an important role to play here. They can facilitate this in ways that retailers cannot.

PASS cardholders are not automatically the best customers. Many people that prefer to pay with a bankcard spend more each month than the average PASS cardholder. I may be one of them. But Carrefour cannot recognize customers that don’t use a Carrefour credit card. Why not create a preferred checkout experience for these customers as well? The payment terminal can print a VIP Services Voucher as a credit or debit card receipt offer when the customer’s monthly spending has exceeded a certain amount. The voucher gives access to PASS lanes during the next month. Carrefour already has the lanes in place, and the service would be built into the bank’s payment processing fees, so the service would not cost more to Carrefour. But it would bring real value to the bank’s customers, and would make the bank’s merchant acquiring services stickier at Carrefour.

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