Abercrombie & Fitch (A&F) is an American retailer that focuses on stylish and highly sought after casual wear. It has over 325 stores locations and operates internationally. In 2010 A&F had a turnover of 3.47 billion dollars. They’ve achieved great success using a business model that flies in the face of many well-accepted retail business practices.
If you’ve visited an A&F store, it’s more than likely that a buff bouncer will prevent you from going inside! In this video customers are forced to wait in the rain even though the store is not full to capacity with customers inside:
Once inside customers have to contend with lights so dim you can’t even see the merchandise being sold! There is also music playing so loudly that you can’t hear what the shop assistant is saying. And to top it all you choke on an overbearing smell of perfume being sprayed out through the ventilation. What’s pleasant about this experience? In fact there are aspects of this customer service model that are a real inconvenience for the customer and yet this is a model that has made A&F very successful.
Of course this experience is designed and appeals more to a younger generation but A&F is also a sought after brand by adults thin enough to fit their apparel. The business model works well because A&F understand the moment of truth is in the exclusive atmosphere and experience on offer.
When it comes to great customer experiences IKEA is unlikely to be a company that heads the list in anyone’s mind. And yet today IKEA is the largest furniture retailer in the world. Let’s take a look at some impressive numbers:
- IKEA has 316 stores in 36 countries,
- Sells approximately 12,000 products to over 626 million visitors annually
- Has 197 million catalogues are printed every year in 29 languages
- The IKEA website has 712 million visits annually
Consider the average IKEA shopping experience: Typically you have to drive out of your way to a semi-industrialised business park to go shopping. You enter an enormous, dusty warehouse and get corralled like sheep around a labyrinth of furniture. You have to contend with screaming kids and tired mothers. Importantly there is the quintessential stop for Swedish meatballs or fish and chips in a hostel styled canteen. You finally make your way out of the maze and have to go and find your flat packs, heavy boxes using a confusing codified system that tells you where your items can be located. Many a time you are frustrated to discover that at least one or two of the items you hunted down in the labyrinth have already been sold out. Too tired to head back into the maze to find a replacement item, you collect what boxes of furniture you can find and, horror of horrors, you have to queue up for a minimum of 45 minutes to pay. You then have to squeeze the boxes into your car, which seems to have shrunk or the van you specifically hired, at great expense, for this shopping spree, so that you can take the boxes home and build the furniture yourself!
What is satisfying about that experience? Very little, and yet IKEA is now the world’s largest furniture retailer.
And it’s not because of price either, because there are cheaper ready-made alternatives. IKEA understands intimately the emotional connection they have with their customers and have ingeniously recognized that one crucial moment of truth – the one moment that matters more than all the other moments of truth put together – This moment is when the customer steps back aftre building their unit of furniture and calls in the family and go “See, I am the MAN or WOMAN who built this”.
IKEA furniture represents the pinnacle of engineering. Once you get the logic of the build, every piece fits together perfectly, easily and it looks great. IKEA is brilliant. Time and time again, they deliver consistently when it matters most and recognize that at almost every other interaction with customers they have leeway to build cost saving “inconveniences” into the customer experience because the product delivers at the most critical moment of truth.
IKEA has identified a business model that goes against most conventional customer experience wisdom and yet still delivers happy customers because they deliver where and when it matters most.
Do you and your staff know what the critical moments of truth are for your business and are they empowered to make the difference at that moment?
Like IKEA, Abercrombie & Fitch has identified a business model that does not always delight the customer. They have created a successful business around building distinct differences (even inconveniences) into the customer experience. Pure genius. You don’t always have to delight your customers, sometimes well thought out “inconveniences” can have them wanting more.
This has important implications because it means that customers have certain thresholds where they will accept a degree of inconvenience as long as they get the moment of truth they are looking for. And this means that you can identify significant cost savings in your customer experience journey. It also has huge implications for training of staff and identifying where they should be provided with complete levels of empowerment.