Digital Retail has the potential to damage Swiss communities by isolating people, reducing jobs and increasing debt.

The Swiss government should work with COOP and Migros to build a Digital Retail Benefits Scorecard to measure the impact on Swiss communitie

 

I live in a village of about 5,000 people in the French-speaking part of Switzerland. It’s the kind of place where everyone says hello as they walk past one another in the morning, most of the faces look familiar, a small number of family names account for almost half the population and many of the people who live here went to school with one another here. It’s a community.

Shopping is at the heart of that community: the patisserie, the laiterie, the pharmacy and the small supermarkets from COOP and MIGROS. Shopping is done daily, often on foot. The people working in the shops live locally and know their customers.

The “retail experience” has historically been friendly, relaxed, cash-based and has generated local jobs.

All of this is under attack by Digital Retail.

The photograph above is of my local COOP which has just replaced one of the three check-outs (the third was only used at peak times) with three self-service tills. Now only one manual till seems to be staffed. All the tills are equipped to take credit cards and the TWINT the Swiss smartphone digital wallet app.

Most of the (largely non-Swiss) people I work with would sincerely see this as progress. They spend their professional lives enabling digital transformation to give a better customer experience.

What excites them, and what they believe should excite us, is a world where finding what you want and paying for it effortlessly as part of your personalised customer journey. The magic wand at the heart of this journey is the Smartphone which makes the magic happen: allowing you to find and pay for things without talking to anyone or using cash.

This Smartphone-centric view of the world is based on the belief that “Ideally, all shopping should be online, but if you HAVE to go into a bricks and mortar store, it should take as little time and be as much LIKE being online as possible.

This may be what they’re dreaming in California but Switzerland is still a face to face, pay with cash kind of place where shopping is a social activity, not a video game for loners.

In Switzerland, I see Digital Retail as something that can do a lot of damage to the culture.

• Self-service tills can cause damage by:
  • Isolating people. The old folks don’t get to chat with other people in the queue or get a smile from the person in the register. They just get new technology to master, more work to do and a “dialogue” with a digital voice that treats them as a potentially faulty component of the retail process.
  • Reducing jobs for local people (mainly women): I’ve worked on checkouts. It’s not something that helps anyone maximise their human potential but it’s work that anyone can be trained to do and that pays the bills. It’s a job mainly done by women, many of whom value a job that lets them work locally, gives them flexibility on hours, allows them to shop for the family and includes them in a team of people, most of whom they already know. Every digital till put in place reduces the chances of a local woman finding a job like that.
• Digital Wallets, Wave and Pay and card-only self-service tills cause damage by:
  • Encouraging people to replace cash with credit. This makes it easier to spend money you don’t have and harder to keep track of how much money you’ve used.  A 2017 survey showed Switzerland is a still a cash-based economy. 50% of people have only one credit card and use it mostly for online purchases. Digital wallet has almost no presence. Credit card debt is very low.

So, given that digital retail has the potential to isolate people, reduce jobs and increase debt, why is it being promoted in Switzerland?

I think a small part of it is a simple “Me To” or “Follow The Foreigner” response – if the Americans want that kind of retail journey then maybe the Swiss should try it – like eating at McDonalds, not because it’s good or cheap but because it’s different.

I think some of it is that retailers are being pushed towards digital technology on a FOMO (Fear Of Missing Out) basis: if COOP and Migros don’t do it and Aldi and Lidl do, will the local Swiss guys fall behind?

I think most of it is about trying to make more profit. Digital Retail is designed to make people buy more and buy more often (even if that means spending money they don’t have) and reduces the unit cost of the sales by taking out jobs and turnover per square metre.

I think the push on credit cards and digital wallet is about the fact that it’s now very hard to make money on retail banking. TWINT was set up by the Swiss banks to counter Apple Pay. Apple can afford to play the long game. TWINT have to make money now. By getting MIGROS and COOP onboard, they own most of Swiss retail.

I think NONE of it is really about improving the retail experience for the customer.

I’m hoping that the Swiss will carry on being themselves and let the push for digital retail pass them by.

I think it would be smart for the Swiss government to work with COOP and Migros to build a Benefits Scorecard that demonstrates whether Digital Retail is a net benefit to the community.

 

 

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