Not that long ago, businesses were clamouring to get online. Physical stores were being replaced with digital marketplaces, and human interaction replaced with interactive interfaces. Now, though, after years of high tech, high touch is staging a comeback.
In late 2015, Amazon opened its first physical bookstore in Seattle. As many noted at the time, this felt rather ironic as the web giant has done more than another entity on earth to close physical bookstores. However, it should not have come as an enormous surprise. In 2012, Jeff Bezos said, “We want to do something that is uniquely Amazon. If we can find that idea – and we haven’t found it yet – but if we can find that idea, we would love to open physical stores.”
Now, of course, Amazon has gone beyond bookstores and it looks like its range of Amazon Go grocery stores (which build on the Whole Foods acquisition) is set to roll out worldwide. Amazon is not the only web giant dipping its foot into physical waters, though. In 2015, Google opened a store in the Currys PC World store on London’s Tottenham Court Road. The search giant had long held small concession stands in the chain, but this was a real store within a store. A Google spokesman said, “We think it’s a genuinely unique try-before-you-buy experience.”
Other online-only businesses such as Etsy and eBay have also been experimenting with, if not full stores, then at least pop-ups. Even those selling online services in functional areas such as finance and insurance seem to be interested in a more human, physical approach. So, what is happening?
Bricks and clicks
There’s nothing new about combining online and physical stores. The phrase ‘bricks and clicks’ was already in widespread use during the dotcom boom, nearly 20 years ago. Moreover, many physical businesses (notably large grocery chains and Walmart) have become very successful online retailers in their own right. What is different, however, is that, until now, the journey from offline to online was a one-way street. There has long been an underlying assumption that virtual is the future and physical stores are the past. We have become used to hand-wringing articles about the death of the high street and arty pictures of ‘dead malls’ online. But now the companies of the future seem interested in the past – and perhaps offline is the new online. Certainly there are some good reasons for the big e-tailers to do this. Part of it is that a screen or a phone cannot offer a fully human experience.
Retailers need to differentiate themselves and it’s easier to demonstrate real differences with a physical store.
“As consumers we’re used to life where everything is 100 per cent personalised,” says branding consultant Robert Bean. “But then you try contacting one of these companies and you have a deeply impersonal experience.” Being able to see and touch things and deal with staff in real life, he says, makes for a much more real, tangible relationship with the business. “There’s an argument that these businesses are trying to become more personal and give themselves a human face.”
Indeed, people may scoff at the perceived pretentiousness of Apple stores with their genius bars. But there is no doubt that these stores form an important facet of the Apple brand and are part of what makes Apple stand apart from, say, Dell or HP. “Retailers need to differentiate themselves and it’s easier to demonstrate real differences with a physical store,” says Bean.
There is also the issue of tangibility. Many of these companies have moved far beyond their original remits and this has forced them to reconsider their approach. Books and CDs were Amazon’s earliest offerings and these are not products that you need to see and touch before you buy. But the fresh food market is one where the tactile store experience is very important to many people. Similarly, Google started by offering a “free” service that you could not touch. But it now makes phones, tablets, and laptops – and people like to pick these up and ask questions of assistants before they buy.
High touch - a growing trend
These companies moving offline is also indicative of a larger trend affecting businesses worldwide: the demand for higher-touch options. Indeed, many have suggested that this could even mean that some jobs are not as threatened by automation as had previously been assumed. A recent survey by the Pew Research Center identified a number of jobs that were unlikely to be lost to robots.
In an interview with CNBC, Lee Rainie, Pew’s Director of Internet and Technology Research, said that anything “that involves dealing directly with the public and taking care of them, either their needs in health or other places” is likely to survive the rise of the robots. In fact, he suggested that some of these areas may even add jobs. It’s not just the obvious places, either – investment service Nutmeg has long been known for its robo-advisors, but it has recently started using human advisors. This move is supported by a recent survey by the investment firm Minerva which showed that almost three quarters of investors would trust a human independent financial advisor to make a decision on their behalf. By contrast, only 12 per cent would trust a “robo-advisor”.
People like people
Although high touch is most visible at the customer-business interface, the very simple idea it embodies – that people like human contact and relationships – is one that has applicability far beyond customer-facing retail. The content management company eZ Systems recently tried a high-touch marketing campaign that was a great success. The reason – B2B sales are ultimately about humans and an ounce of high touch is worth a pound of automated marketing.
Taking the time to build relationships that eventually lead to trust is critical – as well as fostering these relationships as they grow.
High touch also has a place in management. It is one of the reasons people often love working for SMEs. Small businesses often have high-touch cultures by default. You have a problem, you go to your manager. Perhaps you even go to the CEO, who sits only a few feet away from you. As a result the top bosses have a real feel for what is happening on the shop floor and the concerns of their staff. Once companies become larger, this natural high-touch environment often disappears (and is replaced by high-tech systems) and millions of dollars are spent trying to recapture its value.
Numerous studies bear this out. One such study was undertaken by the very high-tech company Cisco in 2013. It noted that various hightech forms of communication had radically altered the workplace in the preceding decade. However, the findings showed that all collab- oration was based on human interaction and relationships. The report said, “Taking the time to build relationships that eventually lead to trust is critical – as well as fostering these relationships as they grow. As one of our participants stated: ‘We need to get back to the intimacy.’”
Of course, none of this is to say that high tech does not have a role. The vast amount of data that companies now collect allows them to know their customers as never before and to tailor their offerings accordingly. It also lets them know their employees. The point is simply that, valuable though all these insights are, they need to be combined with the human touch to really have an impact. Whether on the shop floor or office floor, data and technology should be used to augment and improve people, not to replace them entirely.
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The Human Touch
This article is a part of the 'Human Touch' series in which we portray smart organisations, businesses, startups, or initiatives, which systematically prepare themselves for the AI age by investing in the only thing that will never be replaceable – the human touch.