Why NTUC FairPrice should not be an Amazon or Alibaba copycat

While hi-tech adoption and digital transformation across industries are lauded and encouraged by governments, sometimes businesses fail to think through their efforts enough. Recently, our family visited the NTUC FairPrice, Singapore’s national supermarket chain, at SingPost Centre. We like this particular outlet because of its proximity to home and the range of F&B choices in the same building. Plus this FairPrice has a cool factor and aesthetics. It has a “Scan2Go” handset shopping system that’s theoretically supposed to help with ease of checkout although evidence suggests it is less than satisfactory experience.

It does feel like supermarkets everywhere are improving their retailing experience to meet the demands of savvy modern consumer. Amazon captured our imaginations with Amazon Go: “No lines, no checkout – just grab and go”. Definitely a game changer. In busy locales or for time-strapped customers, the time and effort saved can be a significant advantage to business operations or the customers’ lifestyle. See if for yourself below.

Alibaba’s fast-growing Hema grocery stores are also making the news. It’s an app-driven experience and you can even fill your tummy at a robot restaurant, where your food gets delivered by automated mini-carts. You can even pay with your face using the latest in facial recognition technology.

Customer Experience Failure

I’ve always loved self-service checkout for small amount of purchases. Fast, convenient and cashless. On this NTUC FairPrice trip, however, we had to use one of their new self-service checkout counters for shopping carts because of the volume of our purchases. For these lanes, NTUC FairPrice has decided that cashiers are a thing of the past so there is no one to assist with scanning or payment. You’re on your own. Again, top marks for theory: a cashier-less, frictionless experience to get customers away to their next destination or activity in a jiffy.

Well, not quite our experience. Customers were stuck behind slow moving queues. The family in front of us had to extend a helping hand to a senior old man who had trouble making a payment. In the meantime, the queues continued to grow.

Imagine this for a customer shopping alone: you load up your items onto the pre-scan shopping belt, self-scan the items, place each items into bags, repeat till done. Once completed, you can now proceed to payment and pray hard that the terminals are working because you don’t see any staff nearby in case of emergency. Excellent operational efficiency although it certainly looks like NTUC FairPrice has literally outsourced its frontline retail operations to you, dear customer.

When it came to our turn, my wife and I got into a little trouble. Being the helpful husband that I am, while she scanned barcodes, I was helping to load up bagged scanned items onto our shopping cart. Presto. I ruined the “self-service” magic because every time I did so, she can’t continue scanning. It turns out that, the way the system works, we have to leave the scanned items on the weight-sensitive conveyor belt until payment is completed. Time-wasting is one but, of course, “please self-service, but we don’t trust you enough because you might run away with our unpaid precious goods.”

I’m really sorry for you if you so happen to need bulky or heavy items on a supermarket run. You have to haul each and everyone of them onto the conveyor belt for scanning, make payment and bust your back to put them into the shopping cart again. Then again, exercising while shopping could be a developing trend.

Misguided Transformation

When mature business organisations are faced with slowing growth, technological disruptions (ecommerce, mobile apps, etc) or consumer’s changing lifestyle, for some inexplicable reason (or is it government’s media machine?), a decision is always made to have a go at “hi-tech or digital transformation”. In many cases, unfortunately, these transformations are geared towards business outcomes (profitability, operational efficiencies, media coverage, etc.). Sadly, often outcomes beneficial to the Customer are secondary considerations (our unpleasant experience at NTUC FairPrice SingPost Centre above proves this.)

These “transformations” often fail to address value creation for the Customer. “Outsourcing work to customers” is not Customer Value creation. In fact, it is a step backward in the relationship and only the business is seen as winning. Worse, after this experience, I don’t feel like I will head back to NTUC FairPrice any time soon. That’s a real loss in hard cash revenue, if that isn’t obvious enough.

Therefore, despite all the hard work and effort the organisation has put into “transformation projects”, very little has actually changed. On the other hand, a successful transformation can be easily measured by the continuous and incremental value creation for the Customer that naturally results in greater customer satisfaction and, in turn, higher revenue and profits.

Case in point: The Singapore brand, TWG Tea, (despite its “dubious” heritage) transforms the millenia-old, almost-mundane tea drinking activity into a luxurious experience appreciated and enjoyed by customers willing to pay top dollar for it. Today, this 10-year old company is a S$90m retail brand that thrives on creating Customer Value without having a need to resort to being “tech savvy” or “digitally present”. Just good ol’ customer satisfaction.

People Transformation, not Technology Transformation

Many transformation projects fail because of the lack of care for the human factor, both internal and external. I can’t speculate on internal too much although I would assume displaced NTUC FairPrice cashier employees (whose jobs are replaced by the very customers they were serving!) aren’t likely to be thrilled with this “transformational phase” of the company.

Growing up, and for so long, the NTUC FairPrice brand has always been about a friendly face, caring and concern. Its customers’ perception of the NTUC FairPrice brand is one of a trusted neighbourhood institution. Going cashierless, in my opinion, is simply throwing away all the goodwill and brand trust built over the years.

Both Amazon and Alibaba are native digital ecommerce companies. About the only employees most of us know from these companies are Jeff Bezos and Jack Ma, CEOs of Amazon and Alibaba, respectively (and perhaps the regular delivery guy. Probably outsourced.) Both companies’ competencies are based on online buying experience, efficiencies of warehouse operations and reach of logistics network, not human-to-human experience. Whereas, customers’ relationship with NTUC FairPrice has always been the friendly faces they’ve been so accustomed to over the years.

So why is NTUC FairPrice blatantly playing copycat and ignoring its strengths and competitive edge?

Customer-centricity through Business Agility

Back to our NTUC FairPrice experience. Out of nowhere, a staff appeared and decided to help us bag the items. I spoke out my frustration a little although, to my surprise, she was visibly happy and, with a smile, directed me to provide feedback to the managers. Perhaps I wasn’t the first, and I truly hope I wasn’t the last, because this silliness has to go away. I certainly hope the NTUC FairPrice business is agile enough to learn from feedback, re-evaluate and re-strategise its frontline retail approach.

Bring back Customer-centricity, for goodness’ sake. Remember, in today’s world, the human-centric approach is the only competitive advantage any organisation can have. Why? Because technology and digital are fast becoming an easily attainable commodity by everyone. Where’s the magic in that?