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By Dan Currell, CEO

Digital Commerce Alliance

January 6th, 2023

Consumers Do What’s Easy

Happy New Year!

DCA members are talking about lots of things as 2023 dawns – big plans, exciting innovations, the next big DCA meeting (April, in San Francisco – more to come on that).  But we had an important conversation this week about a perennial issue: friction.

Physical friction slows things down.  That’s why skiing is more fun when there’s snow, and considerably less fun when you hit a patch of grass.  (Good news: after the last two weeks, there’s no grass to be seen on most ski hills.)

Friction in digital commerce is more of a metaphor, but just as unpleasant.  The dream is frictionless digital loyalty and rewards programming – merchant systems know who the customer is, the customer’s status and preferences, and those factors are taken into account automatically in every transaction.

I had an example of a low-friction transaction today: I am writing this from the Turkish Airlines lounge at Washington-Dulles.  Getting in involved two things, both on my phone: Priority Pass from my digital wallet and my Delta boarding pass.  The machine beeped, I got in.

At least in theory, it could have been one step easier if the system “knew” me better – one beep of Priority Pass or my boarding pass, and I’d be in.

Friction losses are real.  Car engines have a lot of friction and are about 50% efficient – i.e., about half the energy a car consumes is converted into forward motion.  Bicycles are around 98% efficient, because their “engines” (pedals, chain, cogs, bearings) have so little friction.

So too, when a digital commerce system is complicated, that requires extra effort and further steps – and it also means we simply lose transactions.  I was informed by a member this week that a card I have in my wallet right now was offering 10% off gas in December.  I spent a lot of money on fuel last month (we drove to grandma’s house for Christmas, as one does), but had no idea about the offer, so I didn’t use it.  That’s a complexity problem, which is – strictly speaking – a sibling of friction, not quite exactly the same thing.

But it’s hard to reduce friction without reducing complexity.  And both of those things involve using better-quality data to tailor experiences to consumers in a way that fits them best.


The Conversation

  1. The “Norm Standard” is true frictionless commerce: Norm walks into Cheers, everyone yells “Norm!” – and a beer shows up at his seat.  Thinking radically, what could you do to achieve “The Norm Standard” for your consumers?
  2. In the real world of today, what are the most steps a consumer may have to take in order for your systems to recognize them?
  3. What are the least number of steps?
  4. By the end of 2023, how will you know if you have closed the gap – i.e. reduced the number of consumers who take a larger number of steps to claim a benefit or participate in a program?


Related DCA Resource:

Commerce Code Episode 93: Simplifying Payments by Embedding Transactions Into Retail Software

Commerce Code Episode 101: New Solutions for Loyalty Programs and Consumers

Commerce Code Episode 103: Fin-Tech Innovation and Open Banking

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