Removing the Seams from Retail

Posted on Posted in retail strategy

“Great technology…allows the mechanical parts of what we do everyday to disappear.” So said Jack Dorsey, Chairman of Twitter and CEO of Square at the National Retail Federation annual conference in New York last week. What they call the “NRF Big Show” really is big – 30,000 delegates, and a multitude of speakers including a past President of the United States. But out of all the presentations it was Jack Dorsey’s address that really caught my imagination.

Dorsey is a serial overachiever. After co-founding the micro-blogging service Twitter (he introduced himself on stage as “a man of very few words, and even fewer characters”), Dorsey set about re-shaping retail transactions with a new venture called Square. The idea behind Square was to turn the most unsatisfying part of shopping (lining up and handing over your cash or card) into a “fast, effortless” and even pleasurable process. In doing so, Dorsey wanted to “remove all the seams from these interactions”.

The basic building block of Square is a small, square-shaped thingamajig that plugs into a merchant’s smartphone to turn it into a credit card reader. When it was released in 2010, it democratized retail – everyone from a babysitter to a big box store could suddenly accept payments and “sell anywhere with Square” for a flat rate of 2.75% “per swipe”. That has now been supplemented with a sub-US$100 iPad-powered “Square Stand” register that is sleek and a long way from the clunky cash machines of old.


The complementary part of the ecosystem to be introduced was “Square Wallet”, a smartphone app that allows customers to interact with a store and pay easily using their phone, or by simply showing their face and stating their name at the register. Square Wallet also makes the seller aware of the buyer’s past purchases and preferences – when a customer walks into a café for example, the barista is automatically alerted that Sam’s brew of choice is a double-shot latte.

Image source: Silicon Angle

An important part of the concept was that this was all about “building the entire thing; connecting the dots.” Dorsey is critical that many technology solutions “think of tiny little parts rather than a cohesive whole.”

Starbucks thought it was a big enough deal to invest US$25 million in the company and adopt Square as a preferred method of payment. Outside of Starbucks, Square is being used in one billion visits to retailers per year (mostly in the US – Square is coming to Australia in 2014).

Dorsey’s presentation title at the NRF Big Show was “The Receipt: a Communication Channel”. With that in mind, he asked the rhetorical questions: “what if we see the receipt more as a publishing medium…what if we see the receipt as a communications channel…what if the receipt becomes an application?” In challenging the functional norm, Dorsey’s Square helped turn the mundane into the marvelous, a source of delight rather than irritation.

The near future of retail is all about taking friction out of the shopping and purchase process. It’s interesting that in this same past week, Amazon filed a patent for “anticipatory shipping”, which uses data analysis to predict buying patterns and ship products before customers have even decided to purchase. It’s a brave new retail future. But as Dorsey noted, it’s coming faster than we think. A constant source of inspiration for him is science fiction writer William Gibson’s quote: “the future is already here – it’s just not evenly distributed.”

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