Ep 186: How do we make circular behaviours irresistible?

[01:00:08.000] - Lou Waldegrave How do we make circular behaviour irresistible? Well, we're about to find out because today I'm joined by Georgie Rose, Circular and Innovation Lead from Selfridges, and Simon Davies, Visa's Head of Large Merchant Sectors. They're going to be telling us how they are working together to try and achieve exactly that. Georgie, Simon, thank you so much for both joining me today. I think we should just crack in there with the biggie. How do we make customer experience so rewarding it becomes irresistible? [01:00:49.360] - Simon Davies Cool. So, um, thank you. I think it's, it's-- The answer to this is quite broad because, um, well, in, in, in the guise of, kind of, re-commerce, we, we, we think of it in a number of different use cases, right? So, within Visa, we, we talk about resale, repair, rental, refill, return, and redistribute, trying to get all of those out. Um, and, and each of those will come with their own flows and payment experiences. And, and from a-- from a Visa point of view, it's about ensuring that's, that's seamless. That's, that's kind of fully embedded in, in general customer experience, which is, kind of, how we work within Visa. [01:01:26.280] - Simon Davies Um, to support that, then you have sort of different payment capabilities. So, where you think about Visa Direct which, which can enhance or enable instant payouts linked to, to kind of refillables and those and, and returnables and so on. But also about tailored solutions. So, where we're a lot about data and insight in Visa, um, about kind of understanding what a consumer is going to do before they actually do it. [01:01:50.140] - Simon Davies So, within, within sustainability, we look at Visa Sustainability Index, which can inform and, and, and provide our partners with that insight. To think about it in the guise of, you know, where, where we want to make it seamless. And me as a consumer, I'm getting-- I'm getting told within my banking app that, that a purchase I just made at Selfridges has actually just, just impacted positively around carbon footprint and that kind of stuff. So, those things should just happen and be embedded in that experience. [01:02:16.820] - Lou Waldegrave So, Georgie, Selfridges and Visa, how have you guys come together to crack open these opportunities? [01:02:25.520] - Georgie Rose So, we've been working really closely with Visa and Visa's behavioral experiment partner, Mindworks, to understand how we can capitalise, really maximise the, um, use of our existing messaging and branding. So, we, we haven't kind of started from scratch. We've taken what we're existing, what we're doing today already, and we're trying to enhance that using specific framing techniques that we have no idea about. [01:02:48.490] - Georgie Rose So, we're using really subtle variations in language and framing to understand what kind of piques customers' interest most. So, we're trying out these variations in language in isolation, um, and we will see over the course, the duration of the experiment, what happens and, and what is most effective. And we're really excited to see the results, results, and we will take the, the use case that works most effectively and roll, roll that out. [01:03:17.580] - Georgie Rose And, really what the framing is trying to do is capitalise on our kind of inherent desire as customers to mimic what other customers are doing. And, so, we've learned loads from Mindworks around how customers often want to copy. So, some of the language we're using is, "For everyone else has started using refill, why don't you join in? Do, do it, too." But interestingly, we're also trying to out the flip side of that. So, um, start a trend, be the first, and we're testing to see which one will be most effective. [01:03:47.860] - Lou Waldegrave So, just so we all know, how do Visa and Selfridges come together to collaborate on this journey? [01:03:55.700] - Simon Davies Yeah, so the, the, the lab that, that Georgie mentioned it's, it's-- I guess, between us, we'd scope out the project, and there's a defined process around that, which allow us to kind of test and, and experiment in, in real life, and kind of monitor the data at different stages. We'll look at, at, at what the output looks like, and then ultimately we'll have the, the end of the, the experiment output. Um, and between us, we'll feed that back into, into our businesses, but we want to more broadly drive thought leadership as well. So, those kind of results will, will be open and, and shared more openly. [01:04:27.340] - Lou Waldegrave So, this is the behavioral lab, is it? And is that where Mindworks comes in? [01:04:32.480] - Georgie Rose Yeah, exactly. So you've kind of got three players in this, and we're all using our kind of skills and assets to capitalise and make the most of this experiment. So, you've got Selfridges, so we're obviously providing the store, the customers. You've got Visa, who have brought everyone together, providing the funding. Thank you (laughing). We've got Mindworks, who, um, are the behavioral change experts, who are helping us with that language and framing that I mentioned before. Um, and together, we've kind of co-created this experiment, started with workshops back at the start of last year, unpicking what this could look like and all of the different options. Um, and here we are a year later with the experiment live, and, and then Visa and Mindworks will help us with the analysis and the next steps as well. [01:05:11.240] - Lou Waldegrave How's it going so far? [01:05:13.000] - Georgie Rose Really well. Um, so we've been running it for about three months with all of those different messaging variations in isolation, as I mentioned. And we haven't yet analysed the results, but, um, qualitatively, we've heard from the store team members that they're definitely getting more conversation around refill, which is really exciting. [01:05:28.960] - Georgie Rose Um, and yeah, as I say, just really excited to see what has actually been most impactful when you look at the stats. Um, but fundamentally, we've just taken so many learnings for how we communicate around Circular more broadly anyway. We hadn't ever looked at language in this way, um, and how nuanced, um, certain messaging can be. Um, so yeah, really important, well, learnings for the wider business. [01:05:51.900] - Lou Waldegrave When you talk about refill, what products are you referring to in particular? [01:05:56.460] - Georgie Rose For us, it's really beauty. We do have home refill as well. This experiment is on beauty products. [01:06:01.620] - Lou Waldegrave And that's where you're focusing at the moment, both of you. [01:06:04.510] - Georgie Rose Yeah, exactly. Refill is a really interesting one for us in Selfridges because, unlike our other circular business models, the product exists. It's in the stores. We're not actually launching a new product or necessarily a way of buying, unlike with kind of pre-loved and rental. It's all about how we amplify, um, and make people aware that those refills exist. [01:06:25.640] - Lou Waldegrave Okay, so why do you both see this as an imperative way forward for the future of the customer experience? [01:06:34.380] - Simon Davies I think the-- There are trends and there are changes in demand. And, and as Georgie mentioned, I think we've got to find those subtle kind of levers to pull in. And without being-- it being a hard marketing push, it's more about finding subtlety and, and kind of almost the subliminal messaging to, to drive that awareness. And there's, there's heaps of data, um, sort of data, and insight and research that we've done which, which talks about what customer expectations are, especially generationally. [01:07:00.650] - Simon Davies So, you think of kind of Gen Z and millennials. I think we saw some research that said 40% of Gen Z and millennials consider themselves to be sustainable disability champions now, um, and a further 30% recognise themselves more passively. But we also see, like generally, I think consumers, whilst they have intent, and it's kind of nearly 90% of consumers have this intent to be more sustainable in their spend behaviour, it's only kind of sub 30% actually action that. So, we wanna-- we wanna bridge the gap between that, that intent versus the action. Um, so yeah, I think that's, that's kind of-- I guess, that's the hypothesis we're trying to prove out, right? Based on everything that- [01:07:37.720] - Lou Waldegrave So, you're both generally really seeing it as a growing trend, and especially among millennials and Gen Z. That's brilliant. [01:07:45.560] - Georgie Rose It is. It is brilliant. I think that say do gap, though, is still- [01:07:48.940] - Simon Davies Yeah. [01:07:49.510] - Georgie Rose Very present, unfortunately. And we see very similar trends and stats to what Simon was just saying. So 50% of our customers say that they know how to shop sustainably, but they find it time-consuming or expensive or, or difficult. And so for us, and really what we're trying to do with the experiment with Visa as well, is make shopping circular and shopping more sustainably feel as intuitive and easy as buying new, and actually as exciting and desirable as buying new as well. [01:08:16.680] - Lou Waldegrave So, making it the norm. [01:08:18.740] - Georgie Rose Making it the norm- [01:08:19.520] - Lou Waldegrave Yeah. [01:08:19.960] - Georgie Rose Even better than the norm. We're trying to overturn perceptions that sustainability requires sacrifices. We want circular to appear as more choice, more products, more ways to engage with us. [01:08:30.970] - Lou Waldegrave Yeah. Meeting people where they are, basically. [01:08:34.960] - Georgie Rose Yeah. [01:08:35.400] - Lou Waldegrave So, how do you think we do scale from this transactional relationship most people have with their customers now to something that's long-lasting and bring it to the masses, basically, over all sorts of products and materials? [01:08:53.000] - Simon Davies Yeah, it's-- it needs to be-- We're doing a lot of work in Visa at the moment, which is planning forward. So we've got our 2030 strategy that we've just launched, which, which looks at, you know, where we think things are going to be in 2030 and finding the steps towards that to make sure we, we, we remain relevant towards that. [01:09:10.620] - Simon Davies Um, and, and a big part of that in terms of how we engage with, with people like Selfridges and our merchant partners is, is, is understanding and aligning with their corporate goals and then kind of making sure we move forward in synergy. I think a key part of that as we look forward to 2030, sustainability is, is more and more important to each of-- each of the organisations we work with, not just from a, a regulatory requirement point of-- point of view, but actually how they build that brand affinity and brand kind of loyalty with, with their consumers. [01:09:39.980] - Simon Davies Um, so, and, and obviously, the beauty of what we have in Visa is we, we say in order to look forward, successfully, you've kind of gotta look back and understand what, what, what your experience has been. We've been doing this with-- within Visa technology, uh, Visa sustainability, sustainability tech for a few years now. [01:09:56.380] - Lou Waldegrave Yeah. [01:09:56.840] - Simon Davies So, we're able to kind of look back on that experience, evolve and, and, and update to make sure we, we are, you know, fundamentally embedding this into what we do as Visa with, with, with partners like Selfridges. [01:10:07.340] - Lou Waldegrave And do you guys, just as your experience across the business world, see this as a growing thing across all businesses or- [01:10:16.060] - Georgie Rose Yeah, definitely. I think, um, we've been really lucky to be pioneers in, in the space, or considered pioneers in the space, but we've seen a lot of people following us. Um, I think there are still challenges around how to truly embed it into the customer experience, and the commercials around it continue to be challenging. But everyone is trying, and more and more people are trying, which is-- which is really encouraging. [01:10:37.050] - Georgie Rose And I think what we've seen really in Selfridges as well as this shift to really just embedding it, again, continuing what Simon and I were saying, but embedding it in the everyday circular experience. And as part of that, we're trying to create meaningful connections with our customers around circular in the same way that we do with our wider offer. So it's not just one off, it's creating those long-lasting relationships that you said, Lou. Um, and therefore, we actually avoid any transactional messaging around how we can communicate with our customers. [01:11:05.920] - Lou Waldegrave Yeah, you're creating a much more of a relationship with them as a... Yeah. [01:11:10.500] - Georgie Rose Yeah, exactly. And to the same end, we actually-- you'll see with Selfridges, we avoid any sustainability messaging with our circular models as well. Um, and we focus purely on the relationships that customers have with the products. And by that, we're trying to draw parallels between them and the relationships that we can draw with them as customers. [01:11:27.860] - Lou Waldegrave That's why it's a behavioral clinic (laughing). [01:11:29.540] - Georgie Rose Exactly. [01:11:30.300] - Lou Waldegrave So, sorry, I know you said you're in the middle. When do you see the end of this, clinic? [01:11:36.900] - Georgie Rose Literally this week, hopefully. So we just wrapped up, um, the experiment last week, but analysing the results at the moment. So, um, conversation is very live at the moment, and we are hoping to then take the insights and roll that out more widely because the experiment has been focused on just six brands. [01:11:53.520] - Lou Waldegrave Yeah. Okay. Thank you so much. Do you both promise to come back and let me know how it went? [01:11:59.940] - Georgie Rose Yeah. [01:12:00.400] - Simon Davies Yeah, of course. [01:12:00.540] - Lou Waldegrave Because it would be great to hear the results of this. [01:12:03.690] - Georgie Rose Yeah. [01:12:03.700] - Lou Waldegrave And I'm sure it would be a huge inspiration to lots of other businesses as well. Thank you so much, Simon and Georgie, for joining me today. [01:12:11.660] - Georgie Rose Pleasure. Thank you. [01:12:12.420] - Simon Davies Thank you. [01:12:13.460] - Lou Waldegrave Well, there were some great insights. 40% of millennials and Gen Zs see themselves as circular or sustainability champions. Thank you so much to my guests, Georgie and Simon, for sharing their experiences and giving us such grand insights on how we might all adopt circular business models that are indeed irresistible. [01:12:36.340] - Lou Waldegrave If you enjoyed this podcast, please tell your family and friends, give us a like or a comment, and always remember to subscribe wherever you get your podcasts.