Great Clips x Purdue

UX Design + UX Research

Great Clips sponsored our team of Purdue students to compile a list of recommendations based on research regarding payment methods that they should implement in their stores.

My Contributions

Literature Review
Competitive Analysis
User Interviews
Documentation

Who is Great Clips?

Great Clips is a national hair salon brand committed to utilizing technology to give customers a fast, convenient, and comfortable haircut experience.

Project Goal

Scope

Great Clips tasked our team with studying the current payment landscapes and trends to formulate recommendations of which payment methods would be the most impactful for hair salons right now and in the next three to five years.

Problem Statement

Identify upcoming changes within the payment landscape to provide recommendations for Great Clips to stay on trend within the rapidly developing landscape.

Stakeholders

Great Clips Corporation

Great Clips Employees

Great Clips Franchise Owners

Great Clips Customers

User Group

For this project, our sponsors requested we focus on Great Clips customers. Since this is a large user group, our team decided to categorize this group into three behaviors based on the secondary research we did:

Paying with card (credit or debit)
Pay with cash
Pay with smart wallet

Our Research

Current Retail Payment Trends

Question we wanted to answer: What are current salon and retail payment landscapes like?

Goal

Analyze and understand the current payment processes for major retailers and how they are moving forward in the next few years.

Outcomes

Analyze already synthesized research from Great Clips sponsors
Competitive analysis via market research on current retail payment
Observation on current retail and salon payment experiences
Research on tipping motivations and behaviors

Competitive Analysis

What is a competitive analysis?

An assessment of the strengths and weaknesses of current and potential, direct and indirect competitors.

Goal

Understand where Great Clips’ payment landscape stands compared to its competitors, along with where the salon stands in comparison to retailers.

Approach

The team, with the aid of Great Clips sponsors, was able to compile a list of direct and indirect competitors. These included:

Direct Competitors

Sports Clips and Supercuts

Indirect Competitors

Retailers: McDonald's, Starbucks, Panera Bread, Amazon Fresh, and Target
Service providers: West Lafayette Doggy Daycare, Kindercare, Planet Fitness, Air BNB, Car Washes, and PetSmart

The criteria and features we focused on during our competitive analysis were the ability to link digital with physical spaces, self-service payment experiences, NFC payments, current payment standards, and early adoptee characteristics. We chose these measures because they included payment landscape norms and trends found in our primary research.

Visualization of our competitive analysis. Main takeaways listed below.

Takeaways

We found that service-based industries and Great Clips’ direct competitors lag in comparison with retail businesses. They are missing:

Self-service payment experiences
Acceptance of NFC payments
Adopting early trends within the payment landscape

Payment Methods

Goal

Compile research regarding upcoming and new retail payment trends to aid Great Clips in their pursuit of staying on trend with provided payment experiences.

Approach

Great Clips is looking for recommendations that allow them to fall within the early majority of trend adapters. However, the team also researched trends that fall within the innovators' and early adopters' categories.

By researching the trends on the curve, we will be able to use our findings to measure our recommendations towards the end of our project.

Takeaways

Some insights our team found are:

BNPL (Buy Now Pay Later) is prevalent, expected to continue growing in user numbers, and is expanding to non-retail markets
Self-service payments are being increasingly adopted
Mobile payments, especially integration with retail apps, are becoming more prevalent

Tipping Research

Goal

To determine how the tipping process may affect the overall payment experience for Great Clips customers.

Approach

We realized we needed to research tipping while compiling research on various companies' payment methods. Our team then began researching how tipping affects the buyer and seller's payment process and experience.

The team compiled research on how payment trends affect tipping. We found that tipping does affect both the customer and seller. Our team wanted to determine how customers are motivated to tip and how behavior is factored into this tipping process.

Takeaways

Requesting a tip too early turns customers off from tipping
Tip Recommendations affect the customer’s experience
Customers tip to avoid feelings of embarrassment or unfairness
Tipping has become normal in our society

This information has aided our team by showing us the magnitude and influence tipping has on customers and companies who sell services. This research will aid our team in finding satisfactory payment methods for Great Clips, as well as aid our team in compiling future research.

Competitor Observations

Goal

Gain a comprehensive understanding of people's preferred payment methods, examine the impact of various payment methods on the customer experience, identify successes and pain points in both app-based and in-person payment experiences, and subsequently explore opportunities to implement observed successes in the future of Great Clips' payment processes.

Approach

After researching the payment methods of many different companies, we realized that we needed to conduct some observations. Our team then began to selectively enter brick-and-mortar stores to conduct user observations based on competitive analysis. These stores and salons included:

Retail: Walmart, Target, McDonald's, Starbucks, Boba Shop, Uber, DoorDash
Salon: Renu Hair Salon, Local West Lafayette Salon, Sports Clips

Takeaways

Manipulative Tipping Methods: Some businesses employ manipulative tactics in tipping processes, which can negatively impact customer experiences.
Influential Tipping Choices: Tipping choices may affect future consumer experiences, emphasizing the need for transparency so customers can make the choices they want more unencumbered.
Venmo's Popularity: Venmo's rise indicates a growing preference for digital payment platforms in peer-to-peer transactions.
Mobile Payment Encouragement: Major companies like McDonald's, Amazon, Uber, and Target actively promote app/phone-based payments, reflecting a broader trend in various industries.
Digital Transformation: The shift towards mobile and app-based payments is not limited to specific sectors, signaling a widespread transition in the payment landscape.

Great Clips Observations

Goal

Discover people’s preferred payment methods, the motivations behind such preferred payment methods, and how those payment methods affect the customer experience. Learn more about tipping behavior.

Approach

Logistics

Location: Great Clips, 354 E State St, West Lafayette, IN 47906
Date: October 11, 2023
Time: 12:00 PM - 1:00 PM

With permission from the franchise owner, two team members sat in the lobby of the Wabash Landing Great Clips to quietly observe customers’ payment experiences. We took note of demographics, type of payment used, and tipping behaviors.

Takeaways

Great Clips’ customer base is mainly men
Great Clips supports a wide age range of customers
The most popular payment method observed was card, specifically tap to pay with card
- Most popular with younger generation (college-aged)
The older generation preferred cash over card
Most customers used the pre-set tipping options
The entire experience is fairly quick, lasting about 10 - 20 minutes
- The payment process specifically lasted around 2 minutes

Additionally, by gaining a comprehensive understanding of the process through observations, the team was then able to construct a thorough journey map. This journey map is outlined in the next few pages.

Journey Mapping the Customer Experience

Goal

Construct a visual representation of the customer journey to identify customer emotions, pain points, and areas of opportunity for our team.

Approach

The team used information from Great Clips salon observations to inform the created journey map. We focused mainly on the payment experience specifically but did include a brief overview of the entire journey. After mapping out the possible actions a user could take, the team identified possible customer emotions and pain points, along with areas of opportunity for our team.

Takeaways

Emotions

When customers are paying using the terminals available (Ingenico terminals), they may feel unimpressed.

After completing payment, customers are asked how much they would like to tip. They are provided with five options, regardless of the total cost of services:

$5
$7
$10
Custom
No Tip

Tipping may feel awkward for customers since their stylist is across the counter. Customers may also feel uncomfortable with the high pre-set tip amounts.

Pain Points

Customers may feel little motivation to download the Great Clips app since it is only used for checking in. If paying or tipping with cash, Great Clips may be low on cash or not have the correct change.

After completing payment, customers are asked how much they would like to tip. They are provided with five options, regardless of the total cost of services:

$5
$7
$10
Custom
No Tip

The percentage of the total cost is not shown, just the dollar amounts shown above. Furthermore, the tip amounts do not change based on the total cost of services.

Areas of Opportunity

Preset tip amounts could alter based on the total cost of service or whether or not an additional hair product was purchased.

The preset tip amounts could show the dollar amount and the percentage.

E.g. On a $18 haircut
- $5 tip, 27.7%

Customers could receive their tips electronically via email or text. Or, they could see their receipt in the Great Clips app.

Overview of the journey map we created.

The Future of Payments

Question we wanted to answer: What does the future of payments look like at Great Clips?

Goal

Discover and analyze upcoming trends in the payment space in order to determine how those trends can be incorporated at Great Clips.

Outcomes

Research on the future of payments

Exploration into the Future of Payments

Goal

We looked for articles about how new payment trends and ideation can incentivize non-tech-savvy people to use branded apps and find the pain points we need.

Approach

After completing the journey map, we realized we needed to research future payment methods. So our team set up two lookup directions, and each team member researched these questions, trying to find new payment trends and ways to incentivize non-tech-savvy people to use branded apps.

Takeaways

Future predictions: Shift from cash to digital payments.
- Research estimates 1.9 trillion global cashless payments by 2025, an 80% increase from 2020.
User Behavior: Growing preference for digital payments.
- Businesses adapting to changing consumer behavior.
Contactless Trend: Rise of contactless payments.
- Faster, hygienic alternative to traditional methods.
Mobile Wallets: Leading in digital payments.
- Secure hub for multiple payment options within favorite apps.

Enhancing the Payment Experience

Question we wanted to answer: How might we make the payment process more attractive to customers?

Goal

Analyze the current customer experience to find areas of opportunity for Great Clips.

Outcomes

Affinity diagram of interview insights
Recommendations for Great Clips

User Interviews

Goal

Learning the payment preferences, motivations, and customers’ tipping habits in the salon environment.

Approach

Due to the broad age range of Great Clips customers, we found that it would be helpful to interview participants with UserInterviews.com. We created a screener to find participants who go to a chain salon and use various payment and tipping methods.

Participant Information

We conducted 10 user interviews from November 10th to November 27th.

Demographics:

9 out of 10 participants were male
Age ranged from 29 to 62 years old
From all across the United States

Takeaways

Payment Preferences

The majority of interviewees preferred to pay for their haircut using a smart wallet, with the rest indicating they preferred credit/debit. Surprisingly, not a single participant indicated they would rather pay for their haircut using cash. Interviewees cited the ease of use and quickness of paying with smart wallet is why they preferred that method.

Tipping Preferences

In general, interviewees enjoyed the pre-set tipping options, with one participant saying that it cut down time on doing the math of how much to tip the stylist.

We also found that many interviewees like to tip the stylist directly, with either cash or Venmo. Upon further questioning, almost all participants revealed that they wanted to be sure that 100% of the tip was going to the stylist.

Additionally, we found that some participants feel an obligation to tip, and 1/10 of the participants feel guilted into tipping a larger amount when there are steep tipping prompts.

Although it was only discussed in 4 interviews, 3 out of 4 participants indicated that they would like to see both the dollar amount and the percentage of the total on pre-set tip options.

Customer Experience

One interview participant had expressed that “a good experience is one I don’t have to think about”, with other participants echoing the same idea. This led to our takeaway that customers want a seamless, quick, and easy experience.

We also learned that users do not want a self-service checkout experience at salons since they enjoy the interpersonal connection with their stylist.

Our Recommendations

Goal

Our goal for this section is to collaborate as a team in order to finalize our recommendations to hand off to Great Clips.

Approach

After completing our secondary and primary research, the team compiled our findings to provide actionable recommendations for Great Clips to implement.

Digitalization Recommendations

Enhancing the Great Clips' App

Through the areas of opportunity discovered during journey mapping, along with conversations during interviews, the following recommendations are ways we found the current Great Clips app could be enhanced.

In-App Payment: One-click payments within the Great Clips app

Combined with our interviews and competitive analysis, we found that according to the current development direction, in-app payment is a very important link. A simple and practical in-app payment can be a good way to reduce the user's payment troubles and can increase the utilization rate of the app.

In-App Coupons: Digital coupons integrated within the app for customer convenience

In our interviews, a few interviewees mentioned the convenience of digital coupons. If digital coupons were integrated into the Great Clips app, customers would be easily able to find and use their discounts. This could also lead to an increased use of the app overall.

Viewing Receipts In-App: Ability for customers to review their haircut history and receipts within the Great Clips app

Through our observation of users, we realized that the steps for obtaining receipts are cumbersome. From retail observations, we found an increased use of digital (text or email) receipts. During our salon observations, we saw that most people did not want a paper receipt. Integrating haircut history into the Great Clips app would allow customers an easy way to search through their payment history.

Concerns

Practically, we understand that app changes will take time and funding. However, as apps for retailers and food providers are becoming the norm, we think it's a worthwhile consideration.

Utilizing Digital Landscapes

We recommend continued utilization of digital payment methods and experiences. In an analysis of various retail stores’ payment methods, we found that many utilize digital payment methods. Recognizable stores such as Mcdonald's and Panera Bread have implemented digital payment methods into their stores. This research showed us that digital payment methods are on the rise and are being used within businesses. We found from this compiled research and user interviews that users prefer digital payment methods. Here are our team’s recommendations for Great Clips:

Digital Couponing: Digital coupons are coupons that can be used within an application or digital payment (e.g. smart wallet). We found that customers enjoy and prefer digital coupons overall.

One user from our interviews said they have not seen digital coupons used but would like to try them. Four interview participants stated they prefer to use coupons digitally.

One user stated that they found digital coupons to be finicky and take too much time to handle. Another user said they prefer to use physical coupons.

Digital Receipts: Digital receipts are receipts that customers would claim through a digital transaction (e.g. email and texting).

Two interview participants said they would prefer digital receipts by email.

We found some customers do not choose to take a receipt after they receive a haircut.

Utilization of Smart Wallet: A smart wallet digitally stores a user’s payment method, such as their credit or debit card. This wallet would also be able to store gift cards. Our research and interviews found that users prefer to use smart wallets to pay for their haircuts.

60 percent of interview participants prefer to use digital credit/debit cards and smart wallet payment methods.

Other interview participants found smart wallets to be awkward and take too much time.

More Concerns

If Great Clips decides to utilize and rely on digital payment methods, if the digital systems were to fail, this could cause problems for customers and Great Clips.

Modernizing Payment Terminals

The adoption of contactless payments and mobile wallets has increased. Customers increasingly prefer the convenience and speed of tapping their cards or using their mobile devices to make payments, and utilizing products, such as Square, are preferred in the market.

The observations indicate a prevalent use of Ingenico payment terminals, which may potentially limit the incorporation of in-app payment methods such as Apple Pay and Google Wallet. Interviews revealed a 48.3% preference for Apple and Google payment options. Adopting solutions similar to Square could open the path of integration with Apple and Google payment methods, enhancing the overall payment experience for customers.

Concerns

While Square and similar solutions offer streamlined payment processes, challenges may arise within the customer base. Some customers may resist adopting new technologies, particularly if they prefer traditional payment methods. Limited accessibility to smart devices and security concerns pose additional obstacles. Preferences for diverse payment methods, including Apple or Google Pay, coupled with potential dependency on internet connectivity, further contribute to the complexity. Striking a balance between modern and traditional options, offering comprehensive training during the transition, and ensuring device compatibility will be vital in addressing these challenges and providing an inclusive and seamless payment experience for all customers at Great Clips.

Tipping Recommendations

Supporting Digital Tipping Methods

Our research helped our team realize that the tipping process could be updated to allow for a more comfortable customer experience. Some recommendations our team is proposing Great Clips implement involve the utilization of PayPal or Venmo and an app-integrated experience.

3/10 interview participants preferred in-app tipping to avoid on-the-spot tipping. We also see a rise in the popularity of Venmo as a payment and tipping experience. For tipping specifically, many salons have a link to individual stylists’ Venmo, so you can be sure that all your tips go directly to them rather than to the business.

Another finding from our user interviews was that users prefer that their tips be sent directly to the stylist.

Concerns
Many independent salons use Venmo and Paypal to tip their stylists directly, but with Great Clips being a much larger company and business this may not be as feasible.

Clarification Prompting

We recommend including clarifying prompts to communicate tipping transparency with Great Clips customers. We envision such prompts to be shown as pop-ups in the app before tipping decisions. We recommend the following prompts:

A promise that 100% of the tips will go directly to the stylist.

“100% of your tip will go directly to your stylist, (insert stylist name).”

We found that customers care a lot about having 100% of their tip go to their stylist and having their tips not be counted as taxable income. For some, these are the only two reasons and motivations to tip in cash as opposed to card or other digital payment methods.

20% of our interview participants preferred tipping in cash for this reason. By assuring customers explicitly that 100% of their tips will be going to customers, customers do not have to sacrifice convenience and have the freedom to tip in their preferred payment method.

Concerns
We understand that this recommendation would not be feasible and viable on an Ingenico terminal. This recommendation would only be feasible with a more updated payment terminal.

Displaying Dollar Amount & Percentage on Pre-Set Tipping Options

We recommend displaying the dollar amount and percentage amount on the pre-set tipping options provided by Great Clips.

Example of Pre-Set Tipping Options on an $18 haircut:

$5 (27.8%)
$7 (38.9%)
$10 (55.6%)

Custom Tip
No Tip

This was only discussed in 4 out of 10 interviews. However, 3/4 of those interviewees mentioned that they would prefer to see both the dollar and percentage amount.

Concerns

We understand this may negatively affect stylists’ tips, but could increase customer experience and perception of Great Clips. *Due to the low number of participants who mentioned this and the possible effect on stylists, we recommend further investigation into this topic.

Other Recommendations

While conducting the research, our team generated some ideas that are not directly supported by evidence (or necessarily related to payments) but are potential avenues for further exploration.

In-App Stylist Notes

The ability for customers to view or suggest changes to their stylist notes on their haircuts. This would allow customers the ability to know what type of haircut they got, and be able to convey next time what they enjoyed and what they might change.

Ability for Customers to Choose a Stylist

During interviews, we discovered that many participants wanted consistency with the stylist they had cutting their hair. One interviewee even said he was transitioning away from Great Clips because he wanted a consistent stylist. Due to this, an idea we had was the ability for customers to select a specific stylist when joining the wait list. Stylist profiles and descriptions could also be included within this feature. An extended wait time should be communicated to the customer (if applicable).

Coupon Notifications

One of our recommendations was for coupons to be integrated into the Great Clips app. A further idea on this suggestion would be to send push notifications to customers with the app with:

Ways customers can receive coupons (e.g. survey opportunities)
Reminders to use claimed coupons
Notifications of upcoming deals

References

Payment Trends Research

Tipping Research

How Payment Method Affects Tipping

Tipping in Salons

Effects of Tip Request Timing

Behaviors of Users and Employees Surrounding Tipping

Motivations of Tipping

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