Retail in 2013

I had written about Indian Retail trends and future relevancy in 2008 here. It was a feeling of satisfaction to go back and check periodically and see that most of it was true.

With 4 years, many changes in the economy, professional life, egged on by people, I thought of giving it a shot once again. Here goes:

• With the over capacity of Malls in most places, and most Retailers playing a wait & watch game, ‘Partnership’ aka Revenue Sharing will gain momentum, at least for the next 2-3 years.
• Size will continue being relevant. Most retailers would fit into the 2000-5000 carpet and that too trying it at a couple of locations before going whole hog.
• Those who have not used the time to become efficient in the Supply Chain and merchandising area will continue to bleed.
• The last couple of years have been “Sale/Offer” Price wars driven with dates extending longer than advisable. Who will blink? The larger retailers have a planned approach, the mid & smaller trying to ape are just losing money.
• Loyalty programs except a couple, just don’t seem to work and the CRM/Brand managers end up aping the west. The need is to ‘Listen’ to the customers/prospects on a consistent & sustained basis.
• Convenience has become big, particularly with E tailers willing to bleed to acquire customers & there seems to be no game plan to combat this except get on the band wagon.
• “Social Media” the new go to tool for marketers, will continue to fail, unless it is used for the purpose it is designed.
• ‘Analytics’ a word passionately used by everyone, but there is still no decision matrix applied on the results and I see this continuing.
• Advertising will continue it’s growth because it is the easiest to utilize.
• Hiring at the Top will become economical with Deliveries & Goals linked variables; at the middle will remain constant, with processes & systems taking over; will be expensive at the bottom, competing with other industries.
• Consumers will continue to be fickle, demanding with the options and communication available.

Focus, Investment, Evaluation, Mid changes, keeping a constant eye on the bottom line would be the way to go forward.

Anaggh Desai

Conceptualizer, Visionary, Strategic thinker, Executioner, Aggressive, Focused  Meticulous, with superlative team building, people skills, excellent net worker, sensitive & accessible to employee & vendor needs is how colleagues & people describe him.

This post first appeared on Anaggh Desai’s blog http://www.anaggh.com/2013/01/21/retail-2013-some-thoughts/ on 21st Jan 2013.

Anaggh tweets @anaggh. Feedback is welcome.

Well, I have this habit of asking some pertinent, some irrational but all very specific questions that irritate. In this case the  questions are:

• Why should I enroll in a membership program?
• What is the cost of enrolling in a membership program?
• Who is it devised to benefit? Is there any benefit to me as a customer?
• When am I going to get the benefits after enrollment?

Loyalty is earned, not bought

Have seen these membership programs since 70’s in the last century. There is nothing new about what  these new age retailers are practicing. Back then we had a Jeweler & Utensil Store in Nagpur named ‘Pethe Jewelers & Utensil Store’ in ‘Bardi’ (Name of the locality/market) he had a simple deposit scheme with various benefits attached. And believe me nearly every family in Nagpur was a member of this scheme.

Apna Bazar in Mumbai had one program where customers were given a book & all purchases at Apna Bazar entitled them to some stamps which the customer used to stick in the book & these were later redeemed at certain value. Have seen this program in 80’s.

It would be prudent to point out that in those days there were no computers to calculate, no software to track, no mobiles to call or SMS. Yet, both these schemes were extremely successful at the time & in different towns/cities with entirely different demographics.

What made these programs so successful? Indeed, its the customers’ participation that made these programs successful. Why did the customer participate in these programs? Its the simplicity of these programs, the visible gains & the trust.

Two common elements in both the schemes –

1)      Both the schemes did not charge the customer to participate in the program.

2)      Both the schemes did not write off benefits at the end of the year.

Have you noticed so far I have not used the word ‘LOYALTY’ even once!! Except in the heading. Any such programs are just programs / schemes and nothing else. One can call it Customer Benefit Schemes / Programs at the most. But to call it ‘Loyalty Program’ is a bit far fetched. I’m not at all  undermining the importance of such programs / schemes. These programs sure have their value to retailers & customers. Maybe they are more skewed to benefit the business more than the customer.

If retailers are planning for some such similar programs, I would urge them to consider the following few points very seriously.

1)      Do not ask the customer to pay for enrolling in these schemes which you call the Loyalty Programs. I’ve seen most retailers commit this mistake. Why should a customer pay for bestowing his loyalty to your store? This really doesn’t sound logical to me. In fact, shouldn’t it be the other way round? A customer should be paid for sharing his personal data like Name, Address, Contact Information & Other details that are asked while enrolling. Maybe not in cash but in kind.

2)      Do not ask a customer to carry a Plastic Card of his membership in these days of Mobile Phones. Imagine a customer carrying 10 cards in his pocket all the while & is denied any benefits of the membership just because he has forgotten to carry a card. Mobile phones are the only thing a Customer will never forget to carry.

3)      Do not write off points accumulated in the customer’s account just to make your balance sheet look good at the end of the year. Instead, send her a gift of the same value.

4)      And last thing – Do not discontinue a customer’s membership even if she does not shop with you for years together.

Retailers can start with acknowledging & greeting a customer as he walks in to the store, even couple of Eclairs will do to start with. Remember: Loyalty is Gained. A Customer who comes to your store irrespective of any such programs repeatedly is a loyal customer. Give it a thought: Why would & should a customer come to your store repeatedly? More about it later.

Prasad Deshpande

@PrasadDeshpande

Born in Nagpur, Prasad’s early life was spent in places like Kanpur, Delhi, Trivendrum before he settled down in Mumbai in 1983. He graduated in Economics from Ruia College & topped it with a management degree.

Prasad started my career in sales with a company selling Databases. And later moved on to selling media traditional ATL to non traditional BTL activities and in the process acquiring rich experience in nuances of media / activity planning, execution & budgeting for all India campaigns. He then moved to Damas Goldfields Jewelry (India) a Jewelry Retail company based out of Dubai. Taking charge of Marketing Services & PR. Later moved on to head similar division at The Bombay Store.

Currently engaged as design consultant for a Dubai based company & have completed a Brand Identity Creation of a new product range in perfumes & fragrances to be launched by ‘M S Dhoni’. Having worked and successfully delivered on the packaging for the Brand ‘M S Dhoni’ Fragrances, have been entrusted with another global Brand ‘Madonna’ on similar product lines.

Loves reading books both fiction & non-fiction & traveling. Have interest in exploring new technology as it develops & try and adopt it to solve some routine & mundane jobs. And last but not the least, have keen interest in exploring avenues which are non traditional till they become traditional.

RAI was set up in 2004 as a not for profit association to help the growth of modern retail industry in India and has always been at the forefront, leading the industry through our efforts in advocacy, talent development & building a strong knowledge base.

Keeping this in mind, we’re starting this blog to share stories, ideas & updates. We want to share with you the best of the web, right here, on this platform.

I urge you to be a part of this endeavour. Please feel free to contribute, comment or just collate information from this platform. Read what the thought leaders have to say. 

 
Kumar Rajagopalan
CEO, Retailers Association Of India