Indian Retailers offering Loyalty Programmes to woo consumers!

The Indian retail industry is expected to grow to around US$ 800 billion by 2015 with more than 20% being contributed by the organized retail formats. Despite poor infrastructure, lack of cold chains – a necessity for food retail, availability of trained manpower and many other difficulties, India has been regarded as one of the top most destinations to watch out for as far as the retail sector is concerned.

But the biggest problem facing the retail sector is the absence of much differentiation between say a Reliance Fresh and Big Bazaar or a Westside and a Shoppers Stop or a Landmark and a Crossword. There doesn’t seem to be any difference in positioning between any of them or if there is, I doubt the public is aware of it.

Indian retailers seem to have finally understood that to survive in the long run, they need to do something different which would attract customers. And they seem to have found their answer in loyalty programmes and schemes. A loyalty programme is something which can attract a customer again and again to a store. It encourages a customer to spend more to buy more.

From Tata Docomo’s special T24 connection in partnership with Future Group to redeeming points at Lifestyle and Shoppers Stop to discounts on basis of gender at Van Heusen, retailers seem to be identifying newer methods of catching their customers and retaining them.

Shoppers Stop and Reliance Retail along with many others are encouraging their loyal and privileged customers to shop at particular times of the day and month. Probably they could be informed about special offers, discounts and this way the retailers could study their buying patterns. Customization on the basis of their demographics and psychographics is becoming the name of the game as all these retailers have databases of loyal customers.

But then the number of loyalty program members in India is still very low at around 20 million. With the advance of the retail industry, this is surely expected to go further up. But the question remains on whether loyalty programs are the only answer to retailers differentiating themselves.

Branding / Positioning

I doubt if any of Spencer, More, Reliance Retail, Big Bazaar have concentrated on branding. Even if they have, it must be really negligible. Future Group has branded to a large extent but none of the others. In the fast competitive world in any industry in this country, branding and positioning is taking a very important role.

Service / Process

The customer touch-points which involve the interaction of a customer with a store need to be properly managed. These involve the interactions before he reaches the store, while at the store and after leaving the store. I wonder if any of the stores give it much importance. Eg: If you see a Big Bazaar or a Reliance Fresh during some sale or something, get ready for chaos. No one knows what to do.

People and Physical Evidence

Since a retail store is an integral part of the service industry, the people they employ and their physical evidence should be such that the customer comes often. It shouldn’t look like that the customer is buying from the road. If he goes to a store, it should look at least like a store.

In an industry which is crazily expanding every day, along with loyalty programs the above methods need to be keenly followed so that companies can move ahead of their competition.