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.

  1. Rakesh Sharma says

    Many Indian companies are now giving out loyalty programmes. From shopping malls to banks to flights, all seem to have the same mantra to retain their customer base – dole out loyalty programmes. But many a times, a loyalty programmes is far to extended and a customer never reaches the point where he/she can redeem the benefits. Well now this online grocery store is doing just the opposite. They are offering loyalty points at various stages. A customer can redeem a bonus when he/she reaches 100 points or can wait to reach 500 points. This is a very good idea given the fact that customers don’t want to wait too long for a bonus gift.

  2. Smritee says

    It is indeed a nice article written @ Aseem.

    Loyalty program has never been the answer to differentiate retailers. In itself it cannot. Loyalty program is just a tool to collect information on the consumers and their buying patterns. The Loyalty program in India still has not evolved. Tell me something if it is called a ‘loyalty program’ then why do retailers buy loyalties from customers. Since when have loyalties been bought? Infact Pantaloons has just recently revamped their loyalty program giving out their green cards for free along with other benefits.

    Also retailers should move away from giving miniscule offers on loyalty programs to their customers for it really does not help in changing their loyalties. I as a customer may have 5 loyalty cards of different retailers but I may be shopping only from Pantaloons or maybe Shoppers Stop. Instead retailers should look at giving integrated benefits for example if one shops at Crossword then he or she should get benefits in other formats of Raheja Group like Shoppers Stop the next time they shop.

  3. Altaf Rahman says

    Another excellent article @ Aseem,

    Only last night I was reading an article on Shoppers Stop in Business Standard which I felt is excellent and is relavent in this article.

    Hope Trak readers will enjoy it.

    Just my two paisa :)

  4. Ram N says

    Also the return of many NRI’s (the indian resources from Middle East also could help the Retail industry soon.

    Isn’t Big Bazaar part of Future group …
    //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.//

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