Retail, by definition, has lived many lives. From the familiar brick-and-mortar to the boundary-less e-commerce, each aspires to outlive its competitors by inspiring a new set of attitudes and behaviours in customers. In this ever-changing environment, a few companies have managed to reinvent the shopping experience with well thought strategies that broke the confines of convention, stayed true to customer needs, and changed the game in their categories forever. Each one of these is a revolutionary landmark that has gone beyond creating a unique retail experience to engaging customers and turning competitors into mere imitators.
E-COMMERCE
Flipkart: A Billion Reasons to Buy
First, there was e-commerce. A promising term that delivered the world of travel, entertainment, bill payment and other exciting services at your doorstep. Limited in application, e-commerce websites mostly centred on services that made life easy. Then came Flipkart, and e-commerce was baptised. Suddenly, you could order any product across any category from any corner of the country.
Flipkart was the first major e-tailer to give e-commerce a face and form, so much so that short of going generic, it has almost become synonymous with it. In 2014, they once again changed the e-commerce game in India with its ‘Big Billion Day’. Held on 6th October that year, this event was marketed as the company’s attempt to reach an unprecedented $100 Gross Merchandise Value in 24 hours, a sum which it reportedly ended up achieving in the first 10 hours itself from 1.5 million shoppers.
Investments beyond imagination: In terms of investing into this mega-event, Flipkart can only be lauded. Unique media coverage The media took this mega-event to even more gargantuan levels, both online and offline. Apart from familiar channels, video ads featuring stand-up comedian Vir Das further fuelled dreams and desires. In another first of its kind, an emotional email from the founders forged an emotional bond between consumers and company.
Unexpected challenges: With such pre-emptive and precise planning, ‘Big Billion Day’ was not without its share of problems. Many products flaunted pre-discount prices, making buyers suspicious. To add to their woes, the company’s portal collapsed under the weight of multiple bookings, leading to order cancellations.
Learnings that created a landmark: This open acceptance of their mistakes, something not frequently seen in the Indian e-commerce space, helped people forgive the brand and reinforced Flipkart’s positive image. Proof of this was seen in the success of the second ‘Big Billion Day’ sale in October 2015 that came with welcome improvements such as an extended duration, increased product range, and more targeted discounts.
The biggest difference of the second sale however, was that it was solely app-based. This encouraged a larger migration of customers to the app. Despite its lows, one cannot ignore the fact that ‘Big Billion Day’ 2014 managed to inspire a line of similar promotions from its ardent competitors. Amazon India and Snapdeal paid tribute to this initiative by launching similar offers, fuelling an e-commerce war.
Lenskart: Seeing the Bigger Picture
There are few things that put even the most confident person in a state of indecision, like deciding to buy a pair of spectacles. When it comes to a certain product that is going to sit on your face, perhaps even redefine your image thereafter, you feel the dire need of assurances and reassurances. You try out multiple options and make countless trips to the mirror, or stores. This is indeed a very high involvement choice which Lenskart.com has made remarkably stress-free, speedy and personal – and through an online platform to boot.
Online convenience with offline comfort `Free Home Trial’ was the first service of its kind that offered the convenience of online shopping with the reassuring touch-see-feel experience that Indian shoppers are familiar with. Inspired by the insight that the purchase of a frame involved the longstanding conflict between convenience and cosmetics, sometimes forcing a shopper to opt for one at the expense of the other, Lenskart arrived at an online solution to a genuine problem. The hugely successful service, available in 50 cities, is monitored through a courier service, after which a series of regular follow-up calls are made to effect a sale conversion.
Lenskart had a vision like no other, and saw the potential of high traffic to their website which offered services pointedly to ease an otherwise tedious process. The `Free Home Trial’ initiative received further buoyance with the company’s second gambit, ‘Home Eye Check Up’, which also became an instant tool to aid conversion. Commenting on the success of these unique offerings, Founder and CEO at Lenskart.com says, Peyush Bansal, “these initiatives witnessed high customer satisfaction as they stemmed out of a need to solve a problem, rather than a marketing solution which was launched and then the problem was sought”.
Soon, the company was employing as many as 200 medically trained personnel making house visits across seven cities, for eye check-ups. The success of both `Free Home Trial’ and ‘Home Eye Check Up’ has resulted in a substantial surge in sales conversions, thanks to which the company has opened 150 stores in 65 locations in the country within a brief period of time.
Ensuring conversions Lenskart’s success can be credited to its commitment to taking a realistic view at a problem that can be sufficiently addressed by taking advantage of the regular advances in the field of eye care. This is aided by its insistence on strong customer service, attractive and friendly stores, and keeping in constant touch with potential and converted customers. For example, after a customer visits the site and opts for the `Free Home Trial’ service, a personalized ID is instantly created which enables the company to keep in touch with the intention of making a sale happen – and it frequently does.
Business has grown threefold within the last year, solely from a higher conversion of online traffic. Initially, Lenskart saw little reason for marketing its initiatives across media, and concentrated on ensuring a steady growth of online traffic by sending timely emails to those who didn’t complete their order. It made certain that its growing list of services featured in their site in a way that facilitated regular viewing. Today, it is exploring the prospects of advertising further. Newer offerings are on the anvil, too. One being the `Preset Collection’, geared to hasten and help the process of choosing a frame, especially on mobile screens. Lenskart perhaps rightly claims that it can boast the highest conversion across all e-commerce businesses, while customer acquisition cost has gone down by more than a whopping 50 per cent. It oversees as many as 2500 eye check-ups daily and no less than 10,000 people trying on its frames every day through its various channels.
FOOD & GROCERIES
Big Bazaar: The Bigger the Better
In India, there existed a sizeable segment, for which, either by rupee or ritual, three words encompassed existence: ‘roti, kapda, makan’. Shopping for this segment was mandated only by necessity, not indulgence and definitely not frivolity. Their frugal needs were met by local kirana stores and the modern retail format was beyond bounds and wallet.
Innovative thinking: Big Bazaar tapped this huge segment with sensitivity and, of course, tact. It catered to their mindsets by converting shopping for necessities into a family occasion. ‘Sabse Saste 4 Din’, a promotion that married value-for money with value-for-time – spent with family – was introduced during Republic Day and stretched over the weekend closest to it.
Big Bazaar introduced yet another and similar sale on Independence Day – the ‘Mahabachat Sale’. This was followed up with similar activities on Public Holidays, such as Labour Day, Gandhi Jayanti and Christmas. Big Bazaar, in the process, supplanted a need with the enjoyment of a family day-out. Its strategy focused on increasing consumer and consumption, rather than a discounted event.
By catering to an underpenetrated market, it satisfied the needs of both brand and consumer. Consumers expanded their shopping list as they discovered value in new non-food categories such as fashion, electronics and home linen. On the other hand, this initiative provided an excellent platform for vendors or own-brand manufacturers to launch new products and trends, and for regional vendors to expand their base.
Creating occasions to spend: Big Bazaar denies any competitive angle in its endeavours, it just creates occasions to consume. Every year, these initiatives have been refreshed with a new dimension or a new nuance. For example, what can be offered to ease the transition of a 10th standard school kid on the threshold of college? Or how can the monsoons be made more fun! Giving consumers an affordable reason to consume is what gives Big Bazaar a prominent share of mind in customers.
Big potential: ‘Sabse Saste 4 Din’ along with the other public holiday initiatives has delivered a consistent growth of 25 to 30 per cent. What is indeed a testimony to Big Bazaar’s innovativeness is that its advertising budgets too have reduced considerably, and word of mouth has taken over. According to the company, today, consumers have bookmarked these dates and a little nudge is all they need to remind them. Loyalty programmes communicated by texts and emails to consumers on the move have ensured visits by faraway consumers to their nearest store.
QUICK SERVICE RESTAURANTS
Dominos: Truly Tempting Offer
The early 90s introduced the emerging trend of the pizza – thick, luscious slices slathered with a base of cheese and tomato sauce and toppings as the heart desired. Yet, it was Domino’s that brought order and variety into the pizza business and more importantly, more bang for your buck!
Insight Based: The ‘30 Minutes or Pizza Free’ initiative that the brand launched in 2004 was a real game changer for the organization. This initiative was based on a very relevant customer insight: hunger cannot wait. More than a decade back, home delivery of food was not very common and was often laden with problems of delayed delivery and other issues.
The brand packaged both these insights into a superlative product offering that provided delicious instant gratification, at any time or place the customer needed it. The joy of having a menu that actually appealed to the taste buds delivered in minutes was unprecedented in the F&B world. The chance of indulging in it without having to pay for it added a further temptation. Needless to say, ‘30 Minutes or Pizza Free’ is now synonymous with Domino’s.
The brand had already established pizza as a meal replacement rather than a snack. At the time of its launch, the advertising campaign showcased the superlative acting prowess of Paresh Rawal to drive home the message.
“Since pizza was still a relatively new experience for Indians (back then), the aim of the campaign was to connect the brand with the average Indian by creating a real life, believable character. Paresh Rawal’s comic timing, coupled with the insight of how people adopt various tricks to save money, worked in connecting with the customers while communicating the 30 minutes or free message to the audiences”, said Senior Vice President- Marketing, Domino’s Pizza, Murugan Narayanaswamy.
‘Operations in a machine way and people in a human way’ as a mantra also helped this initiative succeed. Timely delivery is now part of the company’s DNA. Domino’s is constantly measuring and improving its order to delivery cycle to ensure that efficiency is built and delivered every step of the way. In addition, a robust training program, and an understanding amongst employees on how late deliveries could affect the outlet’s profitability has further contributed to its success. Today, Domino’s is the undisputed leader in India’s $400m pizza market.
Mcdonald’s: Great Venue, Greater Menu
There was a time when a middle-class family ate out often, it became an object of envy among neighbours, and of course, speculation: “how do they manage it with his salary?” For a vast segment of Indian society, eating out had for long been a rare treat, a treat that was largely confined to the same outlets, where perhaps the quality of food played second fiddle to another, and more crucial, factor: price. This reality was noticed, and subsequently addressed, by McDonald’s.
When the international burger giant set foot on the shores of this country with the world’s largest middle-class, it immediately discerned a few pointers. One, eating out for most was still a luxury. Two, the burger, though iconic, was still a stranger to the Indian palate, and just Indianising its flavour would not be enough. Three, price was to be the company’s meal ticket, as it were.
Creating Happy Choices: The ‘Happy Price’ Menu was the result and has been a source of continuous success since it was launched in 2004. The company’s advertising not only tickled the discount-seeking Indian with its star offering, the communication also reflected that every McDonald’s outlet was indeed a family venue with a happy menu. Fathers heaved a sigh of relief, children remained ecstatic, mothers got used to frequent breaks from the kitchen, and family seniors too celebrated an occasional departure from a doctor-recommended diet.
Robust Supply Chain Tightens Costs: What perhaps may go unnoticed amid McDonald’s endless bid to befriend the wallet-conscious with a slew of new additions to its product roster is that the cost of the ‘Happy Price’ Menu has remained impervious to inflation. It started off at Rs 20 and now has an extended menu priced at Rs 25. The reason for this can only be viewed as yet another master-stroke on the part of this company – one that has, and suavely, managed to circumvent the middleman.
From the outset, the company strove to forge a robust supply chain, allowing it a direct interface with farmers and suppliers. This has helped it keep a tight rein on its operation costs – and the Happy Price Menu is thus happier for it.
Director – Marketing & Digital, McDonald’s India West & South, Kedar Teny says, “Our ‘Happy Price’ menu invites a price sensitive consumer on eating to their heart’s content without burning a hole in the pocket. The key offering here is good food at an affordable price”.
Imitation is Flattery: The two core ingredients which make Happy Price Menu special are good food and value for money. Sure, other international food chains have followed suit. Subway offered lesser priced variants such as ‘Sub of the Day’, an egg and mayo sandwich at Rs 50 and toasties that were cheaper than their regular menu. KFC attempted to make its Wednesdays better by offering ‘12 for 300’ for a bucket of chicken, but McDonald’s was there first. And is, even today.
ELECTRONICS
Viveks: Actions Speak Louder
If you are in Chennai or Bangalore stumbling home on New Year’s day after an eventful night, do not be surprised to see a never ending queue at 6 am outside Viveks. No, this is not your hangover playing up and yes, this is really happening. This is the continued impact of Viveks Retail Store’s New Year Super Sale that started 40 years ago in Chennai. Dealing with consumer durables from a single store since 1965, at a time when buyers seldom had a say and sellers ruled, Viveks believed in being ‘customer-centric’ even before the word came into power. That is why the company today is thankful – not boastful – of enjoying the goodwill of as many as 30 lakh families in Tamil Nadu and beyond.
Payback Without The fine Print: It all started with a simple idea, but a strange one, coming from a businessman. 40 years ago, B Kothandarama Setty, the store’s chairman, content with the store’s profitability, sought a way in which he could express his heartfelt gratitude to his loyal clientele in a unique way that would touch their hearts. He saw it fit to forego profit for a whole day in a year, and offer goods at cost price to customers who ensured the store did great business for the other 364 days of it.
The Viveks New Year Super Sale was born on Jan 1, 1977, changing the morning habits of countless people on the fi rst day of the New Year for 40 years now. Weather didn’t matter, a place in the serpentine queue did. The response did not just overwhelm, it immediately compelled the event to turn into a three-day affair. “Lowest price of the entire year” was the buzzword, along with the assurance that despite the veritable stampede, the store yet offered genuine products and allowed no slip-ups in its famed ethical service.
Welcome Improvements: Over the years, the increasing surge in footfalls forced the store to dedicate each of the three days to three kinds of customers – those who sought cash purchases, those who opted for hirepurchase and those who preferred to use their credit cards. In the three days of the event, Viveks clocks in sale fi gures equivalent to one month’s average sale.
This year, the mega-event celebrated its 40th year with ‘New Year Super Sale 2016’, and the queues becoming steadily longer. This is despite the online onslaught which continues to shower convenience and cost benefits across every product category on an almost everyday basis.
“A continued customer-centric approach, significant efforts to merit their goodwill by excelling in customer service, and a further push to the frontiers of competitive advantage by imaginative offerings to the customers, is the recipe for our success”, says CMD of Vivek Ltd., B.A. Kothandarama Setty.
Three years ago, they saw another way of doing what it likes best – ensuring that a customer enters the store happy, and leaves it, happier. Namely, the `Rush Hour Sale’. This featured a select set of items that could be yours at prices that no other retail outlet offered. The sale was for an hour – an hour before the shop’s official opening time.
Thanks to people, now used to queuing up before the first rays of the sun, this sale too hit the jackpot. Today, Viveks has 50 showrooms, covering over 200,000 square feet of retail space across Tamil Nadu and Karnataka. And all because, 40 years ago, somebody put the customer first.
FASHION
Allen Solly: Making Fridays Fashionable
If you remember scenes from Indian mainstream cinema of the 70s and 80s involving men in senior positions, you would remember an ensemble called the ‘safari suit’, then emblematic of privilege and power. Both on and off screen, the most glamorously turned out wore dark suits, which could have been uniform shades of brown, blue, black or grey. The 90s saw a different India. The country was on the cusp of becoming international. Western exposure opened minds and changed attitudes. A new kind of work culture emerged fast. Credit cards were acquired faster. India was moving forward – and India’s young had to appear relaxed, smart and confident. Reinventing corporate clothing Allen Solly, a brand which entered the nation’s apparel firmament around that opportune moment, came up with a novel concept called `Friday Dressing’.
It created a brand called `work casuals’, aimed, and rightly, at making the nation’s young workforce embody a sense of free-spiritedness, independence of thought and individuality. The brand did away with the long-preferred muted shades and introduced yellows, reds and greens, colours that were in sync with those expected to steward the new India.
“The opportunity identified – it was the India of mid-nineties- liberalization was a reality, economy was growing and mobile phones had just happened. This coupled with smart and fashionable products and crisp communication contributed to the success of this initiative,” says COO Allen Solly & Louis Philippe, Sooraj Bhat.
Friday Is Every Day: A success that can be traced to the company’s eagerness to make one look glamorous in a place which had for too long represented all things sober. Even today, and decades later, ‘Friday Dressing’ continues to be the cornerstone of the brand, inspiring it to evolve endlessly in its quest to marry fashion with function. ‘Friday Dressing’ has graduated beyond its permissible weekend wear to open up new styles that dominate everyday wear.
Shoppers Stop: Rewarding Shoppers
There was a time in India when shopping for clothes meant, shopping for clothes. Terms like ‘brands’ and ‘fashion’ did not even feature in the local lexicon and the stores one shopped in were usually local proprietor-owned spaces that crammed a limited selection in a few hundred square feet. So when Shoppers Stop first opened its doors in the early 90s, it opened a mesmerising new ‘multi-brand’ experience for the Indian customer. This multi-storied extravagance – that was only gawked at in glitzy international soap operas the recently introduced satellite television teased viewers with – was now a real-life experience.
Incentivising Indulgence: Yet, unknown to the shoppers, this newfound experience was soon to turn into an indulgence. Shoppers Stop’s virtue of always ‘putting the customer first’ enabled it to pioneer a reward-based loyalty program called ‘Shoppers Stop First Citizen’ – the first ever of its kind in the country. The program had 3 tiers – Golden Glow, Silver Edge and Classic Moments. Members earned reward points on purchases made in the store as well as enjoyed exclusive benefits and privileges such as access to dedicated lounges, free parking, exclusive sale previews, promotions and more. Pampering was at its peak and across all 3 tiers. Which is why, even when the program levied an enrolment fee (the only program to do so), customers accepted it without a whine.
The cost did not even compare with the returns they were being showered with. On the contrary, it catalysed their involvement and engagement which helped the company keep the program that much more unique and productive.
Tech Support: The First Citizen program was a natural progression of Shoppers Stop’s customer-centric approach and a definitive need for building a customer database program that would allow them to engage and communicate with the catchment, and leverage its rapidly increasing consumption power. But, their true saviour has been a superior data analytics engine that helps them reap rich insights. Such is the power of this machine that it is able to record each and every transaction right down to an SKU level, which helps Shoppers Stop understand the exact items in the shopping basket each time a customer shops.
“One of the biggest reasons for our success is that we are able to leverage our Loyalty Program data to create a ‘data analytics engine’ that provides insights aimed at creating incremental value to our customers as well as to the business”, says Customer Care Associate & Managing Director, Shoppers Stop Ltd., Govind Shrikhande.
“We have created a dedicated Analytics team that is tasked with the responsibility to analyse the proprietary First Citizen data and share insights with various departments. These insights (branded internally as “First Insight”) are then used to create relevant offers and targeted communication aimed at providing incremental value to customers and incremental turnover to the business,” he adds.
Since the program’s inception in 1994, Shoppers Stop has a repository of over 22 years of purchase data. This is used to generate key insights with a clear objective of improving customer experience and monetizing business.
These insights translate into relevant offers and targeted communications aimed at providing incremental value to customers and incremental turnover to the business.
In FY 15, The Loyalty & Analytics initiative has contributed to incremental sales of `115 crores through targeted initiatives and communication.
Significant learnings: • Customers shop differently and need to be engaged with and rewarded differently – therefore a tiered program with differential offerings.
- While engaging the customer on a transactional level, it is equally important to focus on the service aspect. Long term association is hinged on service delivery.
- Actively engage with the customers to understand what they want, what they buy and what they desire – this is what drives what’s on the shelves.
Today, with a growing base of over 4 million members contributing to over 70 per cent to sales annually, the Shoppers Stop First Citizen loyalty program is unarguably one of the biggest and most successful programs in this category.
INTERNATIONAL
Black Friday Sale: Breaking Traditions, Increasing Sales
As ominous as the nomenclature may sound, the very event probably holds a significance that can only be rivalled by something as supreme as a major national festival. Inspired by the spearhead that began in the US on the day after Thanksgiving and is now held the world over, the ‘Black Friday Sale’ is driving the sales of e-commerce giants like Amazon, Snapdeal and Flipkart and upgrading their consumers’ lifestyles with discounts that are almost 80 per cent of the original price. In fact, the ‘Black Friday Sale’ has been recorded as the busiest shopping day in the country in the U.S.
Following are some interesting points regarding the Black Friday Sale 2015 in the US:
- While brick-n-mortar sales showed a decline, the online sales increased with site traffic up by an average of 20 per cent on the Black Friday weekend over regular days.
- According to data from Custora, 36.1 per cent of online sales on Black Friday were placed via smartphones and tablets, compared with 30.3 per cent a year ago.
While the event still manages to garner enough excitement to warrant most people taking a day off from work, sales of ‘Black Friday’ 2015 dropped by roughly $1 billion. The reason for this could be attributed to the fact that retailers have now smartened up to their customers’ needs and are extending discounts for longer durations. This is eliminating the first-come-first-serve trend which compelled shoppers to queue up outside the store from the previous night.
To sum up, each of the above organizations attributes their success to the following factors:
Customer – centricity: Each idea was born out of meeting unmet customer needs. Behavioural change was possible as an emotional bond was established with customers who felt that someone was genuinely listening to them and addressing their needs and concerns. This won over their hearts and their loyalty.
Innovativeness: Each of the ideas have become benchmarks as they broke away from traditional thinking and addressed consumers’ needs using innovative yet relevant solutions. While today, loyalty programs are par for the course in almost all businesses, recognizing customers and building relationships more than 4 decades ago was a revolutionary idea.
Consistency: The ideas have been consistently delivering over the years, resulting in becoming the benchmarks not just in retail, but across service industries as well.
Willingness to learn and improve: Embracing and admitting to their mistakes in the early stages allowed for timely course correction which furthered their efforts in retaining or regaining their customers’ trust.
AUTHORED BY: Sheetal Choksi & Sharmila Cirvante
