Tuesday, July 12, 2011

Indian Retail Story : Loyalty on Sale

Shopping malls in India are mushrooming virtually at every corner.The other cities are also not very far in the race. Each shopping mall has one or the other Retail store to the likes of Big bazaar, Reliance retail, More for you, Spencer's, Dmart and others. Everybody is offering discounts on literally everything to get more and more customers drawn to the store. I am also one of the many customers mesmerized by this magic of discounts. But I always had a fear of this business model falling. Offering discount is like making the tiger taste human blood. It will not like anything but human blood than. My fear came true when I read this new article about closure of More Stores in Gujarat. Check this article.
LoyaltyonSale
Discounts are not bad but if they are not bundled with other innovative offers like I feel Big bazaar has, they can be disastrous. No business can run on a USP of cheaper price or discounted price.
And not only for the Business house offering the discounts but for the entire industry. A similar example is the price-war in the Telecom sector. One Telco slashes the tariff and everybody else has to follow or lose the customer.
All in all, blind discounts are putting the customer loyalty for sale.