India Retail Story: Analysing Innovation
The geographies, the sectors, the services, the business models could vary from business to business, but one thing is common for every business and that is the Customer Loyalty. There are obvious reasons for having Loyal customers. The cost of acquiring new customer is more, the loyal customers does marketing of the business through the most effective way of marketing called "Word of Mouth".
There are various means and methods devised by business to gain customer loyalty. Offering discounts is a very basic and very common method employed and I feel actually this is the trick which at times kills the business and blogged in this article of this Indian Retail Story series.
India is on the radar of every business and one of the hottest sector is the Retail business. The walk-in of customers into stores is growing, the competition is growing and so are the methods and techniques to gain new customers and to convert them into loyal customers.
Apart from the typical way of offering discounts, businesses came up with the concept of reward points to gain loyalty. Its quite an innovative idea. Right from credit card to mobile service providers, from banks to retail stores everybody is offering some or other way of earning reward points. As analysed in Life Span of Innovation, everybody deployed this technique and so it was no longer the thing which made the customer to be loyal.
Then comes a breather from this most successful retailer of India. Its the Future Group led by Kishore Biyani.
Future Group has always been innovative in extracting that extra buck from customers pocket through its various business models like BigBazaar, Pantaloons, Brand Factory etc.
The latest ( not really, its there for quite sometime now) is the Reward program in the form of Mobile Usage. Future Group has tied up with the Telco TataDoCoMo to offer Mobile Services known as T24. Customers get free talk time based on the purchase made at various outlets like Bigbazaar, Pantaloons, Ezone, HomeTown, Brand Factory.
Isn't it an awesome innovative idea to make customers loyal, to generate that stickiness. Others offer reward points that can be redeemed for gifts which are generally not essential to customer and here Future group offer reward points for something which nobody in a booming telecom market like India can live without i.e Mobile Usage.
A customer is for sure bound to make purchases from the participating stores whenever possible so as to accumulate more talk time. Moreover, there would be quite a few customers who would go for paid recharge( apart from the free talk time). This will generate extra revenue for the Retailer. Future group expects to generate quite a considerable revenue from this Mobile services as stated in this article.
That’s what I call is innovation. Doesn’t this testify the saying that Innovation doesn’t mean doing different things, it simply means doing things differently. Isn't it sync with the old India Saying “Aam ke aam gutlio ke daam” which means Reaping double benefits. In this case, customer loyalty and extra bucks .