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How well do we know our customers?

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Having a good understanding of customers can help both retailers and brands to increase their sales exponentially. The more they know about customers and their needs, the easier it is to identify opportunities to sell them new products and customise new offers to suit their requirements. This article defines the new-age consumer and how companies are bending ways to create differential shopping experiences.

Brands are no longer defined by their market share and growth, but rather by what their customers think. Brands and retailers alike are struggling with the changing dynamics of the newly emerged customer, who is socially active, mobile, internet savvy, agile and is constantly looking to replace their wardrobes with something new and unique. The changing mind-set of the digital generation is also radically shifting people’s attitude towards shopping. The generations are converging: the older groups are opting for more youthful and carefree lifestyles while the younger lot is becoming less rebellious and more career-oriented. The sales department, which has been following the typical sales cycle approach to close sale by aligning every aspect of sales, marketing and the whole of organisation around the customer, has been toying with innovative ideas to build a bond with this new-age customer. Today’s consumer knows what they want and can easily find where to get it. They have access to information at the click of a button and are mindful of price. They are no more averse to discussing with strangers the merits of a product or service online and they are not even afraid to criticize what is not good and of value. Competition is high and expectations even higher.

Knowing the customer

If a customer prefers delivery of fresh roses before noon, florist ensures that they get so at their preferred time. “The mobile evolution has changed the way the consumers shop and communicate today. The millennial population likes to converse with their brands on-the-go and get latest offers and updates customised to their interest,” says Manish Mandhana, MD, Mandhana Industries. Social media has enabled a dialogue between the customer and the brand, which is a two-way communication rather than a monologue. Today’s consumer is well travelled and observing the evolution of retail internationally; the demand by them in India has also evolved with greater expectations. Although consumer preferences have changed with time, they still buy products high on value. Newer technologies have come up that create opportunities to provide superior value propositions. “For instance, customers who care more about the environment would see higher value in ‘green’ products. Knowing this companies attempt to make environment-friendly products and innovate through biodegradable packaging, colour, shape, marketing channels, etc. so as to make them more attractive to their customer base. On the other side, customers who have little to do with environmental concerns would not purchase green products if the competitive offerings provide the same other benefits and are cheaper,” says Siddharth Singh, Director, Fellow Programme in Management, Associate Professor of Marketing, Indian School of Business. “The new-age Indian consumer is clear about their priorities. Not only are they conscious about the global fashion and wish to be part of it with a difference but they also want to have some identity,” says , designer.

“Our target customer is getting trendier and younger. Everyone is looking for a good bargain and for some a good bargain equals quick returns. Indian consumers will not compromise on their values and institution,” says , MD – Consumer Goods Business, Swarovski India. Swarovski has identified a radical change of mind set in relation to lifestyle choices. Women look for slightly understated yet elegant selections to complement their corporate- or casualwear. There has been a gradual shift from the traditional jewellery options in gold and silver to more contemporary choices such as platinum and crystal. “An urbane homemaker, in the age group of 26–45 years, who is tech-savvy, well-informed, and has a taste for good living is our average visitor,” says , CEO & Co-Founder, .com. Jaideep Gupta, VP – Operations, Ka Hospitality Pvt. Ltd. discovers at his haven for Chinese food, Hakkasan & Yauatcha Restaurant, that “the new age consumer has a well-experimented palate. He is well-travelled, has wide exposure of international cuisine and has the luxury of disposable income”. “At , there are more visitors from tier-II and -III towns, thus pushing us to keep more regional and locally accepted brands to cater to their needs. Where at one side they want to look fashionable but price and value are the major buying considerations,” says , Co-Founder of ShopClues.com.

It is important here to understand what consumers think about the retailer or the brand and their products and services. For instance, retailers must strive to understand what they like and dislike and why they choose to shop from a particular brand. In the last two months, Fabfurnish has added close to 12,000 new products and has also removed a few thousands from the collection. “Keeping abreast with the latest designs and technology coaxes our consumers to come back to us. We have identified niches that are not easily available offline. Recliners, collapsible furniture, and bake ware, to name a few, sell like hot cakes,” says Chopra. He further believes: “A product is the most important thing to retain the customer as it establishes quality. Marketing may attract a lot of consumers but if the assortment is not right, they may not convert and make a return visit to the store.”

Profiling niche customers

‘Who are they, what they think, believe and buy, what interests them, what are their purchasing behaviour like’ – these are some of the pertinent questions retailers need to address. And hence profiling existing customers is gaining ground now. If a brand is selling shoes, it is probably redundant to ask customers about their dress size and colour preference. What is becoming important today is to get the right piece of information whether it is the customer’s age, the type of work they do, male or female, shopping days and time, purpose and so on. It would also hold relevance to personalise the information and offer promotions based on who they are. Brands are looking for similar prospects, in order to sell to them in a similar way. At HyperCITY, we have a lot of target campaigns that we do, considering the buying trends of customers, through our loyalty programme. Specialised sections are being dedicated to different age groups at the store like the toys section, fitness section, fashion segment for kids, women and men, food and stationery. Thanks to proliferation of online shopping, the new age customer is more evolved and aware of the range of products available in the market today. They are more price conscious than ever before as they have the power to compare prices now,” says Darshana Shah, Senior VP – Marketing and Visual Merchandising, India. “New categories which are not easily available offline are being introduced by us. Name it and we have it – recliners, collapsible storage, bake ware, et al. – an array of more than 60,000+ stylish home products across a varied price range gratifies every customer’s individual needs,” says Chopra. “Vegetarianism is another phenomenon that has come of age, and at Yauatcha we see a lot of guests who prefer modern yet vegetarian options. Keeping up with the times, we have created a special vegetarian preference menu that helps our vegetarian guests to make easy and quick choices,” adds Gupta. Even the fashion consumer is willing to spend more on clothing and accessories of choice; the consciousness of value received for the money spent has increased manifold. The consumer is inclined towards value and affordability more than ever now, but, at the same time, there is an inherent need for a fashionable look. “The new age consumer is also deeply interested in revival and wearing authentic aesthetic classics,” says Kumar. She believes: “They do not want this to come as a short-cut, so as a brand all our research and aspirational indigenous techniques in  clothing have to be well executed, both with responsibility to the environment and to the vast craft textile resource of our company.” Sharing his view , CEO & Director of The American Swan, commented: “In the area of fashion, we are seeing a lot of wearable tech that is gaining in popularity. Latest research findings have indicated that globally a whopping 71 per cent of 16- to 24-year-olds want ‘wearable tech’. This includes devices, tech togs, fashion electronics: clothing and accessories incorporating computer and advanced electronic technologies. Google glasses, biometric smartwear, interactive T-shirts, Bluetooth gloves, etc. are the products we should soon be seeing in India as well.”

According to Shah: “We are witnessing a surge in demand for private labels. Hence, we are coming up with new brands and focusing on marketing activities to increase sales of these brands. Our latest brands – Masala Chai and Iktara – are targeted at the young women.”

To quote Singh: “The availability of newer channels of distribution, such as the experimentation with drones by Amazon, have created newer opportunities for the company and more for consumers to delve into, but at the crux customers still purchase the option that offers superior value. Note that value is created through the marketing mix that includes the product as one component. There are others such as the distribution channel and price.” On the other hand, Nishant Banthia, strategy consultant with a media group, feels: “If you are selling niche products and your aim is to build sales as quickly as possible, while you might be having cash flow problems, then you might value customers who pay quickly and without negotiations.” Here it becomes mandatory for companies to identify their most profitable customers – may be those who buy high-margin products, those who pay full price without negotiating for discounts, those who place a small number of large orders rather than many small orders, and those who pay on time and do not demand extra service.

Capturing customer shopping behaviour data

Other than CRM data, companies are also experimenting with behaviour data within the store to understand how they can better address the needs of the customer and better organise the stores. “On ground in the store, online, radio, newspapers, in-store radios, and loyalty programmes (this helps understand consumer behaviour) are the various touch-points which are interlinked to each other,” says Shah.

“We have observed a marked difference between consumption patterns of consumers in North and South India. Consumers from North India give more preference to brand value, while those from South India are more inclined towards the quality of the product. Consumers from North India prefer brighter shades while their southern counterparts generally opt for subtle and pastel shades. Hence, retail planning becomes critical to our approach. It is also important to understand the purchasing power of the customer and hence at Lacoste, customer relations are given more importance,” says, Rajesh Jain, CEO & MD, Lacoste India.

Fabfurnish.com claims to be the ONLY player that makes extensive use of technology to take customer feedbacks by sending weekly customer satisfaction surveys (NPS), through e-mailers, which is a globally accepted methodology for measuring customer satisfaction. “Our NPS scores have always been in range of 60–70, in line with the world’s best customer service organisations such as Amazon and Google,” says Chopra.

“At Lenskart.com, we have data to know each customer’s purchase in terms of quality or price of frames and types of lenses used, CL purchased and when are they due. It is followed by a feedback call for reminding and reassuring the search and purchase. There is always a scope to upgrade the customer to a better product using the previous data,” says Peyush Bansal, CEO & Founder, Lenskart.com.

Creating dialogues over multiple platforms

Long gone are the days of sales monologues. The new age customer has little time or patience to be preached to. Today, they want to talk as well as be heard.  Not only this, there have been several brands that integrate User-Generated Content (UGC) into products: be it fashion or lifestyle products that carry the message or pictures that the end consumer wishes to sport. With this digital platform brands are able to reach a global fashion audience via social media channels; giving them the advantage of proximity to their audience along with quality and instant feedback from the customers. The online phenomenon has definitely taken over the entire retail industry and this has become a roadblock to attract footfalls at retail stores. “But the vast majority of the retail business is still conducted in a physical store, so the store is a critical component and if customer experience is all about setting expectations, the shopping experience is about how these expectations are met at each point of sale in the stores,” says Singh.

“More and more companies are now focusing on omni-channel retailing where they provide a holistic customer experience at all points of sales be it online, mobile, social media or physical stores,” says Mandhana. “Today we need to understand that customer relationship can no longer be considered exclusively the domain of sales and customer service. If the accuracy of invoices, or the professionalism of the store staff or cleanliness of the store is lacking, then the relationship can suffer no matter how good the marketing or sales person is,” says Shah. “Eye tracking studies allow companies to find out where customers see first and how their eye movements happen. The findings have implications for website design and product placements within the stores,” says Singh. Mandhana feels that the millennial population likes to converse with their brands on-the-go and get latest offers and updates customised to their interests. “This is possible with new technologies, social media and on-the-go mobile data. Social media enables dialogue between the customer and the brand, which is a two-way approach rather than a monologue. Thus, brands have become more customer-centric,” he says. Chopra quips: “Customer service training is provided to all our employees from time to time, as it is an important tool to create dialogues.” Additionally, he says: “It is important that an employee understands a customers’ needs and expectations in order to be able to satisfy them.”

“At Yauatcha, we create dialogues with our customers over socially accepted products as well. Keeping the changing social preferences in mind, we have introduced the all vegetarian  or Jain menu, which includes eggless desserts as well. Our servers are trained in a way where they keep the guests’ needs as their first priority,” says Gupta. Every designer today is looking to create a distinguishing factor for the brand. Art, architecture and technology are all blending into jewellery designs at Swarovski to create innovative dialogues with customers. “We have introduced theme-based jewellery especially that consisting of animal motifs. From butterflies to tigers, embedded in multi-coloured stones, jewellery is experimented with all which works both in the Indian and international markets,” says Roy.

Creating personalised experiences

Today attracting, servicing and communicating with customers has become high priority. In such a competitive global marketplace, companies are trying to focus on breaking through the clutter and creating powerful content that sticks amongst the consumers. “Certainly, visitor satisfaction quotient is always the top priority for any retailer; even if the customer is a window shopper or hard-core shopaholic,” says , Creative Director, Madame. Store ambience, retail presence, store layout and hygiene are the some of the first things that a customer notices while walking into a store. Grievance handling is the most important factor that can patronise the customer forever with a brand and a lot of emphasis is given to quicker resolutions.

IKEA’s catalogue now uses augmented reality to engage with customers through the IKEA app, which unveils films, interactive experiences and photo galleries. Recently, T-shirts were developed which allow users to sync their phone to a flexible display panel on the garment. This allows people to share their photos, social updates, Facebook status, tweets, etc. More than customisation at the product level, what brands are working towards is allowing for personal preferences, especially in the e-commerce and mobile apps domains. “At American Swan as well, we work with widgets and features that recognise a repeat user and offer product recommendations based on browsing and purchase history. The sophistication that technology solutions offer is truly commendable in making the entire experience for customer’s device-agnostic and highly personalised,” says Rajpal.

A brand is remembered not just for its products but also for its customer engagement and interaction it delivers. “We were the first to bring customers the joy of crystal products to their home and office, and we have maintained this as a core focus uniformly at all Swarovski retail points,” says Roy. “Our customer satisfaction rate is 90 per cent.  We seek feedback from customers after every purchase, across products, customer service, new features and offers, and make likewise changes, whenever necessary, so as to better their shopping experience with us. We extensively engage with customers through social platforms such as Facebook, Twitter, Google+, Instagram, etc. The top management regularly conducts customer interviews, mystery shopping, and similar initiatives to identify improvement areas,” says Chopra. Bansal says at Lenskart.com, multifold initiatives are taken to deliver better shopping experience, namely simplified sales process based on providing complete information to customers and then allowing them to make a choice, 6-steps eye testing by certified optometrists, simple and transparent lens selection, frame selection process and touch screen to select other products available online as well as easy check out.

Though the retail industry in India is trying to make significant changes over the years, this change is being brought about by consumer behavior, which is impacted by various factors such as knowledge, exposure to international retail, etc. Even with the growing population, India is still likely to remain a market of small basket transactions in the coming years. The value of shopping basket in India is US$ 7 to US$ 10 as compared to developed markets in the US where it is US$ 45 to US$ 50, according to the Great Indian Bazaar report by . Though the demand over weekends and weekdays remains similar to that in developed markets but operational challenges and efficiency at the point of sale differ.

Blurbs

“Our target customer is getting trendier and younger. Everyone is looking for a good bargain and for some a good bargain equals quick returns. Indian consumers will not compromise on their values and institution,” says Sukanya Dutta Roy, MD – Consumer Goods Business, Swarovski India.

“Our customer satisfaction rate is 90 per cent.  We seek feedback from customers after every purchase, across products, customer service, new features and offers, and make likewise changes, whenever necessary, so as to better their shopping experience with us. We extensively engage with customers through social platforms such as Facebook, Twitter, Google+, Instagram, etc. The top management regularly conducts customer interviews, mystery shopping, and similar initiatives to identify improvement areas,” says Vikram Chopra, CEO & Co-Founder, Fabfurnish.com.

“At American Swan as well, we work with widgets and features that recognise a repeat user and offer product recommendations based on browsing and purchase history. The sophistication that technology solutions offer is truly commendable in making the entire experience for customer’s device-agnostic and highly personalised,” says Anurag Rajpal, CEO & Director, American Swan.

“At Lenskart.com, we have data to know each customer’s purchase in terms of quality or price of frames and types of lenses used, CL purchased and when are they due. It is followed by a feedback call for reminding and reassuring the search and purchase. There is always a scope to upgrade the customer to a better product using the previous data,” says Peyush Bansal, CEO & Founder, Lenskart.com.

“Certainly, visitor satisfaction quotient is always the top priority for any retailer; even if the customer is a window shopper or hard-core shopaholic,” says Akhil Jain, Creative Director, Madame.