Retailers are on a constant lookout for newer and better ways to attract potential customers, to increase their existing footfalls and to convert visitors into customers. But, do retailers realise what encompasses the customer’s shopping expectations? What motivates them to prefer one store over another? And what influences their decision at the time of purchase? Is it value for money or in-store experience?
Retailers, in a bid to drive in more footfalls and ensure consumer loyalty, generally focus on in-store experience, especially if the target customer belongs to A or A+ category in terms of socio-economic classification (SEC).
No doubt, in-store experience plays an important role in satisfying the discerning shopper, but value for money cannot be ignored.
In a poll question, “Is the consumer more receptive to value-for-money deals than in-store experience”, asked by IndiaRetailing, 78.95 per cent of the respondents supported value for money, while just 7.37 per cent vouched for in-store experience; the remaining 13.68 per cent preferred to stay neutral.
BVK Raju, director, Q-mart Retail Ltd, firmly believes it’s in-store experience that plays a more significant role than value-for-money deals. “Price proposition plays a role to some extent, but in totality it is the experience that drives the customer. Customer aspirations evolve continuously and so do their expectations. Once the focus is only on value, retaining customer loyalty becomes a big challenge. Retailers must, therefore, focus more on retail experience, rather than on price, to competitively differentiate themselves.”
Raju further emphasises, “If the shopping experience is pleasant and enjoyable, the customer will come back, irrespective of any deals… the total shopping experience is what will drive the business in the long run.”
Siddharthan Sundaram, director, retailer services, The Nielsen Company, however, does not agree with Raju. “During the economic slowdown in 2008-09, consumers were looking for offers and promotions and the expectation continues even today. As a result, retailers have been announcing new promos/schemes regularly to attract more footfalls and have started focusing on introducing store brands at a lower price (than the established brands). The in-store experience may play a role if the store is new and big, but that is not consistent,” he reasons.
Commenting on the poll question, Esha Anand, head – marketing and visual merchandising, Hypercity Retail (India) Pvt Ltd, says, “It depends on the customer segment you are targeting. SEC A, B customers are more experimentative, cosmopolitan and progressive. They have aspirations for a better lifestyle. Increasing exposure to international trends and lifestyle, coupled with rising levels of affluence, has fuelled the desire to move up the social ladder."
Vishnu Vardhan, head operations, Ruci & Idoni, agrees. “It depends on who we are targeting – customers belonging to A and A+ categories don’t just shop, they want to enjoy shopping; when they go to the market, they look for a comfortable, hassle-free place to enjoy shopping.”
Stressing that there are many customers who put value first and are limited by the extent to which they can spend, Dev Amritesh, senior vice-president, marketing, Domino’s Pizza India, says, “We must recognise that in some occasions, categories and in certain mood states, customers attach a lot of premium to experience. The trick is to know what these occasions, categories and mood states are, in order to exploit them.”
So, clearly, as experts point out, one doesn’t take precedence over the other. Not all customers are value conscious; some of them are willing to spend more in order to get hygiene, good customer service, or simply a favourable in-store experience. Both, therefore, have their roles to play, and which one to focus on depends solely on the targeted customer segment.