CX – the only tool to retain customers

It’s all about how customers are treated – the eternal philosophy of modern retailing. 

During the recent shopping spree ahead of Deepavali 2024, I witnessed this first hand and could only comfort myself that more than the 4 Ps of Marketing (or 5, or 6 as the list gets elongated from time to time), it is the Customer Experience offered at the retail store that can entice shoppers to spend more. And later, speak about the positive experience to others and further drive themselves as well as more people to the brand / store.

Actually, we had four such instances over the last fortnight – one where we felt a bit cheated by the brand due to the overtures of the staff who were thinking they were doing good to the brand by saving the discounts we deserved. And another, where the staff overwhelmed us with known and unknown promotions that led us to buy more.

Let me start with the positive one first.

My wife and I decided to spend a couple of hours together (no, not the typical husband-wife “me time” without the kids tagging along), rather to explore the Phoenix Mall to see what could suit our needs and budget. Frankly, we went without an agenda (a rarity for your’s truly).

We started exploring at the Fab-India store which was for a change, absolutely empty (it was 11.30am). I tried a kurta first and the girl staff was keen to showcase more designs to me. Within the next few minutes, I had picked up a handful of clothing, once again a rare thing for me, as I prefer to buy clothes from across various brands.

Then, we visited a few other stores until my wife suggested we enter and explore “Avantra” by Reliance Retail. It was my first to the brand store and I was mighty impressed with their assortment. Not that I am a regular buying stuff for my wife, but with a little knowledge of how sarees are displayed and sold, I was quite surprised that the brand had gotten everything right. 

Almost.

The lady staff was quite enthusiastic to showcase the collection to my wife and to her surprise, the product and pricing was just apt. Add to that, a dash of friendly support by the store staff that we ended up buying a lot more from the store, way above our budget. We still decided to bill what we had picked up, to ensure the staff who served us were happy. And the staff offered us a surprise by giving us Gold coins weighing 0.25 gms - 3 units for our shopping! Whoa. 

Passing by aisles of the mall, I quickly entered the “Home Centre” store to pick up a few coffee mugs to sip my filter coffee on Deepavali day. Now, this is the kind of store where customers “indulge” in shopping therapy, especially picking up a number of discretionary items, buoyed by impulse and a push by the staff. 

Alas, we were not so lucky to be prodded by any such staff. Honestly, we found none until we reached the Cashier, who was busy explaining the “Exchange Policy” to another shopper who had come to replace a few things he had picked up earlier.

The most disappointing experience was when we landed up at a women’s fashion apparel store 2 weeks back, (I choose not to mention the name and admonish them here) where my daughter discovered a fabulous collection that suited her needs. She had almost given up on her Deepavali shopping not being able to find what she wanted, having explored over half a dozen small boutique stores as well as 3 department stores earlier in the day at another mall.

What makes a dad happy is when the kid is happy. And happy I was, to pay for more than what we had planned to buy. At the time of billing, I got a message from the brand on my Whatsapp that we are entitled to Rs. 500 off on our next purchase. So, we decided to hold one dress to be billed the next day, as our total bill was a healthy 5-digit figure already. However, the staff wasn’t too happy that we were trying to save some money. She sulked when I informed her that we would bill the item the next day. 

When my wife went the next day to bill the product, the same staff displayed a fuss, that a discount code was required to ensure she was able to deduct it from the bill. Just that we had not received any such code from the Brand. After all, the code gets generated only when they trigger it, which she clearly did not. 

We were anyway going to buy the dress, so my wife decided to proceed without the much desired discount. She did make a mention to the staff, that her husband was part of the retail industry for decades, right after which the staff decided to trigger the code. 

Bingo! I received the code on my Whatsapp and I passed it on immediately to my wife, and then to the staff. Billing was over, product picked up. But my wife wasn’t appreciative of the entire experience.

As the store was just 2 kms from our home, we had discussed the previous day that we shall come here more often, as my kid liked their collection. But the bitter experience made us think twice, if this is where we would spend our hard earned dime.

Through the retail network, I tried to reach out to the brand owner, a second-generation entrepreneur from the city. The gentleman was rather unapologetic to my wife when he called her. Instead of saying “sorry” for the poor experience, he insisted that the brand will reimburse another Rs. 500 to our account which we can reimburse during our next buy.

Sorry, but we were not harping for the discount for which we escalated the matter to the owner. The young man, with limited experience in retail, perhaps, wasn’t able to understand our dismay and rather focussed on the monies. We earn, spend, loose sometimes and the cycle is repeated. But the way the entrepreneur justified the entire episode on a professional Whatsapp group in front of 200 others, was rather in poor taste. His explanation as well did not include the word “sorry”.

This is what happens when business owners presume that Pricing (and Discounts) are the only reason consumers attach themselves with brands. Not sure, whether he understood the magnitude of the issue on hand, but I did. And I decided, that I will ensure such a poor customer experience is never accorded to anyone in such cases where I am involved.

The bitter experience however did not deter our Deepavali celebrations. We had a great time as well as enjoyed when the kid wore the dress from that particular store, as much as we did, when family members wore clothing from Fab-India and Avantra.

Here’s to more celebrations and much better Customer Experiences.

Customers Expectations & Managing Impatience

The Ola App says your driver will arrive in 3 mins. It’s already 4.26 mins and you are irked.

The Swiggy App says your food is on the way and shall reach at say, 8.05 pm. It’s already 8.08pm and you are calling the driver frantically to figure out where your food is.

You spent one hour taking trials of 17 dresses and finally picked up 3 at the Department store in the fanciest Mall in town and have been impatiently waiting at the billing queue for over 10 mins. During a “sale” season, the wait time trebles and a few customers are already dropping their shopping bags.

Are you still staring at the guy getting his hair-cut for the past 20 mins and wondering why would the stylist take so much time to complete the "job"?

Sounds familiar? Well, you are not alone. An article in Nautilus has an easy explanation: “Slow things drive us crazy because the fast pace of society has warped our sense of timing.” Does it mean humans first experienced impatience when life became fast-paced sometime in the 19th century? No, nature gave us impatience as a useful instinct. In fact, animals also show impatience. “It’s an internal timer that tells us when we have waited too long for something,” says the article. A webpage took 4 seconds to load in 2006, 2 seconds four years back and 0.25 seconds today. We are still impatient until it loads. How true!

The iconic Sambhar at Ratna Café, a popular restaurant in Chennai which is over 6 decades’ old takes a few hours to be prepared every morning to get that consistency and a lasting taste. The iconic Lassi from Punjab is stirred for hours together while the Tanjore Spice powders and Chettinad Pickles take days to be prepared. Although I am a pure vegetarian when it comes to food, I have heard how it takes 10-12 hours to prepare the Hyderabadi Haleem dish. Remember, an egg has to spend 270 days inside a womb to be given birth as a human baby. Good things take time. Great things take eternity.

So why do humans get upset upon small delays? Why do we forget that unforeseen and unnatural delays are normal? And even if someone is actually late, why fuss so much? If the delivery boy turns up later than proposed, what would actually happen if the customer waits a few more minutes? If the Cashier at the till is slow in his/her work (probably a beginner), why cannot we wait a few more minutes and encourage them, rather than chide & complain?

I am not a psychologist, so I wouldn’t be able to answer many of those questions. But I can probably say how Retailers and Customers are handling this or perhaps supposed to. With so much of tech taking over our PoS billing solutions, why wouldn’t Department stores and Hypermarkets invest on small benches for customers to sit near the check-out areas, quite similar to Hotels? Even the smallest Lodge in town has a seating area near the Cashier while Star hotels have experience centers such as an Aquarium. This, in my opinion is the most important reason why Customers shrug the Trolley and prefer the Mobile Apps for shopping. It’s the impatience of standing in Q that drives customers to choose one over the other. While it is clichéd to say Men are bored at Department stores while their wives or girlfriends are shopping, I am yet to see (In India) a store which has a seating area or Foosball tables for men to hang around, let around a café or a bar. I don’t know of a shopping centre which has an affordable play area or Crèches, save for the one off “Fun City” outlets which end up being more expensive to hang around for an hour or so than actually shopping & dining together. 

In services businesses like a Salon or a Restaurant, chances are lower to replace the physical presence. While the Food hailing Apps can deliver even the most exquisite delicacy in town all the way to your private dining area at home, the “Dining Experience” is something that cannot be replaced. However, Restaurants take way longer time to prepare, serve the food and send the bill than it is supposed to, thus making Customers lose their cool and get impatient while leaving, although after a sumptuous and a happy meal. Sadly, most Restaurant owners and Customers fail to understand the difference between a find-dine and casual dine restaurant, forget what is a Quick Service Restaurant. 

Ultimately, impatience begins when expectations are mismanaged. So, Hello Retailers – set your business expectations right to your patrons – like a simple placard on the dining table (or even on the Menu card itself) which states the estimated time for serving the food; or like at Airports, where you estimate the waiting time for Security Check or walking time to reach the Boarding Gate.

Setting the right expectations can turn the experience to be much better. In Retail or in our personal lives. Isn't it?

Does Loyalty still exist?

I was speaking on a Panel Discussion last week at a conference hosted by Asia Retail Congress at Mumbai with some fantastic speakers from the Indian Retail Ecosystem, where the topic for us was to discuss Customer Loyalty. While preparing the points to ponder, I was wondering whether Loyalty still exists in today’s context. Well, yes – it sounds crazy if I say there is no Loyalty in the consumer business today. Don’t believe me? Take a look.

The toothpaste and toothbrush – look how consumers get swayed by newer options and attractive advertisements? There was a joke that a dentist/compounder who would appear in such an ad for toothpaste was once seen wearing a stethoscope! The body wash/soap – the options we see at supermarkets. The clothes we wear – this one’s interesting. Let me ask you, is the dress you are wearing right now – was it the same brand that you purchased most recently? If yes, you are part of a small minority of consumers who are still brand loyal. The so-called disruption by new-age startups who thundered the e-commerce world a decade back and continue to bleed in billions – do consumers have any loyalty still left over? Again, consumers prefer to buy from trusted websites (is Trust=Loyalty? Later, on that) where they could probably have the option of returning faulty goods sold by unscrupulous vendors on whom the Amazons & the Flipkarts don’t have much command. A Big Billion Day or an interesting Sale period – and consumers swing their loyalty there.

Let’s look at a few touchy, personal products. Let me start with Gillette which I have personally been using for the past 2 decades. I started with a Presto plastic shaving razor worth Rs. 10 twenty years back. I am now using the “Mach 3 Advanced” which is some Rs. 350+ per razor! And while the Advertisement claims a 30-day use, it still warrants “Conditions Apply” such as the skin tone, number of times repeating the shave and hard water. For me, this is one classic case of Customer Loyalty where consumers have continued to stick on with the Brand and its extensions such as Shaving Gel, After Shave, Body Wash & so on. Let’s look at Sanitary Napkins. Women I know (and I don’t discuss this with many!) use a particular brand/model – purely because of operational comfort. Interestingly, Brands which come in with alternatives offer sample packs or ones with fewer pads, so consumers can perhaps try and decide. Still, the loyalty is extreme. Women continue to stick to their favourites.

Look at Café Coffee Day. With 1,500 cafes across India over 2 decades, the brand continues to drive at least one lakh consumers every day and sells over 50,000 cappuccinos daily! Cut to competition – the nearest café chain Starbucks has just over 100 cafes pan-India although the argument is that their daily turnover per café is 3x of CCD. Indeed, their food prices are 3x of that of what we get at CCD and their beverages, at least 2x. So, that explains.

Royal Enfield was an underdog seven years back, selling 1 lakh vehicles per annum. Now, they sell almost 1 lakh units per month. Today, RE sells more motorcycles worldwide than all other premium brands put together – some feat this.

So, does Loyalty exist? I have a hung verdict here t least for now. The house is definitely split over this issue. For certain products and categories, consumers show extreme loyalty while for some, there hardly exists any loyalty. Travel, Food, even Luxury – take your pick. Look through the lens and you’ll see how fragmented the so-called Customer Loyalty is. And Loyalty Cards – well, I shall write a follow-up column on this shortly.

GST at Cinema Theatres

GST is the most searched term, perhaps in the past 30 days or so. India transitioned to GST on the midnight of 1^st July 2017 with a special session of the Parliament, which was attended by the Prime Minister and his Cabinet including members of the Opposition. Much has been spoken about GST so I am not going to delve in any further. But I am presenting my views on how GST in Tamil Film Industry is affecting the trade.

In Tamil Nadu, there was no VAT on cinema tickets prior to GST. However, there was an Entertainment Tax @ 30% on the ticket prices. The DMK Government, when they claimed power in 2001 provided a reprieve to the Tamil cinema Industry for the said Entertainment Tax if the film had a title in Tamil and was provided a U Certificate among a few other clauses. That’s when Sun Pictures was floated (a division of Sun Media Network which runs Sun Tv & 45+ channels in four regional languages). The reprieve was used by most Producers with fancy Tamil titles including the all time highest grosser of Superstar Rajnikanth whose film directed by Shankar was titled “Enthiran” meaning Robot in Tamil.

The ticket prices in Tamil Nadu have been capped at Rs. 120 for Multiplex screens and Rs. 100 for standalone Theatres. The 120-cap was inclusive of 30% ET, which means the actual earning to the Theatre Operator was only Rs. 84. However, due to the largesse by the successive Governments, the theatres were able to earn extra – the ET collection was not passed on to the Customers, rather pocketed in to their kitties – obviously because the Producers knew they could hard bargain with the Exhibitors for a higher Minimum Guarantee & higher Revenue Share as well. This vicious cycle has been going on for a while with 9 out of 10 cinemagoers unaware of the same.

On June 30^th 2017, the TN Government passed a mandate where the local body tax was applicable at 30%, which was over and above the GST. Cinema Exhibitors got in to a huddle on the 1^st of July and decided to protest the TN Government’s decision and shut down the screens for four days from 3^rd – 6^th July 2017 incurring a loss of over Rs. 400 crores to the Industry. TN Government decided to put the levy on hold and allowed the Theatres to operate as per old norms.

Now here is the catch; GST had just replaced the Entertainment Tax and was 2% lower. Which means, the ticket prices should have gone down or remained as they were. But the smart industry guys have played their cards well by adding 28% GST on to the Maximum Ticket Price of Rs. 120 which is against the spirit of GST implementation. Interestingly, neither the Central nor State Government have taken cognizance of this issue and cinema goers have been forced to shell out more from their pockets. With the already sky-high costs of Pepsi, Coke, Popcorn and other Food & Beverages inside the theatres, regular visitors have been dissuaded leading to a 30% drop in tickets sold. If this trend continues, more footfalls will reduce and would have a deep impact on the film exhibition industry. A few star-studded movies are in the pipeline, which will decide if this move by Cinemas to pass on the GST to customers will have a significant impact. With burgeoning OTT Apps & ever increasing movies screened illegally on websites, the fate of the film industry is facing a Damocles Sword.