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Analysis: Floor Your Customer!
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Modern stores tend to activate the catchment areas by building consumer awareness, periodically announcing offers and selling loyalty programmes. So, while marketing has brought the customers across the door, has service kept them there? This question has to be answered, more so in the retail sector where a consumer is predisposed to making some purchase as he walks into a store.
"Customer delight" is the mantra that starts with senior management and the whole strategy is built around this objective. Win over the customer and the rest will be taken care of.
So, while businesses invest a lot in setting up a store — racks, lux levels, aisle spaces, colour, branding , customer navigation, etc — they lose out on personal customer encounter, which matters the most. Tara represents the new age consumer who is aware, conscious and demanding. Her journey of decision-taking started with evaluation of the store infrastructure, look and feel, walking in with a set of known brands (Nim and Bird), adding Spix to the set during evaluation, and ended with a rejection of any purchase from the store. It was a good opportunity for the store to win over a brand-loyal customer. But it lost a customer which, in turn, can lead to a lot of negative publicity for the store. More importantly, no analytics will throw up this data unless there is a strong documented feedback mechanism. So, with no insights into Tara's episode, the store continues to build on its weaknesses.
The success of retail is manifested in small details. So, while we do intricate detailing of the store elements, to get detail as part of store DNA in execution is paramount. Bad signage at the entry should have been noticed by store staff or the security and not the customer. Any distraction gets registered in the shopper's subconscious and affects her purchasing decisions. If this is not done, detail will always be sidestepped and the store will remain busy answering quantitative data on conversions, bill cuts and bill averages.
Move to Plimm. The look and feel is compromised, but there is a long-standing equity with customers; there is a goodwill that drives footfalls. Once in, the customer has a range available. Clearly, the store demonstrates the ability to form an emotional connect with the consumer, which is at the core of customer shopping experience. More importantly, it is able to give confidence to the shopper, reaffirming her faith in the purchase of a trustworthy brand.
So, what differentiated the stores. At Plimm, one predominant factor is the understanding of the customer. Other factors include ownership- driven approach, willingness to positively influence the shopper's purchase decision, rich knowledge of merchandise. At Plimm, Spix did not fail Tara. KGL, however, did not make any effort to understand why Tara did not make any purchase.
In any retail business you can usually identify the owner or a good manager just by observation. They notice more because they have a greater financial stake. An owner-driven approach brings in efficiencies in processes, and a higher level of customer interaction. A customer is ever comfortable with a quiet, unsaid assurance of dependability. In the absence of this connect, all other frills remain just that — frills, and do not aid a purchase decision. Big retailers should also seriously invest in knowing their customers. Unlike in the developed countries, the customer in India cannot be bracketed into a single entity and it is important to identify and define your ever-changing customer.
In retail, all the flaws get noticed immediately when you walk through the store's door. In this case, at KGL, the security guard was busy over the phone, no one asked the right questions to discover the customer's needs, no one smiled, and the staff's knowledge of the merchandise was low. All these issues glare at the customer immediately and affect her decisions. Training and ability to retain talent, therefore, becomes extremely critical. It is true that serious manpower shortages today impact the execution.
The Indian consumer has grown up with neighbourhood stores where shopowners share strong personal relationships with customers. One needs to bring in new world modernisation in the look and feel without losing that old-world connect with customers.
This combination can lead to a satisfying customer experience and can lead us to the holy grail of "Customer delight".
Murali Krishnan is CEO of Nilgiris Dairy Farm Pvt Ltd
(This story was published in Businessworld Issue Dated 30-01-2012)