It is 9am on a working day and I'm waiting outside a Mumbai department store along with an eager crowd of men, women and children. As the doors open, a wave of enthusiastic shoppers carries me inside the store. Everyone gets in on the shopping act with a gusto that leaves me (a first-timer) bewildered. Within minutes the shopping baskets are overflowing and the racks are empty.
What’s going on here? That’s easily explained. The store in question is the Westside outlet at Hughes Road, one of India’s best-loved retail chains, the shoppers are members of an exclusive loyalty programme, and the time marked the beginning of the store's much-anticipated biannual sale.
It’s a pattern repeated every time Westside releases this particular brand of shopping elixir at one its 14 stores spread across urban India. The chain’s special customers, Club West members, are the privileged lot who receive an exclusive invitation to start their shopping, on the first day of a sale, a full 90 minutes before other customers.
The rush leaves Himanshu Chakrawarti, the general manager of Trent, Westside’s parent company, pleased as punch. The Club West initiative is just one of many that the chain has nurtured to attract customers and stay ahead in the congested retail race.
The boom in the sector has been fuelled by the flood of new players, Indian and foreign, looking to cash in on rising incomes, increasing indulgence and greater frequency of purchase. But keeping customers satisfied is no cakewalk. It’s not enough anymore to be merely glitzy; stores have to have the right blend of ambience, products and, most important, customer service.
According to Mr Chakrawarti, there are four stages in retailing:
- Communication — where you attract the customer through advertising.
- Store experience — this embraces ambience, facilities, layout and products.
- Interaction — ensuring that customers receive top-quality service.
- Post-purchase experience — keeping the quality of your goods in the highest bracket.
"If you succeed on all these fronts, you have a satisfied customer, one who will evolve into a loyal customer," says Mr Chakrawarti. Over the years Westside has acquired enormous experience while developing customer relationships, and it is a continuous process of understanding their needs and desires.
The chain uses different tools to understand and build customer loyalty. Research and surveys are carried out at formal and informal levels. "Talking to customers is an integral part of our business," says Mr Chakrawarti. "You get a great feel of what the customers like and what they don’t."
It’s not just about talking; it’s also about asking the right questions. For instance, earlier a typical customer satisfaction-tracking model would have a set of standard questions with a rating choice of good, average and poor. Now Westside asks questions that give direction on important attributes that a customer desires in the store. It’s more qualitative than quantitative. A new feedback form at the store asks customers to evaluate the store. "This helps us know which store and which department is doing well. You know if there is a problem and you can then address it."
At the formal level, research focuses on customer satisfaction and customer views on the product range. There is also a wardrobe audit, done every two years, which involves checking what exactly is in the wardrobe of a customer at that point. "We did one last year. While it doesn't give you a feel of the future, it lets you know the status on the day you do the research."
Feedback data is used to improve the store experience of customers and to build relationships with them. Upset customers are attended to immediately, service-related parameters are corrected quickly (the investment in the front-end software helps as all feedback forms are entered at the end of the day at the store itself), and department ratings are addressed at weekly meetings.
Westside’s employees are given regular training for better interaction. Some things may take longer. The wish list, a tool for customers to let Westside know their preferences, cannot be realised immediately. Only if there is an optimum demand can the store look at fulfilling it. Gia, Westside’s brand for larger-sized requirements, was the outcome of one such need.
The retail business is driven in equal measure by products and customers. While Westside takes in customer suggestions on products, it also has its own style consultants. "This business is based on forecasting," says Mr Chakrawarti. "A customer may not know what the trend will be six months from now. We use our understanding of customer preferences and our style consultants look at international trends and ensure they will be relevant in the Indian context."
Does customer loyalty translate into sales? "Loyal customers are, by definition, people who will be your advocates, in the sense that, though they may not shop only at Westside, they will show a preference for it as long their needs are catered to. At the second level, they will recommend us to friends and visitors."
Club West members are the major shoppers at Westside. The programme, which has been running for the last two years, now has more than 160,000 members. The programme is about building long-term relationships. "We call it bonding; it is our glue."
The programme engages customers at an interactive as well as emotional level. At the interactive level, members get points every time they shop, as well as discounts, special shopping hours and gift vouchers. At the emotional level, the action is different. Birthday cards and gifts are sent to members and their feedback and complaints are given priority.
Should a quality defect be identified, Club West members who brought that particular product are identified through a database. Westside will then call each customer, tell him or her about the defect, and offer to replace the product if the person is dissatisfied.
"The Club West initiative is really about appreciating the people who shop regularly with us," says Mr Chakrawarti. "They are our high-revenue customers and we work on giving them the best possible deal."
Successful retail is as much about acquiring new customer loyalists as it is about retaining them. "You need to protect your base — that’s very important — and you have to build it. We have done a lot of work in the area of retaining customers: going beyond the loyalty programme, changing formats, etc. Acquisition, on the other hand, is mainly through media advertising and specific efforts such as direct marketing to targeted customers." Another Westside way of attracting new customers is by expanding the chain.
According to Mr Chakrawarti, the retail cake is large enough for everybody to have a fair bite. Given that only 2 per cent of the market is organised, the potential for expansion is almost endless. "In Mumbai, major players such as Westside, Shoppers Stop, Pantaloons, etc, all put together, would have sales of under Rs400 crore. All of us have enough and more to gain by targeting new customers."