One of the common comments in defense of the mom and pop stores used to be that these people have served the customer for years and would know them very well. When I was in high school, I started experimenting with soaps and once asked our friendly retailer for Aramusk. Not sure how many of you have used Aramusk but I think the brand belongs to Henkel in India now (needs citation) but in college it was one of the coolest soaps available for a man. Our whole family used Hamam, and the friendly old uncle at the grocers told my mother, “today he is using Aramusk, but when he pays for it himself he would use Lifebuoy. As he foretold in hostel I had used Lifebuoy a couple of times to save money.
(Image from www.bigbasket.com)
In other words the grocer did know our family well and knew our consumption pattern as well. He used to point out the key offers and give advice on what we should buy and at what rates. Long time ago he closed shop due to competition from larger retailers and eventually passed away a couple of years ago.
Retailers like him and many others are being replaced by larger retail chains and now by online retailers. These organizations make up for this lack of personal touch by using technology. The organizations use sophisticated CRM systems, which knows our consumption pattern, what we order, how much we order, broken down month on month and week by week.
Armed with all this information these organizations are able to unleash top of the line analytic system to predict demand, procure material and predict cash flows. But unfortunately all the technology is not able to get to know the customers very well. Let me give you an example.
My wife is very impressed with Big Basket and mostly orders the weekly grocery through them. I like their user friendly no frills system and they mostly deliver quality stuff.
The last couple of weeks they have been running a scheme that anyone ordering above Rs 2,000 would receive a free 2 liter Pepsi bottle. And religiously Big Basket has been sending them over along with the rest of the grocery. Today when the grocery arrived I asked them to take the Pepsi bottle back. The simple reason is that we don’t have aerated drinks at home. The last couple of bottles were gifted to people working for us, but this time there was no one to gift the bottles to. While taking them back the delivery man remarked that this was the 4th bottle he was getting back that day. So we were not the only customers returning the bottles.
Every customer has a few asks and they are very simple
1) Know me
2) Suggest offers that work for me
3) Continue doing 1) and 2) to continue doing business with me
Now what I don’t understand is why are not retailers understanding this simple logic. A simple analysis of our order history would have shown big basket that we don’t order aerated drinks. But we do order almost 4 liters of juice every week. The brands we normally order are real and Tropicana. Interesting Tropicana is a Pepsico brand. I am not sure why Big Basket was serving out the Pepsi, maybe it was a scheme from the Drink manufacturer or a local distributor. On further examination I found out that this deal also included a 5 % cash discount in addition to the Pepsi.
This is absurd if you ask me. Send us Tropicana as you would realize from our order history we have been consuming juice weekly. Also we have not been consuming any aerated drinks. Where is the know me and make offers that work for me here ? These are the three things I would have done differently
1) In my opinion the one size fits all deal is over. Retailers including Big Basket have to view and analyze the order history in order to make offers. In my case they should have sent over a carton of juice. If this was a Pepsico offer only then they are better off sending Tropicana.
2) If the order history does not show any aerated drinks then the retailer was probably better off giving a cash off rather than sending something that we wont use.
3) In case of absence of 1 and 2 inform the customer and seek his permission. I would have saved them the trouble of sending something over and having to cart it back again. As mine was not the only bottle he was carrying back I am sure it would have saved them a lot of trouble.I saw another funny order, Free tomatoes if you order Shimla Apple. I am not sure if there is any co relation between the consumption patterns of Apples and Tomatoes. Rather strange offer if you ask me. I think
In conclusion, I think retailers need to use the data they have. Otherwise its another example of data sitting on servers and building on storage and energy costs. Data needs to ve used to deliver customized offers and this dialogue has to continue…
If you have similar stories or want to discuss other strategies that retailers should follow do let me know and we can publish the same on the blog..