Monday, January 11, 2010

Big Brands don’t Reward their Spendthrift Clientele

The urge to splurge has been tapped into by many B2C (business-to-consumer) businesses. Loyalty programs keep the regular clientele of stores coming back for more. It works well for both parties – the people who love to shop till they drop and obviously, the stores themselves.

Here are some statistics: 76% of US retailers and 75% of US shoppers are engaged in loyalty programs. In India, Shoppers Stop claims more than 60% of sales are from loyalty members. Subhiksha claims 80% of sales comes from loyalty members – so why did they shut shop recently, having gone bankrupt, is the big question.

After all, putting together reward/loyalty programs takes effort and time but if your merchandise is of an inferior quality or despite the discount the membership card entitles you to, they seem steeply priced in comparison to items sourced by a rival store, then smart shoppers are going to ditch the reward membership card. For eg: At Lifestyle, a pair of khaki shorts is priced at an outrageous Rs 800 while I’ve picked up full length formal trousers in a wrinkle-free cotton-satin fabric, for the same amount at Westside, two years ago.

Here quality was not an issue but who is going to pay Rs 800 for a truncated pair of pants? Maybe Lifestyle’s reward card – Inner Circle – members really don’t care about the price factor at all and just want to be seen with Lifestyle’s shopping bags rather than say, Westside or Pantaloons. But for my money, I’d rather buy full-length khaki trousers and wear them for a few years and then crop them into shorts eventually, which is what I’ve done in the past. I’ve used the same tactic, as probably have many others, with any pair of jeans that was too faded or worn out to wear outdoors but just comfortable enough to wear at home.

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