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Customer Relationships In Retail Stores

June 27, 2012

Let’s Consider these:

  • The guy on his mo-bike leaves home for the office. Before turning to the street corner, he stops his vehicle close to some newspaper vendors. He has to wait for his turn to buy Economic Times, as the person manning the shop is busy with another buyer. He gives a lazy look at the neighboring shops selling newspapers, including his favorite Economic Times, but still waits for his turn and buys the paper from the same stall, as always.
  • A girl born and brought up in Mumbai is working in the Mumbai office of a software company. She flies with her mother all the way to Chennai on a Friday late evening; she has to take the return flight the very next day after buying her wedding saris from T. Nagar in Chennai.
  • A young couple decided to buy a washing machine. They waited to save enough before buying it. They did some desk research, spoke to some users, and then shortlisted options. They decided it should be a fully automatic Top Loading machine. Then they visited various counters selling white goods and noted price variations. Zeroed upon a Brand and specification. Eventually, they ordered on Flipkart, and payment was on delivery!

The paper Economic Times remains the same in the whole town. The same content and the same price. But one vendor has a guy on a mo-bike waiting, even though adjacent shops are also selling the same paper. What made him wait? Was the vendor smiling ‘extra sweet,’ or was there any price discount? Or, is it the magic of what we call a ‘Perception’?

And those who know Mumbai know well that good silk sari stores and well-reputed brands are available in Mumbai. Yet the girl chooses to spend a huge sum of money on air tickets, is willing to face a very crowded weekend, and comes all the way to buy saris for her wedding. Again, is Perception at play, saying Chennai is the best for saris?

In the third example, someone buying a washing machine online was a big surprise to me. However, I learned that a good price difference of Rs. 2000 was there, and the delivery team arrived at a mutually convenient time along with a Card swiping terminal. Delivery was made, and as is the normal practice with ‘touch and feel’ physical stores, the very next day, a technical hand arrived from the manufacturer and installed the washer. The excited couple called it a neat, clean, hassle-free event.

Earlier, the buyers used to be warned “caveat emptor.” Now the tables have been turned. The advantage to buyers is a nasty hit to some of the inefficient retailers!

All retailers have to be smart. Understand the new rules of the game.

1. The purpose of a business is to locate that potential user of its products/services, attract and make him/her try at least once, AND retain the first-time buyer as a CUSTOMER.

There could be real ‘one-time buyers,’ like this tourist from South Africa buying a gift watch or a travel bag from a store in India. But, that act of one-time buying has the potential to gain a Brand ambassador for the store. On the other hand, the same act can earn the wrath of the buyer, who would bad mouth the store for all the ills the tourist perceived during that one-time buying.

2. The retailer, whether a single owner or a Company, must get a decent RoI. Earn profits and expand operations. The investor knows that. But do all employees know that? A rude cashier or a listless salesman can kill a sale. Why, even the parking lot attendant, a contract service provider, can kill the sale. So the retailer has to Enthuse, Enlighten, Educate, Evaluate, Empower, and Enable all his direct and indirect employees to be ‘customer’ oriented. Repeatedly.

3. Managing Customer Perception will continue to be a challenge and can impact revenues. Retailers should keep checking the perception factor repeatedly in order to stay in business and succeed.

Even as I am typing this, I had a word with a Branch Manager of a famous Retail Chain of Stores, instructing him to send me a refund cheque. I felt let down by this particular manager, adversely impacting my good relationship with this retail chain, lasting over some 20+ years!

It is said, “God can’t be in all the places, all the situations, and so, He created a Mother.

Similarly, the investor of the retail store can’t be present in every situation. Therefore, he has to put in place an intelligent, responsive & robust Customer Relationship culture that enables, encourages and empowers all the employees all the time. In a transaction-intensive retail operation, this is more important than ever!

P. V. Ramaswamy

P. V. Ramaswamy, a veteran in Retail industry, has worked with leading brands such as Godrej & HCL BPO on the Retail space. He has held various important positions in Sales, Customer Service, Operations, HR, Expansion and more. He recently floated a Media Company, Eklavya Productions (P) Ltd., which deals with film making, producing films of all types and sizes.

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