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Friday, January 16, 2015

Big Brands don’t Reward their Spendthrift Clientele

The urge to splurge has been tapped into by many businesses. Loyalty programmes keep the regular clientele of stores/brands 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 programmes.  In India, Shopper’s Stop claims more than 60% of sales are from loyalty members. Subhiksha claims 80% of sales come from loyalty members – so why they went bankrupt, is the big question.
After all, putting together reward/loyalty programmes 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. 
If this is the case of s prêt store like Lifestyle, then there are high-end stores which also, from the look of things in their store windows, over-price items and sell them to their loyal shoppers. You have only got to look at some of the clothes at Marks & Spencer, to realize, you get much better and cheaper stuff on Colaba Causeway or on Hill Road, Bandra (in Mumbai). 
Ever seen the display in the Versace window (before it shut down) at INOX, Nariman Point? They flaunted such mediocre stuff that I was never tempted to go in and look at their label…or ask the price of the outfits. One reason being, I don’t want to die of a heart attack at a young age. The other being, I know where you can pick up better clothes at a more reasonable place in Breach Candy – a one-time shopping mecca for people with money and before these big label stores came up to pull wool over our eyes. I’d rather buy Versace crockery than those outfits with my money. No wonder that place shut down. 
A source in the real estate business told me that the Poonawala family – yes the horse-breeders and Derby enthusiasts who flaunt Ferraris and Lamborghinis and should have known their brands well - were in fact cheated by the people who licensed the Versace brand to them. They palmed off outdated stock to the Versace outlet here in Mumbai, and customers were not being fooled about it. More power to us! So, I was right when I walked past that display window with complete indifference. The same thing has happened to Escada, another really top designer brand worn by people like Princess Diana. 
A friend who travels abroad quite a bit told me that Marks & Spencer is also a has-been brand in the UK and a lot of their range in India is also not quite the current season. This is a brand that is desperately trying to recapture the magic they used to enjoy years earlier, where if you were seen toting their shopping bags, you were considered classy. So, if you want to buy the absolute latest from Marks & Spencer, then even their original store in the UK is willing to send stuff to us in India with standard delivery charges reduced to £10. 
Mango has a better range of clothing and their jackets are superb. It’s a pity we don’t really need to wear them much in Mumbai. Guess is another brand that has a good range of clothes and shoes. This information is for people who absolutely must have branded stuff in their wardrobe. So, from what I have seen, these two brands provide the bang for your buck. 
Anyway, most readymade garment stores in India are – and have been for some time now – importing clothes from Bangkok, Thailand, Korea and Spain. I’ve bought amazing imported clothes from a store called Breach Candy Boutique for years and which I later find some celeb wearing with a much bigger brand label attached to it. 
When I decided to find out what high-end brands, across categories, are offering to their loyal customers, it turns out that not many stores even have a loyalty programme in place for the people who sashay in and spend huge amounts of their money there! Expensive chocolate brands like Bateel, Patchi and Leonidas have nothing to offer people who come there and pay approximately Rs 300 for 100 gms of chocolate (at Bateel) or anywhere between Rs 75 to Rs 95 for a piece of chocolate (at Patchi). As anyone can see, people can have an entire meal for this kind of money. But Leonidas’ store manager, Vrinda Rambhia said that a reward programme is being designed, while Patchi franchise owner in India, Rashmi Joshi also confirmed thinking about such an incentive. She’s waiting to open a few more stores and then introduce a reward programme. 
Clothing and accessories brands like Guess and Mango also don’t have any reward programme in place. When contacted, a Guess store employee said they were thinking about starting something, but when are they going to do it is anyone’s guess – pun unintended! Lladro also has nothing for regulars who are fans of their beautiful porcelain figurines, which I think is a shame. I would love to sign up for their ‘buy one and get one free’ offer if they ever came up with something like that! Their Lladro range sells from Rs 6,000 onward and their Nao range sells for Rs 1,000 onward. So, may be pairing one with the other could do wonders. 
Marks & Spencer has just introduced a spiffy looking card recently. The enrollment process is very simple. All you need to join is spend Rs 2,500. Their website gives these details: 

  • For every purchase of Rs 100, you earn 1 point. Every point you earn is equivalent to Re.1
  • You also earn points for purchases made on discounted items.
  • The reward points you earn reflect within a short span of 7 days and can be redeemed against further purchases at their stores.
  • You can start redeeming your points once you have accumulated a minimum of 50 points, after which you can redeem them in denominations of Rs 50. 
  • This programme is valid in India only.
 Benefits
  • Refer a friend and earn points. Help a friend discover the privileged world of the M&S Club and earn an extra 50 points.
  • Birthday/anniversary offers: You can look forward to treating yourself with a special 10% discount on all Marks & Spencer merchandise on these days. This does not include the sale merchandise.
  • Special Invitations: As a part of the extended Marks & Spencer family, you can look forward to some special invites.  
Like Swarovski's bling? Then you are in luck. Here is more information on the Swarovski Reward Programme. When contacted, their representative Divya Bakshi e-mailed me these salient points. Swarovski Crystal Society (SCS) members enjoy a whole range of special benefits: 
-   The chance to purchase the current annual edition and other exclusive SCS products
-   An annual membership gift 
-   A free subscription to the quarterly Swarovski magazine 
-   Access to the exclusive members-only area on the Swarovski website 
-    Free admission to the "Swarovski Kristallwelten / Crystal Worlds” in Wattens, Austria including a warm welcome in the VIP lounge 
-    Invitations to special SCS events and tours 
-   A personalized membership card

Members may join the SCS for either 1 or 3 years. Membership begins with payment of the membership fee and expires automatically at the end of the chosen period.  Several weeks before your membership expires you will receive a notification along with an application to renew your membership. There is no obligation to purchase any Swarovski articles

To become a member, simply carry out the following steps: You can fill the application form which is available at the SCS retail outlet along with the membership fees and submit it to your selected SCS retailer, where the membership can get processed. The token membership fees to join the society is as follows:
  • INR 2,750 for one year membership
  • INR 5,000 for three year membership
  • INR 2,400 for one year renewal/ rejoin
  • INR 4,500 for a three year renewal/ rejoin
Such loyalty/reward programmes are being designed by websites like this one http://www.netcarrots.net/net/services/customer-loyalty-programs.aspx  among many. So, the expertise is available to get a programme going. Then why is it that all these big brands I spoke to, except for Marks & Spencer and Swarovski, don’t have anything in place? I mean for the kind of money they take for their stuff, this is hardly an add-on service. Are they not grateful that even in a third world country like India, there are people with disposable cash to buy their brands? So, don’t they want to reward such spendthrift souls? 
My guess is that, the reality is quite different. These brands have the snazzy showrooms but they don’t get all that much business to justify coming up with a loyalty programme for the let’s say, average of 50 customers they may be seeing in a month, who walk into their store. May be, even this number is on the higher side and besides even out of those 50 people, a lot of them just browse and walk away – I do it. Such brands often see more people window-shopping outside their store than people actually plunking down hard cash, inside the store. 

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