There is no doubt that the growth of e-commerce has affected the traditional brick and mortar retail industry. Retailers in India haven’t begun closing down physical stores like JC Penney’s have done in the US but there is no denying that a big chunk of retail business has moved online. It is not just the better discounts that are attracting customers to e-commerce. In India, more and more customers are beginning to shop online without comparing prices. The main reasons for this are the convenience and the customer experience.
Yet, it is surprising to see how little importance is paid to customer experience by Indian offline retailers still. Forrester’s India Customer Experience Index 2017 shows that customer experience has improved in comparison to the report of 2016. However, that improvement has largely been in the banks and financial institutions. In the traditional retailers category most retailers, with the exception of Lifestyle, got just an “Okay” ranking for customer experience. And these are just some of the large retail chains. The customer experience at smaller retail chinas and traditional retailers is sometimes poorer. On the whole retailers in India have either improved customer experience only marginally or have failed to do so.
In order to acquire and retain customers in an age of digital disruption, low brand loyalty and rising customer expectations, retailers must improve the customer experience at their stores. But why is it that retailers in India are so slow at doing that?
Poorly designed and implemented CRM and Loyalty schemes
Most retailers have some form of membership or loyalty scheme where points are added according to purchase. Some of them send updates to their members by email or message. However, so far there are very few retailers, if any, that use this platform to understand what the customer is interested and proactively give him or her reasons to buy. There is no attempt to use the data at their disposal to better understand and better serve the customer. There is no attempt to distinguish between regular, high ticket customers and others. This phenomenon is strangely widespread in the retail industry, from supermarkets to fashion and high-end luxury retail.
An unclear understanding of omni-channel retailing
It is estimated that 650 million Indians will be connected to Internet by 2020 of which 175 million will be shopping online. By which time 25% of organised retail or about US$240 Billion in sales will be online. Seeing this growth in online retail, many Indian retailers have e-commerce enabled websites. But these websites operate independently of the offline stores. There is no synergy between the online and the offline businesses and they end up competing with each other. Omni-Channel retailing is about fusing the offline and online stores to get a seamless shopping experience.
Multinational brand but local customer experience
Liberalisation and a rise in spending capacity of individuals saw a number of well-known international brands come into India mostly as franchises operated by large Indian retail groups. While the products available at these stores match what is available in other countries, in most cases the customer experience does not quite match those in their stores abroad. There are two reasons for this. One, franchisees lay emphasis is on building the brand and improving sales, and emphasis on improving customer experience may take a back seat. Two, the shopping behaviour, cultural differences and customer expectations are different in India and policies made in other countries can either not be transplanted here or the local operator’s aversion to risk comes in the way of implementing some policies such as exchange/return policies..
Offering a good customer experience at retails outlets critically hinges on the frontline salespersons. Proper recruitment and training of salesmen and salesgirls is crucial in ensuring that customers enjoy the experience of shopping at a store. Increasing opportunities, poor pay, poor working conditions and poor treatment of staff have increased labour turnover in the Indian retail industry. This in turn affects customer service.
Last but not the least, is an attitude amongst many customers in India to look down at people who serve them. This applies to the retail sector as well and probably the worst affected in the retail sector are the waiters in restaurants. Many Indians just do not think it is necessary to thank or be polite to someone who is providing a good service. While it is not desirable from a company’s perspective, salespersons cannot necessarily be blamed if they do not provide the best service to a customer who treats them poorly. Managements need to treat such incidents on a case-to-case basis and while maintaining good customer relations also show compassion with the employee, when needed.