Retail Success Strategies: 5 Key Insights from B.S. Nagesh at the Retail Leadership Summit 2023
The Retail Leadership Summit (RLS) 2023, held in Mumbai, brought together industry leaders and experts to discuss the latest trends and challenges in the retail sector. One of the notable speakers at the event was B.S. Nagesh, a renowned retail veteran with extensive experience in the Indian retail industry. He is also the founder of the Trust for Retailers and Retail Associates of India (TRRAIN).
Customer loyalty is a crucial aspect of any business, and companies must strive to create an environment that fosters it. B.S. Nagesh shared some valuable insights about this. Nagesh talked about the crucial role of omnichannel retailing in developing customer loyalty, emphasizing the need for retailers to adapt and innovate in the ever-changing retail landscape.
Here are a few unique insights for retail brands to look into when creating positive customer experiences.
Insight #1: Investing in People: Unlocking Retail Growth Through Sales Associates
According to Nagesh, creating a positive experience for the customer through the product and the sales associates on the floor can significantly influence the customer's decision to return repeatedly.
Nagesh cited data that shows that a loyal customer typically spends twice as much as a one-time customer. With the help of a sales associate, often also called a personal shopper, that figure goes up to four times.
"If a customer spends ₹2,000 in your store when they shop on their own for the first time, as part of your loyalty program, the customer would generally spend ₹4,000. And if you have an associate or a personal shopper, the average spend is ₹8,000. 2:4:8, this ratio remains similar for any business size, scale, or format."
Nagesh cited examples of how personal shoppers in stores like Shoppers Stop contribute significantly to sales. He also highlighted how many customers come to stores specifically to meet their favorite sales associates, asking for them by their names. Therefore, businesses should not ignore the power of these associates and must invest in them.
“In a leading multi-brand outlet, Shoppers Stop, with a turnover of ₹4,000-₹5,000 crores, 10% of the business comes from personal shoppers. An average personal shopper's sales account to ₹12,000 versus an average ticket size which is ₹4,000. There are personal shoppers accounting for ₹3-₹5 crores sales a year, and they have 250+ shoppers."
Insight #2: The New Normal: An Omnichannel Approach for Small Retailers
Nagesh highlighted that in today's world, customers have become omnichannel, meaning they expect a seamless shopping experience across various online and offline channels. However, many retailers, especially smaller ones, still argue for the limitations of technology. But knowingly or unknowingly, retailers have embraced omnichannel retailing.
Nagesh illustrated this point with an example from the traditional kirana (local grocery store) experience in India.
"Omnichannel is no longer a requirement of high technology. Small retailers often complain about the lack of technology. But something as simple as using mobile to serve your customers better helps you build customer loyalty. Your kirana store is already doing it."
He elaborated that a typical order journey for such orders at a kirana store involves the owner receiving a call from a customer, delivering the product to their doorstep through a local delivery person, and completing the transaction, all through mobile communication.
However, this kirana store owner doesn't call himself an omni-channel retailer. Nagesh argued that this is a perfect example of basic omnichannel retailing. It combines offline and online elements seamlessly, with the mobile phone playing a crucial role in the process.
The key takeaway for many small retailers is that they may not have access to advanced technology, but they can still provide an omni-channel experience to their customers through simple yet effective means. He emphasized that the key is to understand and adapt to the changing expectations of customers, who now expect a personalized and convenient shopping experience, regardless of the channel they choose to shop from.
Insight #3: Keeping Your Brand Alive in the Digital World: Insights into Last Mile Delivery
Nagesh noted that while online retail has become increasingly popular, last-mile delivery, often handled by third-party logistics players, can dilute the brand's identity. Even your brand's packaging might not have the desired effect on the customer.
"Even the best branding through packaging can get lost with third-party logistics in play. Logistics partners' branding overshadows yours, transforming the package into theirs instead of your brand."
Customers may remember the delivery service's name but forget the brand they shopped from. Therefore, businesses must think creatively about retaining their brand identity even in the online delivery process.
Nagesh shared an innovative idea implemented by Shoppers Stop, where they included a small sachet of perfume in their packages to create a unique and memorable experience for customers, reminding them of the brand when they opened the box. These small details can make a significant difference in building customer loyalty.
Insight #4: Redefining Customer Loyalty: A New Perspective on Customer Retention
"Don't ask how the customer is loyal to you; ask how loyal you are to your customer."
Nagesh believes that loyalty programs should not be viewed as a means to attract loyal customers to your store but as a way for loyal retailers to go to their customers.
Customers have already made an effort to come to your store, and retailers need to plan for a memorable customer experience. Only planning for these experiences will create moments of magic and delight, taking the brand to a new level. The key to unlocking the hidden wealth within companies lies in engaging with our customers. The customers are right next to us, waiting to be served repeatedly. Instead of solely relying on social media, we must focus on the low-hanging fruit within the business.
"Are you truly listening to your customers? Every day, in every store, we need to ask ourselves, how was our service yesterday? Did we create any new experiences? And if we've found success in one store, we need to apply that formula to our entire chain."
Insight #5: Making the Most of Your Last 5 Minutes: The Key to Achieving 100%
In his final insight, Nagesh shared a strategy to achieve 100% targets in the last minute of business. He revealed that the last five customers in a store could swing the business by 5%. Nagesh recounted an experiment conducted by a manager during his retail career. The retail brand in question was struggling to achieve 100% of its targets and, despite all efforts, failed to reach 100%.
To investigate further, the manager conducted a store visit and discovered that the last 15–20 minutes before closing time could change the game for the brand. Customers arriving at that hour were in dire need and knew exactly what they wanted to buy. They were definite buyers and would lead to a 100% conversion.
And the irony is that the store offers the poorest customer experience to these customers. Staff availability is low as they are busy winding up to close the store or head back home. Even product availability is poor, as many displayed products are taken down by then.
In the experiment conducted by the manager, a few of them would be at the store gates during the last 30 minutes of the store's opening hours and personally cater to the last-minute customers. With this strategy, they achieved 100% of their targets and identified a valuable lesson for all retail brands.
Finally, Nagesh concluded the session by sharing his final words,
"Simple things happen in retail and will continue to happen irrespective of whether you are a small shop, Shoppers Stop, Reliance, or even Walmart. This works exactly the same way every time, everyday. Because at the end of the day, eventually, the size of retail comes from cumulation. Thousands of stores together make Reliance what it is. But at the store, you have to do those same things."
So, keep doing the simple things and watch your business grow beyond your imagination!