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Mobile loyalty landscape & need gap analysis

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Mobile loyalty landscape & need gap analysis

  1. 1. Mobile LoyaltyCurrent Landscape & Need-Gap Analysis Soumyajit Sengupta 12P171 MDI
  2. 2. Use Loyalty Apps• For Customers: – Keep track of their progress – Redeem rewards – Obtain coupons – Check-in at stores• For Retailers: – Builds customer loyalty – Increases Brand Value – Understand Purchase Behavior of Customers – Aid in the financial well-being of the company by Identifying the Most Important Customers
  3. 3. Advantages of Mobile Loyalty Programs Customers & Retailers• Convenience• Availability• Ease of Marketing• Ease of Access• Greater Loyalty – Greater Personalization• Additional Engagement• Greater Financial Returns – due to Repeat Customers• Greater Reach – Increasing Penetration of Cellular Service in the Country• Ease of Payment – One-stop platform linking payments to points accumulation• Recovery• Understanding Customer Preferences and Choices• Additional Sources of Revenue – E-Gifting
  4. 4. Modus Operandi Loyalty Programs• The consumer/customer has to be kept at the centre of the program. It is then primarily a 2-step process. But executing them is very crucial to the success of the program.• Step 1: – Infuse SIMPLICITY and TRANSPARENCY as a starting point• Step 2: – Set down the rewards and the way to earn them clearly and unambiguously• Only a few Indian companies have managed to implement them successfully – Future Group – Shopper’s Stop
  5. 5. Current Landscape Indian Retail Sector• Indian retail business was run in a network, knit together in a very personal manner• Post globalization, there has been a rapid de-personalization of operations in Indian retail• To bridge the gap between the older and the current modes of operation, technology-based consumer relationship management (CRM) needs to be adopted• The concept of loyalty or CRM is highly advanced in developed markets but in India, companies are just waking up to this reality• This is where Mobile Loyalty steps in• Statistics show that only 20million people are enrolled in the top 10 loyalty programs in the country. This is a very small figure compared to a population of 1.2billion people. So the scope of future reach is high.• Loyalty Programs & Mobile Loyalty Programs are currently provided by a number of third-parties like: – Payback (Client: Future Group)-Physical Loyalty – Accentiv (India) which has clients like Van Huesen, Tommy Hilfiger and Indian Oil-Mobile Loyalty
  6. 6. Mobile Loyalty Current Offerings in the Indian Retail Sector• Retailers such as Future Group, Landmark Group, Reliance Retail, Indus League and Shoppers Stop are now experimenting with mobile-based mechanisms to relieve consumers of the pain of carrying loyalty cards every time they visit a shop• Indus League – Makers of Indigo Nation, Scullers and Jealous 21 introduced a mobile-based loyalty scheme after it found that women were keenly using GPRS to check out Jealous 21s new product offers, making marketing activities more relevant• Landmark Group – Owners of “Lifestyle” allows customers to accrue and redeem points through an SMS short code service even if they are not carrying loyalty cards• Madura Fashion & Lifestyles Van Heusen brand has gone a step ahead by tweaking its mobile loyalty program on the basis of gender – Diva Club has been created specifically for Women, focusing on Discounts
  7. 7. Suitability Loyalty Apps• Loyalty apps work best for products which have a high repeat-purchase quotient like apparels and commodities• Loyalty apps will not work for products which are not suitable for quick, repeat buys like a house or a car• Successful loyalty programs are those that constantly evolve based on: – The needs of the customer – The responses of the competition• There is no room for complacency given that it’s a tool that effectively decodes customer purchasing behavior
  8. 8. ScopeSingle, Unified Loyalty Program in the Indian Retail Sector• Loyalty Programs in a developing market like India has a huge potential but the current ecosystem is not conducive to offering a single, unified loyalty program.• This is because of the low level of organization in the country’s retail sector. The retail sector is valued at $450billion(contributing 35% of the GDP) while the organized sector is only about $30billion.• The scale of the retailers in the country is not yet that much to tap into the market as a single unified loyalty program. This will be possible as the sector becomes more and more organized.• The best option with respect to having a single unified program is to have a hybrid form of loyalty program. It will not be the true coalition model nor will it be a completely disjointed model. It should be a model in which the databases, though different, are shared on a common platform.
  9. 9. Advantages Mobile Loyalty Apps v/s IT-based Loyalty Programs• In retail, margins could be as thin as 1%. Hence, after an initial thrust on store management, many players find it more prudent to open new stores or introduce new products rather than investing in IT-based CRM.• Leading retailers are taking loyalty programs to mobile phone platforms, which are not as expensive as IT-based CRM.• To reduce the costs of loyalty programs some of the IT companies are hosting these platforms in the cloud systems
  10. 10. Need Gap Analysis Retailers• Need of a strong IT backbone to ride on, which is missing from most chapters of the Indian retail sector• Need for a more reliable customer authentication tool • Mobile Loyalty serves two purposes: – Checks misuse of the CLP(Customer Loyalty Program) offering – Helps in tapping the correct transactional data• Need for a simple interface and easy access • NFC and barcode scanning would part of the Loyalty platforms in the future • Customer loyalty programs in a NFC enabled phone means clear and convenient interface allowing for tracking of the exact number of points and even see the products we can spend these points on • NFC also provides easy and fast access to loyalty programs • In addition to bringing in an element of ‘wow’, they also enhance consumer convenience (easy to access information and transact) and reduces per customer time at the till (easy to redeem)
  11. 11. Need Gap Analysis Customers• Satisfaction v/s Loyalty – There is still a yawning gap between • the percentage of people who say theyre satisfied with a business and those who consider themselves "loyal" to that business • who are intent on maintaining the relationship and continuing it into the future – Many companies have figured out how to deliver satisfaction, but theyve not yet figured out how to earn loyalty anywhere near those levels – This loyalty gap can be particularly pronounced in an industry like retail where competition is harsh and growing