Article Details

Impact of Consumer Loyalty Programs In Retailing Business: a Case Study of Indian Retailer |

Ganesha Hr, in International Journal of Information Technology and Management | IT & Management


There has been arevolution during the last three decades in the Retail Industry, especially in India. The retail market has changed from aproduct-oriented industry to a more market-oriented to the service andexperience oriented, with the customer as the core of their operations. Thiscustomer centricity has been the outcome of the hyper competition in the retailmarkets, and every retailer is doing their best to woo the customers from otherretailers. This phenomenon hasresulted in the maximization of the customer focus and the path towardsbringing in the customer delight, just not the satisfaction. CustomerRelationship programs have been taken as the strategy to attract customer forrepeat purchase as well to up-sell and cross-sell to the existing customers atlower cost than attracting the new ones. Hence companies started to work itscustomer loyalty programs to keep customers for long time while making profit throughthem. Working with customercare the company hopes to create satisfied and loyal customers. One of the mostpopular ways of working with customer care in the retail business is customerloyalty program. The popularity of this is based on the beliefs that loyalcustomers are lucrative and these programs would bond customers to the company.Under the loyalty program companies are offering different kind of benefits tothe customer. Gift cards, frequent purchase program, point program, rewards,offers. Schemes, value added services etc are lucrative content of loyaltyprograms. Indian consumer behavior has evolved over the years focusing onmerchandise assortment, convenience and experiential delight from priceconsiderations. The aspiration driven demand for goods and services has risentransforming the consumer behavior. Retailers are striving to developdifferentiating strategies to deepen customer loyalty. The fiercely competitive Indian retailenvironment has forced the retail businesses to focus extensively on customerretention of their existing customers. As a result, leading Indian retailerslaunched their loyalty programs offering a range of attractive tangible andintangible rewards to their customers, with an aim to retain them and enhancethe retail performance.