How to hold on to customers

In the race to acquire customers, the art of retaining took a back seat. Customer loyalties are, therefore, flagging and almost like unicorns – non-existent. In the context of Indian e-commerce, this is largely due to better offers on other e-commerce platforms and hidden costs such as shipping and taxes. Take, for instance, the time when Amazon set foot in India. Flipkart was already a name to reckon with in the e-commerce space and synonymous with the online shopping tag, and had a big local advantage. It took less than a year, though, for Amazon to enlist itself among India’s top e-commerce players. And ever since, the two e-commerce giants have been in a two-horse race. This reflects the rapidly evolving, unpredictable and fluctuating nature of the new-age online shopper.

A Deloitte report suggests that India witnessed 39 million online shoppers in 2015, a figure set to reach 220 million by 2020. This enormous ecosystem is driven by a few clicks where shoppers can shift from one virtual marketplace to another in a matter of seconds, not possible in a typical offline setting. Additionally, the online shopper is not just spoilt for choice but also guided to pick the best deals, courtesy the rise of free comparison engines. Add to this the discounts, coupons and cashbacks, which work as further attractions. This combination of ease of shopping and ease of information has led to the renaissance of e-commerce giving us entities such as Snapdeal and Flipkart. The greater battle for e-commerce players has, therefore, become one of retaining customers and having them return for more, rather than acquiring new customers. This becomes more profound in horizontal categories, where the differentiator is everything else other than the product itself.

Like any eager school-going first bencher keen to impress the teacher, all e-commerce players in the B2C environment are doling out the big bucks as they vie for increased customer attention, especially as investors get increasingly generous with each round of funding. Most apps, in fact, offer monetary incentives for their downloading or use. In case of e-commerce apps it is the comfort, ease of information and incredible convenience that are the key reasons. In this entire pandemonium, billion has become the new million and customer acquisition has become the function of discount. Users typically uninstall apps as soon as the incentives stop rolling in. The customer, however, seems to benefit the most from this situation.

Customer retention – the future

To sustain business in the long run, the need of the hour is to provide a buying experience that goes beyond mere monetary incentive. The secret ingredient in this recipe is personalisation. The future of retail is set to be dictated by the same level of personalisation that shaped traditional retail over centuries, aided by technology. To add to this model, it is imperative that personalisation is integrated and does not take place in silos, to create a more holistic impact on the consumer.

A brand offers the user multiple touch-points – web, mobile (web and app) and social – where engagement is taking place in individual capacities. For a meaningful personalised buying experience, these silos need to be bridged to understand the behavioural flow across all channels and devices used by the customer. The problem for most e-commerce companies today is largely that of the lack of the identifier that connects these devices and channels to give a compounded view. This has led to the emergence of B2B big data solutions offering e-tailers cross-device capabilities.

Some may argue why the success strategies of Amazon and Walmart cannot be duplicated. The answer lies in the fact that India and the US are staggeringly different markets with respect to culture and audience. Brands are required to cater to one country as a whole, though with different culture sets. This calls for increased focus on customer retention and paving a different growth story for India. Till then, I am going to check out the new summer sale running on Flipkart!

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