What Keeps the Consumers Coming Back to the Store?

Well, the easier question to answer is to ask "what keeps them away from the store?” Honestly there is very little understanding amongst retailers about the exact reason why consumers stay with a store and why they leave it. Dip stick studies and research has shown that there is little agreement on what the causes are. This is true because, reasons will change from country to country, and profile of consumers.
I can talk in the Indian context, and let me hazard a guess, (hazard is the right word since opinions that are not data driven always have Nay Sayers, even data is never conclusive).

It is my understanding that different categories have different drivers to sales
Basically, there are two relationships that determine what the drivers of sales is-
(1) the Involvement of the mind (read –“thinking” or “mind-set”) and
(2) the frequency of purchase
There is an inverse relationship between the two - Frequency and Involvement.

The Drivers of sales for each category varies, for example
Grocery - High Frequency, Low Involvement - Drivers are - Quality, Location, Price (in that order)
Jewellery - Low Frequency, High involvement - Drivers are - Trust, Price.
Electronics - Low Frequency, High involvement - Drivers are - Price, After Sales Service, Trust, Location.

It can be seen, therefore, that the success factors of each category is quite different. The mistake that some retailers make is in not understanding and applying the basics of Category Management, and trying to apply the success criteria for one category onto another.
A good example is the electronics category. There are many chains today who are majors. But the service levels are very different in each one of them. Some are price-fighters; whilst others believe that they want to play in the Price+Service+Experience segment. Clearly even in Electronics there cannot be uniformity of approach across - to sell an Electric Iron does not require a great amount of assisted selling, but a Cell phone and Video Game takes more (a) time (b) skilled salesmanship to close a deal.
Grocery on the other hand sells on presentation. If it is available then it sells if the quality is right and price is competitive.

So what keeps Consumers coming back? My take.

• Present each category in the store in a manner that accounts for its own success factors. For example, don’t be stingy in putting skilled and trained people in the apparel and furniture section, whereas the dry grocery needs less help in shopping, but the wet grocery (fruits and vegetables) needs assisted selling. Respect the Involvement x Frequency matrix of each category.
• Every category has goods that require special handling- tomatoes, to suits, to cameras. Train and train the staff till they drop!
• The word “marketing-mix” is rarely used in retailing; it should be. It is the sum total of everything that the consumer wants from each category, including the smiling staff.

Hence retailing is about “managing unity in diversity”. The one who understands that wins the consumer; and keeps them coming back. And those who drive their retailing business mainly using their P&L, will forever wonder what they did wrong!

The Problem with Efficiency

The Problem with efficiency is to figure out as to what it is that we need to make efficient.
What is it that we are trying to make efficient? In an ongoing concern there are multiple interconnections and interdependent processes that lead to the final result. It may not be wrong to comment that if all segments of the company try to achieve "its own", "maximum" efficiency the final result may not be efficiency to the final consumer, and then, therefore, to the shareholder. I would be wary of those who shed copious tears in the cause of "consumer centricity" and equate all round efficiency to be the deliverer of happiness.


I quote from one of the most important books ever written for running companies. Re-engineering The Corporation by Michael Hammer and James Champy. I bought this in 1998, a few months after I had joined Food World Supermarkets, in Chennai, and didn’t realise that this book would greatly impact what I would think and do there after. I would still recommend it to any one even for a reading again.

In the first chapter the second point is worth quoting in this context

"Often the efficiency of a company's parts comes at the expense of the efficient whole".

Whilst there are other gems in the book in terms of ideas, this for me changed for ever the way I looked at the problem.

Let me quote an example from my retail life. Being in-charge of supply chain as well,  I was visiting Indore, and reviewing the performance of each store. One store 3000sft at the bottom of the performance rank was a store, standing alone in a town 80 km away. The sale of Fruits and Vegetables was the lowest. I knew this might be the reason for its under-performance. Why? The head office managers had many theories, to offer. So after hearing it all I called the Store manager on the speaker phone. I asked him, "young man why is your store doing so badly". He said without a seconds delay, "Sir I am low on F&V", Why I asked. He said the load arrives every day at 3pm! How can the produce be fresh then? I looked at the transport manager who was shifting in his chair, as he told me that he was delaying the dispatch so that he can club some other loads as well to lower the transportation cost. It was clear. I mandated a trial. Send at any cost of transportation, produce to the store, to reach at 7am.

This trial at the end of 3 months saw that the bills at store increased 4 times, sales had jumped and losses we hugely reduced. The store was removed from the list of stores to shut down. But what happened to the transportation cost? Well 2 things - the quantity increased and so cost lowered, and two-the rupee gains in stores was more than the increase in transportation cost.

To create a virtuous cycle of retail one must invest in the sales at the front end, albeit sensibly, at higher back-end costs. This is not a rule but directional. The Sum is greater than the sum of its parts. Any takers?