Building loyalty, the Croma way

Croma, the consumer durable and electronic retail arm of the Tata Group, has grown to be a major player in less than a decade. Ajit Joshi, CEO & MD, Infiniti Retail talks about the brand's success strategy at Pitch CMO Summit 2014

e4m by Simran Sabherwal
Updated: Mar 25, 2014 7:42 AM
Building loyalty, the Croma way

Brands are built over a period of time but what if the challenge was to get people to trust the brand from dayone, particularly as the parent brand has a legacy of over 140 years of “trust”? This was the challenge set before Ajit Joshi, CEO & MD, Infiniti Retail,in 2006, when he took over the Tata Group’s foray into retail of consumer durables and electronics with Croma. Joshi’s focus was on having a “Customer centric approach to brand building” which he says played an important role in building Brand Croma.
Every brand has a distinct personality and this has to be leveraged in building a brand. Joshi cites the example of a recent video that went viral - Power of 49, for the Jaago Re campaign which encourages women, who make up 49 per cent of the electorate, to go out and vote. Though the video has no reference to the brand, consumers can directly relate it to Tata Tea which started the campaign during the last election five years ago and continued to build on it. He says, “A right brand pushing a right cause makes great sense.” Speaking on retail, Joshi lists out some key factors when targeting customers and elaborated onCroma’s strategy.

Brand to be purchasedis pre-decided
According to a BCG study, when it comes to consumer durables, consumers already make up their minds on their choice of brand before they come to the store to make the purchase. Rarely does a retailer have the power to convince them to make a switch. The only exception was in the computing category where the advice of the retailer was sought. This was especially true when the first computer/laptop was being purchased for the household. Joshi also stated that for other categories, like television, refrigerators, washing machines, it is the lady of the house who is the final decision maker. Joshi also pointed out that customers very rarely change their budgets.

Taking on the online stores
Though a lot of customers are now researching and buying online, Joshi says that touch-feel-and-try still plays a very important role, especially for durable items. The influencer, being women in most cases, still checks out the product before the final purchase is made. This insight has been used by Cromato merchandise the store and save space. The other important insight was that when consumers look at national electronic chains, the two main factors looked at when making the purchase decision was price and the advice offered in-store.

To compete with online stores, Cromais looking to leverage the presence of its 100 stores spread across 16 cities. From 21st April, 2014, the company will deliver products in these 16 cities within 12 to 24 hours. The company’s website allows consumers to send personalise messages when delivering gifts to friends and family. Joshi believes that despite the online retail onslaught, brick and mortar stores will survive. They are already using social media like Twitter and Facebook to market their products and price-points. Joshi also pointed out that since 80 per cent of revenues for the major consumer durables companies comes from the top 25 Indian cities,Cromawill only open stores in these cities. The company will cater to the rest of the country through their website. The company has a presence on Amazon and eBay and is currently negotiating with Snapdeal and maintains the same price-points online and in the physical stores.

Tracking the customer
With a customer base of over 3.5 million, Cromaextensively uses the feedback from their customers. Customers are divided into four categories and their buying frequencies monitored. Triggers are sent out to re-activate the customer. Feedback is sought from customers at various touch points such as in-store, on delivery, websites, via SMS and social media. The data collected is used in designing Cromaprivate label products, which today contributes to sales of Rs 200 crore and Joshi believes that the brand still has a long way to go. Joshi says that every Cromaproduct has “something more to offer than normal brand products and is priced 10-15 per cent cheaper.” He adds, “In certain categories, like foot spas& steam inhalers, we have no competition.”

The CromaDifferentiator
Joshi says what differentiated Cromawas the store ambience, staff and the range of products. Cromawas also the first to offer cash back incentives to the consumer.

The company is also looking at the lounge concept, where the consumer would be able to browse the latest tablets over a cup of coffee. Joshi says that the company’s proposition “We help you buy” has continuously evolved to engaging consumers.

The Omni-Channel presence
For Croma, an omni-channel includes both their website, and their kiosks. Leveraging the skills of Tata’s TCS, Cromahas developed a kiosk, which can be easily installed at airports, railway stations and even canteens of big corporate houses. With the help of mobile devices, consumers can scan QR codes and products can be delivered to the consumers at their desired locations.

Post-purchase engagement
This involves using electronic media, the company uses programmes which are gender- based (on Valentine’s Day), ethnicity-based (for Gudi Padwa, for instance, the company is using Maharashtrian last names ending with -kar  in their database to send specialisedmessages), occasion-based and catchment-based spotting where consumers in a particular locality are invited to visit stores close to their homes.

Ajit Joshi was speaking on ‘Building Brand Loyalty and Reading The Consumer’s Mind’ at the Pitch CMO Summit 2014 in Mumbai. The session was moderated by Subhash Kamath, CEO & Managing Partner, BBH India Pitch CMO Summit 2014 was powered by Colors.

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