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This puts pressure on businesses to put in place mechanisms to listen to her, Antoine De Riedmatten tells Masoom Gupte
You have worked extensively with players in retail, travel and tourism, and leisure industries. What are the learnings that are applicable across these sectors?
These are consumer-focused businesses. Each of these sectors depend on loyalty and allied programmes and must build brands to stand out. Each of them comes with a service promise.
Between retail and tourism, there is not just cross learnings but also cross business. Tourism today is a lot about shopping. The old model of tourism was about people going to see old monuments. The new model is about people travelling for entertainment and shopping. This is possibly why Singapore is a huge tourist draw, based entirely on the shopping driven tourism model.
There is a rise in tourism numbers in India. But it is reflected mostly in the hospitality sector with hotel chains making their presence felt. Retail is yet to play a part there. However, India as a destination has ample scope to develop tourism around indigenous shopping experiences too.
All these industries are co-related and can play a role in developing each other. For instance, hospitality is one space where Indian brands are gaining reputation outside India. So the Oberoi hotels and the Taj Group are known quite well beyond India. That is not quite the case with Indian retail or consumer products brands as yet. These hotels can, in themselves, be a huge draw and help develop other sectors.
You have said that businesses have moved from being consumer centric to being consumer driven. Could you elaborate?
Traditionally, the FMCG companies would make products in huge volumes, sell them to their wholesalers, who in turn sold to the retailer and finally to the consumer. At every level it was the supplier who decided what would be sold. This is changing. Now the consumer's choices have grown exponentially. She can shop 24X7, either in a store or online or even when she is travelling abroad. For instance, take the mobile phone space. She is jumping from basic phones to iPhones. Even within the rural markets, there is information available about the latest trends. She is clear on what she wants; you can't sell her what you want to anymore.
The other aspect is that consumers are increasingly making their own products. For instance, earlier a car company may have said that it has a car, which is available in black and white only. Buy it or leave it. Today , the consumer decides the colour of her choice, thus, driving the direction of business now. This puts pressure on businesses to put in place mechanisms to listen to the consumer.
One aspect of being consumer-driven is also about encouraging co-creation. What are the various areas where co-creation may be encouraged?
I'll give an example. Coca-Cola has created machines in the US which it plans to put in restaurants. These machines have 125 flavours of drinks. If you try to sell through any trade channel, there is a limit to which you can sell the number of flavours. But with the new machines, the choice can be very wide. The interesting part is the iPhone app that was created corresponding to the machine wherein one can put in a recipe, mix flavours and get it from the machine by transferring data and not by physically choosing the flavours. This is a typical example of co-creation.
This can work not just in product creation but also in terms of designing, advertising and communication. It can even give you access to a much wider talent pool.
How does one build on this two-way communication?
One way is the social media - Facebook, Twitter, blogs and the likes. Companies today have dedicated teams listening to conversations about their brands online. What is driving this requirement to listen in is the need for companies to react quickly. One can't afford to assimilate data over months, send out questionnaires and analyse responses over months. Things must happen real time. You must collect data fast and react faster. Any delay means you are losing market share, brands may be getting eroded.
At what point does one draw the line with customisation, given that beyond a point it can mean compromising on processes and systems that have been perfected over the years?
The answer is profit. Customise only so long as it doesn't hurt your profits. It works better for some industries than others, depending on the margins. For instance, it is big in the luxury business because the client is happy to pay for personalisation. This works for luxury brands across the gamut from apparel to cars to mobiles.
From a company's perspective, it is important to be coherent about the DNA of your brand. If it is cheap, value for money, customisation is not for you. If you stand for customer experience, values like making the consumer feel special, it is very clearly meant for you.
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Finger on the shoppers' pulse
* Every year, prior to the year-end holiday season, Deloitte member firms conduct surveys among thousands of consumers to gauge shoppers' expectations and intentions for the heaviest shopping season of the year. The broad range of data collected by the survey is a valuable resource for regional and national retailers, industry executives and the media |
* Antoine de Riedmatten, an audit partner at Deloitte France with over 22 years experience, has led this survey conducted across Europe for several years. The survey provides insights into what consumers plan to buy, what channels they are most likely to use, their receptivity to e-commerce, traditional trade, modern trade etc. It also helps understand respondents' reaction the prevailing economic pressures
* Recently, the firm started including data and observations about how consumers use technology and social media while making a buying decision. These trends are indicative of the consumers' constantly evolving personality
Speaking about the luxury customer, how differently does she behave depending on her geographical location?
Luxury brands may sell in all countries across the world. They rarely stock the same products in all stores. For instance, the products available in a store in France will be different from those in another store in the same market. The assortment practices depend on individual location experiences. It is as much a factor of cultural norms as it is of the customer profile.
For example, the Indian luxury consumer is quite young. You need to cater to her choice, possibly by stocking more accessories or brighter colours. The benefit of this consumer base is that if you manage to catch her young, she will stay with you for a long time.
What stays constant in the luxury market is the brand experience. The design, the aesthetics, the ambience will see a level of consistency. This perpetuates the brand in the consumer's mind. If she travels abroad, she will explore the brand for more variety and possibly over time demand the same back home. In the luxury business, the brand can control everything: the stores, locations, staff. It is not a volume-driven business. Choosing the retail location for luxury is another critical aspect of the business.
How important is customer experience for the day-to-day shopper at the other end of the spectrum?
Everyone has been speaking about customer experience as being the cornerstone of modern trade. However, the best experience is offered at the mom and pop stores. They might have a few lessons for the bigger chains. These stores know their consumers, at times even several generations of the same family. Retail is not just about choice but about the way of selling. These stores may offer less choice but they know what consumer wants. For me a trade channel is not good or bad depending on its classification as modern trade or general trade. It depends on where you can sell more convincingly. That is where the customer experience is heightened as the consumer gets a helping hand to make her choice.
