Big Bazaar has come up with a wonderful scheme. For a purchase of 1,000 INR, you can avail free 1kg onion and Potato for the next 52 weeks.
Even by the most conservative estimate, 52kg of onion and 52 kg on potato will be worth 1,500 INR.
However what makes the whole scheme interesting is how much this can change the buying pattern on indian consumers.
1. You need to visit the store every week. Which effectively means that you will not only make your monthly purchases, but also your weekly purchases there. Hence a shift from low margin commodities like groceries to higher margin perishable fruits and vegetables.
2. Wednesday, being in the middle of the week, is typically a lean day for retailers. Hence this attractive promotion offer would help them balance the crowd better (a customer who has already made his purchase on the weekday might not visit the store again on the weekend) Thereby enabling them to service more households without having to take the pains of visiting the store.
3. 52 weeks is a long enough time to permanently change the buying pattern of the customers.
Future group (its promoters) have launched a prepaid card (which also offers a cash discount of 5% on all sales). A consumer usually is in the hurry to consume the balance in a pre-paid card. Hence he/she effectively is expected to visit the store repeatedly. Also like credit cards, many people tend to spend more when there is an option of a cashless transaction.
I really feel that these 2 schemes are really innovative measures taken by this retail chain. They will not only increase the footfalls and billing but also change the consumer buying behavior completely.
Ankur Aggarwal
sree
Sandip Chaudhuri
vbr
Skabeesh
shobhendrasrivastava
Ankur – I loved the analysis you provided. I agree that this will definitely change the way some of the upper middle class Indians shop their weekly things. Don’t you think the Indian market is shifting more toward a “spending” kind rather than a “saving” kind?
I am thinking of the repercussions of such a market in India. Of course, the “spending driven” economy of US pretty much went out of control right now.
You are studying all this – I am sure you have a more in-depth idea of this!
Comment by Kokonad — April 7, 2009 @ 12:06 am
thanks….
There are all signs of this transition happening, however i believe that there is a decade before we can truly label Indian economy as consumerism driven.. afterall the saving rate is still 30%+
Comment by Ankur Aggarwal — April 7, 2009 @ 9:56 am
Great analysis Ankur.. I really loved it.. and it brought smile on my face to think how consumers can be manipulated so easily by these business houses.. Thanks for sharing this view.. Looking forward for more such out of the box analyses..
Comment by Brajesh — April 7, 2009 @ 12:16 pm
thanks man.. so whats new.. how is life
Comment by Ankur Aggarwal — April 7, 2009 @ 12:18 pm
Nothing new boss.. it’s the same old story here.. BTW where are you going for your summers?
Comment by Brajesh — April 8, 2009 @ 11:48 am
i am in mumbai for my summers… its a startup rupee talk
Comment by Ankur Aggarwal — April 8, 2009 @ 11:59 am
Hey ankur
good observation, and they are right to attract people to their stores and added footfall which most often converts into sales,bt their products are moreso use and throw cheap stuff or lower quality stuff.
one more interesting thing my friend told me that there are retail stores at wholesale rates at dana bandar (masjid bandar)a wholesale market must visit one sometime.
Comment by Prax — April 8, 2009 @ 1:48 pm
summers are the worst time to be in mumbai
do goto elephenta caves on a weekend maybe … its quite nice
Comment by Prax — April 8, 2009 @ 1:49 pm
future bazaar has different chains that target different segment of customers… hence maybe big bazaar is not the right choice for you…
btw did you know that the store layout was deliberately designed as cramped and noisy… the idea was to simulate mandi like situation which gives customers a mental perception that this is a discount store…. which gels well with their brand image.
Comment by Ankur Aggarwal — April 8, 2009 @ 1:54 pm
commute itself is draining all energy out of me
lets c how the rest 7 weeks turn up.
i have not been to elephanta caves, but will try
Comment by Ankur Aggarwal — April 8, 2009 @ 1:56 pm
now u realise the bane of the mumbaikar …
travel is horrendously bad and most people do it on a daily basis
on bb god i hate that mandi simulation thing ,and the crouds are simply maddening sometimes especially when the place gets jampacked.
Prefer Reliance super for that matter!
prefer going to wholesale supermkts that i mentioned before as they are in one of mumbais oldest wholesale mandis and things are a lot cheaper there than bb!
Comment by Prax — April 8, 2009 @ 9:11 pm