Beyond discounts and cashbacks

Sales, discounts and the much more recent cashbacks might be a big bait for major brands to lure in shopaholics. Especially for the likes of Myntra, Flipkart and Snapdeal and the multitude brands that retail through them, offer anywhere from 20% to over 60% off on purchases. But for niche brands that cater to a discerning set of consumers, the discount and cashback attraction carries not much weightage. Or so it appears.

Niche brands feel that its a myth that discounts and cashbacks are irresistible for consumers and brands that stay away from the same can lose traction.

According to a study by retail technology company Ace Turtle, which gathered sales data of one million products across the brands sold online during 26 mega sale days and 217 non-sale days, the orders increased by over 417% during the sale event days. According to Yash Kotak, co-founder and director of BOHECO Life, which is into products derived from hemp, this speaks volumes about the Indian consumption pattern and thus certain brands keep providing year-round discounts. "It's certainly not a practice that niche brands follow. This trend I believe is a slow poison. Discounts earlier used to be seasonal in nature, whereas now the equation has changed because they have become constant. This has made the customer loyal to discounts and not to brands."

Says Harsh Shah, co-founder of Fynd, "Certain brands are realising that discounts are not a sustainable solution. The core premise of any discounts or cashback is that the customer gets a sense of paying less. Using this framework, EMIs are gaining in popularity."

According to Pallavi Barman, head of marketing and operations, HRX, brand stickiness can be built to enjoy consumer loyalty and longevity by allowing for the ease of navigation. "A consumer should be able to call out for a particular product and should also get it. The search for say red shoes should throw enough and convincing options."

Agrees Kotak who feels a great way to differentiate one brand from another would be the product mix. "If a brand can make available a wide range of products as per their target audience's taste, then the consumer will spend more time with the brand. In a lot of cases if the product is something that the consumer believes in then he is willing to spend irrespective of the sale/discounts/cashbacks."

Experts feel that the Indian retail market (both online and offline), which according to Assocham and MRRSIndia.com estimates, is expected to reach $1.1 trillion by 2020, being relatively away from discounts and cashbacks and having a deeper focus on product innovation can fetch real rewards.

Says Dilip Kapur, president, Hidesign, "We have been averse to discounting. Our customers are offered value through new design-led collections eight times a year that speak of innovation, handcraftsmanship and the naturalness of vegetable tanned eco-friendly leathers."

Experts say that today's consumers often look for an experiential shopping experience coupled with a good deal of storytelling by the brand and interactive engagements.

"Every consumer likes it when he/she is made to feel special. Whether it is through a special coupon code or through a special invite for an exclusive event as both build engagement and keep the consumer hooked. We curate many such coveted events for our consumers. These range from special Meet n Greets with Hrithik Roshan to plush closed-door exclusive experiences," says Barman.

Kapur believes niche brands focus on standardised and personalised service and storytelling through products to help enhance the experience and engagement. "We build experiences around our core values of ecology and craftsmanship through contests that focus on these values.

According to Kotak, their innovative range of hemp-based edibles combined with the story of being a socially responsible brand is something the consumer appreciates. "Today, fact tells and story sells and a combination of the two is a great value proposition for the end consumer. We highlight the underlying purpose of the brand through channels such as workshops, talks, activations, etc."