Ace retailer Kishore Biyani’s maxim, “getting the maximum share of the consumer’s wallet” is being followed by retailers of every colour and hue. Retailers are using every tack from the textbook to entice more and more footfalls into stores. Giving customers access to credit and more disposable cash is one of them. Shoppers buy more and keep coming back. From a mere plain vanilla loyalty card with bonus points, chains are now offering co-branded credit cards, private label cards, even consumption and personal loans. “We have to fuel consumption. To do that one has to provide the financial resources for customers to buy,” reasons Rajan Malhotra, CEO, Big Bazaar. The financial resources to fuel consumption across the vast retail network of the Future Group are being powered by Future Capital. Rakesh Makkar, CEO, Future Money is using all his financial acumen garnered over previous stints at Temasek and Citibank to help the group’s various formats push sales. With over 180 million footfalls annually flocking to Future Group’s formats, Makkar says it’s a huge opportunity to promote financial products that benefit various formats. “It’s much cheaper to acquire customers inside the stores than go outside. So if any of the formats want to promote, we can provide attractive offers like zero percent interest schemes,” explains Makkar. He adds that previously the formats had different financiers inside the stores, but they were just providing finance and not pushing sales. Now with Future Money kiosks inside Big Bazaar outlets and a network across all formats, Makkar is ensuring that whatever the need, resources are available on-the-spot. “Once you have the customers we are looking to cater to their shopping needs, big or small,” says Malhotra. As retailers increase the number of categories, including high ticket items, financial tools like co-branded credit cards and even private label cards are coming in handy. In fact, co-branded credit cards have become an attractive option by retailers to woo customers. Govind Shrikhande, CEO, Shoppers Stop believes a co-branded card provides the ammunition to get their captive customer base to spend more with ample offers and promotions thrown in to make it attractive. “We are pushing our co-branded card harder now as one can push high ticket items in the stores with offers like EMIs and personalised service,” says Shrikhande, adding that 20% of the chain’s one-million loyalty card holders own co-branded cards. Co-branded cards also allow customers to make purchases outside using the card and garner points which can then be used to shop at the respective format. From the plain loyalty card to co-branded credit card, the trajectory is now moving towards private label credit cards. Private label cards or store cards is a popular concept in matured retailing markets in the West with retailers like Marks & Spencer, Circuit City and Best Buy providing private label credit cards to its customers. Shrikhande says that the company is toying with the idea of launching a private label credit card in the future.
“One obviously needs a large base of customers to launch a store card. So we are assessing the risk-reward benefits of such an exercise,” says Shrikhande. However, store cards have benefits as it becomes a great branding opportunity for the retailer, with top of mind recall with deferred financing programmes offered to customers. For example, Future Card gives exclusive offers, discounts and gifts for customers, not only within the formats but even outside. Given that the store card becomes a direct bridge between retailers and customers, the platform can be used to understand the shopping patterns, communicate and market better to target customers, says Makkar. Even as retailers rush to launch co-branded cards and even store cards, the fact is India still has a low penetration as far as plastic money is concerned. So disbursing loans and cards to drive consumption may well push the off take inside the stores in the short term, payments of dues and collections is an all together different game. Like everything else in retail, it’s learning curve for players.