Report on Customer Loyalty Program- An emerging tool for

customer retention for “Westside”.

Submitted to: Submitted by:

Dr. Piali Haldar Kanika Gupta (2k91a43)

Kapil Ramnani (2k91a44)

Kiranjyot (2k91a46)
Lokendra Bhukar (2k91a51)
Meenakshi Shah (2k91a53)
 INTRODUCTION

Apparel business has grown to become highly competitive, and retailers have to mull strategies. Having
a competitive edge in the business world is vital. Rather than relying on other tricks of trade, retailers
prefer to establish a one-to-one relationship with their customers to improve their sales performance.
With an intention to enhance their customer base significantly, retailers seek for Loyalty Programs to
gain direct access to their customers. It enables them to identify, communicate, and market to the end
users, and also maintain the distributor relationships at the same time.

As per a recent market survey, considering their buying attitudes, apparel shoppers can be classified into
three main categories. Fashion forward customers, looking for latest style clothing, conservative
customers who prefer a traditional look in their garments, and value driven consumers who give more
preference to value and comfort comparatively over style. Fashion forward customers comprise of 16%
of the population, while conservative customers make 34%, and the remaining 50% is of value driven
customers. Of this, conservative consumers are more motivated by the loyalty programs, and store credit
cards.

Diverse Loyalty Programs

A survey states that 76% of the retailers, and 75% of the shoppers are engaged in one loyalty program.
One third of the customers are involved in multiple loyalty programs. Shoppers stop claims that almost
60% of its sales are from loyalty members. Many kinds of loyalty programs are followed. As customers
bought apparels, they earned points that can be redeemed as merchandise rewards, or travel. Points can
also be accumulated to acquire a more valuable reward later on. Special promotions are also offered
during days important to the consumer such as anniversary, birthday etc. A top-up discount based on the
frequency of visits can also be offered.

Are brands betting on loyalty programs?

Brands also need to foster the loyalty of their customers so as to retain them, especially during tough
times. Notable brands such as Westside, Adidas, Levis, and Spencers Retail have managed to keep their
customer base intact through their loyalty programs, delivering immediate value, preference and
personal significance. Product launches planned intermittently, and innovative loyalty programs
facilitated them to ride the tide during recession.

Loyalty programs help to create an emotional bonding, thereby resulting in a lifelong customer
relationship. They have gained immense popularity in the past decade. This is mainly due to the culture
of entitlement, wherein the customers believe that they deserve a special treatment over the normal
visitors due to their frequency in visiting the retailer. Retailers have learnt to smartly capitalize this
attitude of the customers through their creative thoughts. It might cost them a little, but brings forth
goodwill, and ultimately resulting in the long term relationship with them. They are now a key to
revenue growth of any business. Thus, it can be precisely called as a Loyalty craze.

ABOUT WESTSIDE

The Westside story: Fashioned to succeed

Style, affordable prices, quality have contributed to Westside's success in the retail fashion stores
busines

Style, affordable prices, quality — these are the factors that have shaped Westside’s success story in the
retail fashion stores business. Launched in 1998 in Bangalore, the Westside chain has, ever since, been
setting the standards for other fashion retailers to follow.

The Westside story really began in 1997, when the Tatas sold Lakme, their cosmetics business, to
Hindustan Lever and acquired the Britain-based Littlewoods retail chain. A new entity called Trent
Limited emerged from this move and Littlewoods was renamed Westside. Today Westside has seven
outlets, one each in Bangalore, Hyderabad, Chennai, Mumbai, Pune, New Delhi and Kolkata

Westside stands out from the competition for a variety of reasons. One is that a majority of the brands
the chain stocks and sells are its own, unlike retailers who store multiple labels. About 90 per cent of
Westside’s offerings are home-grown, and they cater to different customer segments. The other 10 per
cent includes toys, cosmetics and lingeri

According to Himanshu Chakrawarti, general manager, Trent, this arrangement has many advantages.
"Being a brand retailer, we are able to develop our style and image in a manner whereby customers can
build a relationship with us," he says. "We also have the flexibility of pricing and are able to fulfil the
promise of affordable style." Price is crucial in the Indian retail scenario and Westside’s focus on this
factor is part of the reason it increased sales in October-December 2001 by a whopping 71 per cent over
the same period the previous year.
Repeat customers — those who keep coming back to Westside — are another vital element in the chain
being a winning proposition. Simone Tata, chairperson, Trent, puts that down to giving customers
something to come back for: "We have something new every week." Mr Chakrawarti adds that
"ultimately it’s the products and their quality that makes customers return again and again".

Visit a Westside store and Mr Chakrawarti’s words are clearly confirmed. Each outlet blends products,
ambience, customer service and facilities to create a standout shopping experience. The stores are
spacious (10,000 to 20,000 square feet each), designed to look and feel international, and products are
displayed attractively. The Westside outlets in Mumbai and Hyderabad have an additional drawing card:
Taj Cafés that serve delicious pastries, sandwiches and coffee.

Westside has recently expanded its range of merchandise by offering outfits from some of India’s best-
known fashion designers, among them Wendell Rodericks, Anita Dongre, Krishna Mehta and Mona
Pali. This is an interesting marketing shift, since it means moving away from the chain’s only-our-own-
brands concept.

What was the idea behind the move? According to Mrs Tata, it is Westside’s response to the increasing
demand in India for designer lines. She says: "Designer wear is really an aspiration product, and it is
highly priced. We wanted to offer an affordable selection for weddings and parties, but since this is still
a very small segment we felt it was better to bring in established designers rather than do it ourselves."

The designers create collections exclusively for the store, and the prices for these are hardly eye-popping
(the Wendell Rodericks range starts at Rs600). Westside has managed to obtain this exclusivity at a
lower price because it has multiple outlets. "Designer wear for us is really, to use the phrase, ‘the cherry
on the cake’," adds Mrs Tata.

Facing the challenge

The greatest challenge for Westside in its quest for a place in the retail sun is not the competition from
similar organised players, but from the unorganised sector (98 per cent of India’s retail garment industry
operates in the unorganised sector). According to Mr Chakrawarti, the task at hand is to get people who
usually shop with unorganised players to visit organised stores such as Westside.

The general perception in India is that organised retailers are far more expensive than unorganised ones.
Westside’s response to this dogmatic view has been to connect price to quality. "We had to get
customers to realise that they were getting the latest style at very good prices, and in a comfortable
environment," says Mr Chakrawarti.
The other challenge for Westside is that the retail fashion business in the country is becoming
increasingly crowded with new players, Indian and foreign. Among the new entrants have been Wills
Sport, Raymonds (Be), Globus, Nike, Crocodile, Mango and, the latest, Marks & Spencer. But this does
not perturb Mr Chakrawarti, who says it’s ironic that while Marks & Spencer is actually a value-for-
money brand abroad, it has positioned itself in India as a high-style clothier, selling at prices way above
that of its competitors.

Customers are what everyone is after, and it is they that Westside is concentrating on. Continuing
research and surveys have helped the chain build on customer loyalty. "We’ve learned enormously
through the years," says Mrs Tata. "It is absolutely essential to listen to customers — what they want in
terms of style and price, and to understand the demographics of it all. It’s continuous learning."

An example of this commitment to customers is in the small matter of Westside tailoring its products to
suit particular regions. The chain learnt that customers in south India tend to be smaller in size than their
counterparts in the north, and in some cities women rarely wear sleeveless dresses. Knowing these facts
has helped Westside get the right balance in terms of products and the people they are intended for.

An assured return-and-exchange policy reinforces customer confidence in the chain. No questions are
asked and a bill is not necessary. "We can do this only because it is our own merchandise," says Mr
Chakrawarti. "Many-brand stores are governed by the exchange-and-return policy of the various labels
they sell."
 SOME OF IT’S LOYALTY PROGRAM
Clubwest

Another winning Westside idea is Club West, a customer loyalty programme launched in May 2001.
The 30,000-plus members of this club get rebates at restaurants and on holiday packages from the Taj
Group of Hotels, home delivery of alterations, and best of all, special shopping hours on the first day of
any discount sales event organised by the chain.

Clubwest is a two- tier program, which consists of clubwest classic and clubwest gold.
HSBC Westside credit card

HSBC Westside Co-branded credit card

HSBC and Westside bring the HSBC Westside Credit Card, a card that is designed to complement the
lifestyle and also serves as a symbol of recognition and status, across the globe.

Exclusive Benefits

Exclusive Sale Previews at Westside

Home delivery of altered garments

More Reward points for Westside shopping

Complimentary gift voucher on joining

Exclusive Billing Counter at Westside

Rewards Program

More Rewards points for Westside shopping

Through the exclusive reward point programme, the more customers will spend, the more they will save.
For every Rs 100 spent at Westside stores using the HSBC Westside Co-branded Credit Card, customer
receives 4 reward points. This is not all, for every Rs 100 charge to the credit card outside Westside
stores – e.g. usual spends like dining, travel etc – receive 1 reward point.

The additional 3 reward points for purchases made at Westside stores will be credited to the credit card
account once every month. These reward points can be easily redeemed as Westside Vouchers by calling
the Customer Service Officers or making an online redemption request through www.hsbc.co.in. The
reward points are redeemable against Westside vouchers of equal value.

Earning Rewards points

• Get 4 Reward points for every Rs 100 spend at Westside stores

• Get 1 Reward point for every Rs 100 spend elsewhere

Redeeming Rewards points

The points are redeemable against Westside Gift Vouchers of equal value.

Exclusive Features & Benefits

Complimentary Gift Voucher worth Rs 150/- on Joining

The Gift Voucher worth Rs 150/- will be valid on purchases of Rs 750/- or more at all Westside stores,
using the HSBC Westside Credit Card. The Gift Voucher is issued by Westside and will be governed by
the Terms and Conditions mentioned on it. All queries and complaints pertaining to the issue/
redemption or terms governing the Gift Voucher will have to be taken up directly with Westside and
HSBC will not accept any liability pertaining to the same.

Other benefits on shopping at Westside stores

• Exclusive Sale Previews

• Home delivery of altered garments
• Exclusive billing counter

Other credit card benefits

Lower your interest payments

Reduce your interest payments with our lower interest options:

 • Balance Transfer
• Convert the purchases into EMIs with Loan on Phone

Online Access to the credit card account

Free 24x7 online accesses to the credit card account through HSBC Internet Banking. Customer can
view unbilled transactions, previous statements and even pay the utility bills online for free.

Cash advance

Get instant access to cash, round the clock, at close to 1 million ATMs worldwide.

Zero Lost Credit Card Liability Benefit

Credit cardholders have zero lost-credit card liability after the loss of the credit card has been reported to
the Bank in writing or to the VISA Global Emergency Assistance Helplines. However, customer will be
liable for all charges incurred on the credit card before the report of the loss of credit card.

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