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Retail Business Environment

Notes For instance, the address 123 Main Street can be changed to 123 Main St. and appear as a new
account. Referring one account address as a home address and one as a work address gives
customers another way to get around the program. Customers will even place their next-door
neighbor’s address into an account if it means getting a customer reward. Cookies, which can be
placed into a customer’s computer to track whether the customer has been to a site, can easily be
either turned off or deleted. And, the customer most likely to abuse a referral program certainly
knows his way around cookies as a means of detecting him as a new or existing customer.
Referral programs work best online when companies either spend time designing a good database
program that will cross-reference several fields, including credit card numbers if applicable, or
check referrals manually. Hire a database person to look at each referral and check against
several fields. Checking a referral program helps spot patterns of abuse that an automated
system will not pick up, such as names of people or techniques that can make it through the
system long before they are discovered.

Everyone likes paying less. So just as in the bricks-and-mortar world, coupons offer an easy
means of acquiring and retaining customers. The offline coupon route starts with retailers
typically defining a goal for a coupon, and targeting a demographic through a list buy, ZIP code
target or newspaper insertion. Then, coupons get printed on a piece of collateral with a barcode
assigned to apply the discount at the register. The bricks-and-mortar road offers a measure of
control, since the customer has to go to the store and be seen to redeem a printed coupon,
reducing the risk of fraud.
However, the online world is, once again, different. An online retailer can target a demographic
through list buys, niche Web sites and ad buys as well. But there is no printed paper for the
coupon, only a code entered and redeemed by customers at the virtual checkout line. Nothing
prevents a coupon code from popping up on consumer Web sites, news groups or in e-mail
forwarded from one customer to another.
Thousands of Web sites specialize in posting coupons for the world to use. Even customers not
likely to clip coupons in the offline world find it tempting to save an additional $10 at an online
store by checking these coupon sites. And just as with the referral program, first-time customer
coupon offers encourage the creation of several user names and accounts to meet the requirements
of a new customer. With those problems lurking, developing one-to-one coupon programs that
generate unique coupon codes per target vs. multiuse coupon codes per campaign becomes vital
to the success of a coupon campaign’s goals.
While somewhat overwhelming, offline retailing techniques still can be applied to Web stores.
You can still thank your customers, and buddies can still help buddies. Online retailers simply
have to change their way of thinking slightly. With thousands of customers in your online store
each day, 24/7, the possibility for abuse of traditional programs is much higher.
Marketers have to stay about 50 steps ahead of the game instead of just ahead of the game. Many
more techniques can be applied to online retail than offline retail. Master the basics, and you
will be a pioneer.

14.4 Building from the Future: Learning from the Past

 In the Hyper growth phase during 2005-2007, organized retailers committed strategic and
operational errors.
Hyper Growth Frenzy-The Indian organized retail revitalization is already reflecting in
improved financials over the past few quarters and this trend will sustain in the coming
periods as well. However, the sector under went a hyper growth phase during 2005 2007.
The companies got carried away and committed strategic and operational errors, which
they subsequently realized.

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