Boston Days - Part 4

The USD 10 Airport shuttle ride. And What It Taught Me About Loyalty Tiers.

(I am writing “Boston Days” as a series of articles for quick reference for myself and other retail pilgrims. This article covers the “Retailer’s focus towards Consumer Loyalty”)

The airport shuttle from Boston Logan to my hotel was a shared one.

A van, rather than a cab. And at the wheel was a lady driver who, without being asked, helped me load three weeks’ worth of luggage into the back — heavy bags, packed for a long working stay — with the kind of quiet efficiency that makes you feel looked after before you’ve even sat down.

The exterior of the vehicle carried the branding of Holiday Inn — clean, recognisable, the unmistakeable IHG logo doing exactly what logos are supposed to do.

Inside, already seated, was a couple. First-time visitors to Boston, though they had lived in the US for over two and a half decades — originally from Dallas, Texas. Warm, curious, easy to talk to. We fell into conversation almost immediately.

And then came a moment of mild confusion.

The couple were headed to the Marriott. I was headed to the Holiday Inn Express, next door. The driver, to her credit, sorted it out quickly — but for a few seconds, all three of us were momentarily uncertain about the sequence of stops.

I explained to the couple that the shuttle served both hotels as part of a shared airport transfer arrangement — a practical, cost-efficient solution for properties in close proximity.

What stayed with me, though, was not the logistics. It was the pricing.

USD 10. For both.

The Marriott guests and I paid an identical flat fare, rode in the same vehicle, loaded bags in the same hold, and were dropped at adjacent lobbies within minutes of each other.

The Marriott couple had chosen premium — a globally trusted brand, a higher nightly rate, and the reasonable expectation that a more expensive stay would reflect itself in the quality of every associated touchpoint.

I had made a different, deliberate call. Value-driven. Functional. Perfectly suited to a three-week working visit for a senior leadership programme.

But the shuttle made no such distinction.

And as I dragged my bags through the Holiday Inn lobby that evening, my mind — as it almost always does — travelled home. 

To Indian retail. To our loyalty programmes. To the elaborate tier architectures we have built, named with such aspiration, and then quietly failed to bring to life on the shop floor.

Shoppers Stop’s First Citizen Club runs across five named tiers — Classic Moments, Silver Edge, Golden Glow, Platinum, and Black — each defined by escalating annual spend thresholds. Pantaloons segments its Green Card membership by spend. Lifestyle’s Inner Circle moves loyalists deliberately through Silver, Gold, and Platinum designations.

The nomenclature is aspirational. The investment in building these structures — the CRM systems, the points engines, the tier communication — is real, recurring, and significant.

And yet.

The Platinum First Citizen member frequently stands in the same billing queue as the Classic Moments enrollee. The Golden Glow loyalist receives the same carry bag, the same counter engagement, the same fifteen-second farewell as the walk-in customer who signed up at the door twenty minutes earlier.

The tier lives in the database. It rarely survives the journey to the shop floor.

The Dallas couple and I paid the same ten dollars. The shuttle, to its credit, never pretended otherwise. It was a logistics vehicle with a flat fare structure and no aspiration to be anything more.

A retail brand’s Platinum member, however, has been explicitly promised something more.

The more important question — the one that stayed with me long after I had unpacked and settled into my room — is whether our stores are actually delivering it.

(I am writing “Boston Days” as a series of articles for quick reference for myself and other retail pilgrims.)

Read Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8 and Part 9 here.

Does Loyalty still exist?

I was speaking on a Panel Discussion last week at a conference hosted by Asia Retail Congress at Mumbai with some fantastic speakers from the Indian Retail Ecosystem, where the topic for us was to discuss Customer Loyalty. While preparing the points to ponder, I was wondering whether Loyalty still exists in today’s context. Well, yes – it sounds crazy if I say there is no Loyalty in the consumer business today. Don’t believe me? Take a look.

The toothpaste and toothbrush – look how consumers get swayed by newer options and attractive advertisements? There was a joke that a dentist/compounder who would appear in such an ad for toothpaste was once seen wearing a stethoscope! The body wash/soap – the options we see at supermarkets. The clothes we wear – this one’s interesting. Let me ask you, is the dress you are wearing right now – was it the same brand that you purchased most recently? If yes, you are part of a small minority of consumers who are still brand loyal. The so-called disruption by new-age startups who thundered the e-commerce world a decade back and continue to bleed in billions – do consumers have any loyalty still left over? Again, consumers prefer to buy from trusted websites (is Trust=Loyalty? Later, on that) where they could probably have the option of returning faulty goods sold by unscrupulous vendors on whom the Amazons & the Flipkarts don’t have much command. A Big Billion Day or an interesting Sale period – and consumers swing their loyalty there.

Let’s look at a few touchy, personal products. Let me start with Gillette which I have personally been using for the past 2 decades. I started with a Presto plastic shaving razor worth Rs. 10 twenty years back. I am now using the “Mach 3 Advanced” which is some Rs. 350+ per razor! And while the Advertisement claims a 30-day use, it still warrants “Conditions Apply” such as the skin tone, number of times repeating the shave and hard water. For me, this is one classic case of Customer Loyalty where consumers have continued to stick on with the Brand and its extensions such as Shaving Gel, After Shave, Body Wash & so on. Let’s look at Sanitary Napkins. Women I know (and I don’t discuss this with many!) use a particular brand/model – purely because of operational comfort. Interestingly, Brands which come in with alternatives offer sample packs or ones with fewer pads, so consumers can perhaps try and decide. Still, the loyalty is extreme. Women continue to stick to their favourites.

Look at Café Coffee Day. With 1,500 cafes across India over 2 decades, the brand continues to drive at least one lakh consumers every day and sells over 50,000 cappuccinos daily! Cut to competition – the nearest café chain Starbucks has just over 100 cafes pan-India although the argument is that their daily turnover per café is 3x of CCD. Indeed, their food prices are 3x of that of what we get at CCD and their beverages, at least 2x. So, that explains.

Royal Enfield was an underdog seven years back, selling 1 lakh vehicles per annum. Now, they sell almost 1 lakh units per month. Today, RE sells more motorcycles worldwide than all other premium brands put together – some feat this.

So, does Loyalty exist? I have a hung verdict here t least for now. The house is definitely split over this issue. For certain products and categories, consumers show extreme loyalty while for some, there hardly exists any loyalty. Travel, Food, even Luxury – take your pick. Look through the lens and you’ll see how fragmented the so-called Customer Loyalty is. And Loyalty Cards – well, I shall write a follow-up column on this shortly.