A Summer Internship Report on

„A Comprehensive study of Loyalty Programme at

Lifestyle stores, and a competitive angle for the
same‟
Submitted in partial fulfillment of the requirement

for MBA degree course.

By

Nayan Dharamshi

(Reg. No.: 0920317)

Under the Guidance of

Faculty Guide Company Guide

Prof. Bharathi.S.Gopal Mr. Jay Tak

Faculty, Dept. of MBA Regional Marketing Manager
(South)
Christ University, Bangalore Lifestyle Stores

CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT

BANGALORE - 560029
MBA 2009-2011
Contents

Certificate

Declaration

Acknowledgement

Executive Summary

List of Symbols and Abbreviations used

Illustrations, tables and charts.

1. Introduction
1.1 Introduction to the Study……………………………………………. 1
1.2 Need for the Study………………………………………………….. 2

1.3 Objective…………………………………………………………….. 2

1.4 Scope of the Study………………………………………………….... 2

1.5 Limitations of the Study……………………………………………... 3

2. Profile
2.1 Industry Profile………………………………………………………. 4

2.2 Company Profile……………………………………………………... 6

3. The Inner Circle- A Comprehensive Study
3.1 Introduction to TIC…………………………………………………… 9

3.2 Kinds of Queries handled at TIC……………………………………... 14

3.3 Types of Reports processed by TIC…………………………………... 15

3.4 Process Flows…………………………………………………..……... 17

4. Study of Loyalty Programmes of Competitors

4.1 Shopper’s Stop - First Citizen………………………………………… 20
4.2 Westside - Club West…………………………………………………. 23

5. Analysis

5.1 Research Methodology……………………………………………….. 25

5.2 Analysis of the questionnaire…………………………………………. 27
5.3 Hypothesis testing…………………………………………………….. 38

6. Findings and Recommendations

6.1 Findings………………………………………………………………. 41
6.2 Recommendations……………………………………………………. 42
6.2.1 Modification in Process to redeem points………………….. 42

6.2.2 Providing more offers/discounts for TIC members………… 45

6.2.3 Training and Counseling of TIC Executives……………….. 45

7. Conclusion………………………………………………………………………… 46

8. Bibliography………………………………………………………………………. 47

Appendix A: Questionnaire
 CERTIFICATE –FACULTY GUIDE

This is to certify that this internship report on the title ‘A Comprehensive study of Loyalty
management Programme at Lifestyle Stores, and a competitive angle for the same’ is a
bonafide work of Nayan Dharamshi under my guidance and support .This report is a part of
MBA course with specialization in Marketing stream and the content and the work done is
genuine with respect to the information covered and thought expressed.

Place: Prof. Bharathi.S.Gopal

Date: Faculty CUIM
 DECLARATION

I Nayan Dharamshi hereby declare that the project report titled ‘A Comprehensive study of
Loyalty management Programme at Lifestyle Stores, and a competitive angle for the same’
submitted for the partial fulfillment of the requirements for the award of the Master of
Business Administration is my original project work and has been carried out under the
guidance of Prof. Bharathi.S.Gopal, Faculty. Christ University Institute of Management and
Mr. Jay Tak, Regional Marketing Manager(south), Lifestyle Stores.

Place: Nayan Dharamshi

0920317
Date: CUIM, Bangalore
 ACKNOWLEDGEMENT

“Feeling gratitude and not expressing it is just like wrapping a present and not giving
it.”

While presenting this report, I take immense pleasure to express my deep gratitude towards
all those who offered their valuable time, taking this project to new heights, & complete it
successfully.

Firstly I am extremely thankful to Mr. Jeevan Loy, for providing me an opportunity to pursue
the summer project with Lifestyle Stores.

I would also like to express my thanks to Mr. Jay Tak, Regional Marketing Manager for his
guidance, constant support and motivation which inspired me to go the extra mile during this
project.

I thank all the employees and staff at Lifestyle stores and LMG who have provided there
assistance & shown their enthusiasm & interest. Without them this project would have not
been possible.

I am greatly indebted to Prof. Bharathi.S.Gopal for her valuable suggestions and backing up
during tough times of the project tenure.

Nayan Dharamshi

MBA-Marketing

Christ University Institute of Management

 EXECUTIVE SUMMARY

The project was undertaken as a part of summer training at Lifestyle Stores, Bangalore for a
period of 55 days.

This study is an attempt to assess the factors responsible for customer’s buying behavior and
its relationship to the Loyalty Programme of Landmark Group. The study focuses to provide
key insights about what customers think about the Loyalty Programme of Lifestyle stores.

The Loyalty Programme of Lifestyle Stores was studied and compared with Loyalty
Programmes of Shopper’s Stop, Pantaloon, and Westside. A comparative analysis was done
to highlight pro’s and con’s of the programmes.

Methodology: A questionnaire containing 14 questions each was given to 105 respondents

spread across the 3 Lifestyle Stores in Bangalore. Responses were taken from customers who
were members of ‘TIC’. The responses have been summarized and analyzed using SPSS,
tables, bar graphs and pie charts.

The key findings from the project are as follows:

 ‘Store Loyalty’ does not show up in the top 3 parameters that customers look while
choosing a store for their shopping.

 About 65% of the respondents had Shopper’s Stop FC card, which also happens to be
the nearest competitor for Lifestyle Stores.

 Most of the Customers who also have Shopper’s Stop FC card feel the points system
is better at Shopper’s than that at Lifestyle Stores.

 ‘Special offers for members’ was also a parameter where Lifestyle was missing out
when compared to Shopper’s Stop

 Customers feel that ‘Range of Products’, and ‘Availability of National and

International brands’ is what they look after the most while deciding their shopping
destination.
The following recommendations have been made:

 To modify the Points Redemption process ; i.e. integrating it with the billing rather
than a go-around at ‘The Inner Circle’ desk.

 Other than offering ‘Loyalty Points’ for members, Lifestyle stores should also
concentrate on offering more discounts and offers for members.

The recommendations were accepted by Mr. Jay Tak. Regional marketing manager (South),
and forwarded to the Group Head-Loyalty, Mr Debasish for further thought on the same.

On a whole the study was a good learning experience, referring to the interaction with end
consumers and the study of Loyalty Programmes of various luxury retail MBO’s.
 LIST OF SYMBOLS AND ABBREVIATIONS USED

TIC - THE INNER CIRCLE

LS -LIFESTYLE STORES

LMG -LANDMARK GROUP

FC - FIRST CITIZEN

GV -GIFT VOUCHER

SOH -SPACE ON HIRE

3PL - THIRD PARTY LOGISTICS

 TABLES AND CHARTS

Table 3.1a:Minimum Purchase Amount to become a member………………………….. 10

Table 3.1b:Tiering System…………………………………………………………….…. 12

Table 3.1c: Priviliges and Rewards across Tier System……………………………….… 13

Table 3.3a: Proforma of Conversion Report…………………………………………..… 15

Table 3.3b: Proforma for GV Sales Report……………………………………………… 16

Flow Chart 3.4a: Process Flow for Issue of new TIC Card ………..………………….... 17

Flow Chart 3.4b: Process Flow for Retail GV Sale……….……………………………… 18

Flow Chart 3.4c: Process Flow for Redemption of TIC Points…………………………. 19

Chart 4.1: First Citizen Contribution to Sales..…………………………………………. 22

Chart 5.2a: TIC Membership Duration………………………………………………….. 27

Table 5.2a: TIC Membership Duration …………………………..…………………….. 27

Chart 5.2b: Favourite Shopping Destination…………………..……………………….. 28

Table 5.2b: Favourite Shopping Destination…………………………………………... 28

Chart 5.2c: Favourite Shopping Destination………………………………………….. 29

Table 5.2c: Favourite Shopping Destination………….……………………………….. 29

Table 5.2d: Score Table for factors influencing choice of shopping destination…….. 30

Chart 5.2e: Distribution of membership of other Loyalty Programmes……………….. 31

Table 5.2f: Best Loyalty Programme……………………………………………..…….. 32

Chart 5.2f: Best Loyalty Programme ………………..………………………………….. 33

Table 5.2g: Aggregate rank table of programmes on various parameters…..………….. 34

Chart 5.2h:Loyalty card influence on choice of shopping destination………………….. 35

Chart 5.2i: Influence of interaction with Loyalty staff on decision to shop a the store.. 36

Chart 5.2j: Problem Solution and Customer Satisfaction Index at TIC desk…………. 37

Table 5.3a: Statistic Loyalty Programme Benefits in top 3 ranks distribution………… 38

Table 5.3b: One sample test Loyalty Programme Benefits in top 3 ranks distribution.. 38

Table 5.3c: Statistics for Loyalty card Benefits influence……….…………………….. 39

Table 5.3d: One Sample test for Statistics for Loyalty card Benefits influence …….... 39

Table 5.3e: Statistics for problem solution rating index………………...………….…. 40

Table 5.3f: One Sample test for problem solution rating index ……….………………. 40

Flow Chart 6.2.1a: Present Process flow for redemption of points…..……………….. 42

Flow Chart 6.2.1b: Suggested t Process flow for redemption of points………………. 43

Chart 6.2.1c: Pros and Cons of Suggested Process flow for redemption of points…… 44
1.1 Introduction to the study

Loyalty Management and Customer Relationship Management, have over the years, been
gaining a lot of importance especially in the Retail domain. In Luxury retailing the shopping
experience is more important than the product itself.
Today Indian shoppers have a plethora of choices to choose from for their next shopping
destination. Thus, it becomes very vital for any Retailer to have a loyal customer base, to
sustain in the competition. So also it is important to maintain a database of its loyal customers
and their shopping preferences, so that the merchandise and the services may be customized
to suit to the customers’ preferences.

The study is about the Loyalty Management Programme of the Landmark Group of
Companies- ‘The Inner Circle’.

This study is an attempt to assess the factors responsible for customer’s buying behavior and
its relationship to the Loyalty Management Programme. The study focuses to provide key
insights about what customers think about the Loyalty Programme of Lifestyle stores.

1.2 Need for the study

The need for the study is to understand the effect of Loyalty Programmes on Customer
preferences.
What role does a Loyalty Program plays in the Buying Process for the customers?
What factors influence the buying decision the most among Store ambience, staff service,
availability of merchandise etc?

The study tries to answer the above questions so as to contribute towards improving the
effectiveness of the Loyalty Program.

Page 1
1.3 Objectives of the study

Primary Objectives

-Analyze the effect of Loyalty Programme on Retail Customer Buying Behavior

-‘The Inner Circle’ members’ preferences and shopping pattern

Secondary Objectives

-Study of the Loyalty Programme of Landmark Group- ‘The Inner Circle’

-Check the effectiveness of ‘The Inner Circle’ desk

- Preferences and Shopping pattern ‘The Inner Circle’ members

-Competitive study and comparison with loyalty programmes of Competitors, and

suggest suitable changes to improve the Loyalty Programme of Lifestyle Stores

1.4 Scope of the Study

The scope of the study is Loyalty Management and Customer Relationship Programmes of
Lifestyle stores. However since the Loyalty programme for Landmark Group is same, the
same can be extended to it.

This research gives a broad framework of the Lifestyle Stores customer preferences and an
analysis of their buying behavior. This can be used as a reference in making changes in the
current activities in the Loyalty Management Programme.

Page 2
1.5 Limitations of the Study

 Among all other Landmark Group of Companies, considered only Lifestyle Stores for
the study.
 Non availability of CRM data of members on account of Company Policy.
 Time factor on the customers’ front acted as a barrier to get valuable insights on
detailed consumer preferences.

Page 3
2.1 Industry Profile

The Indian Retail sector has caught the world’s imagination in the last few years. Topping the
list for ‘most attractive retail destinations’ for fourth time in last five years, the Retail biggies
Walmart, Career four and Tesco already have their presence in Cash and Carry format, or
with strategic partnership with an Indian company. Indian retail sector has tremendous
potential waiting to be captured.

The growth in Indian Retail segment was mostly attributed to factors like increasing
disposable income, favourable demographics, changing lifestyle, growth of the middle class
segment, high potential for penetration into rural markets, and progressive FDI norms.

A Brief Overview of Indian Retail Sector

 Indian Retail segment is a USD 353 billion market, and is estimated to grow to about
USD 543 billion by 2014.1
 India is one of the 10th largest retail markets in the world.
 Organized retail constitutes about 5.6% in 2007 to 10.4% (revised after the
slowdown) of total retail sales.2
 The sector which was growing at a CAGR 10-12% during 2006-08, has experience a
slow down and is now growing at a rate of 8-10%.3
 Rated the best Retail Destination for the fourth time, in past five years by AT
Kearney.

1
IBEF Retail Report, May 2010.
2
KPMG and RAI survey 2009.
3
RAI Magazine- STORAI, March-April 2010.

Page 4
Highlights of Lifestyle Retailing format

 Change in consumer preferences and increase in brand awareness has given a great
scope for Lifestyle Retail companies like Lifestyle, Shopper’s Stop and Pantaloons.
 Increase in PDI in the middle income segment.
 Value retailing taking a front seat, as customers are giving more importance to store
ambience and the service levels than to the product itself.

Crystal ball gazing : Emerging Trends in the Retail Industry

1. Private labels will emerge strongly as competition to mainline brands.

2. Close working relationship between category managers of both retailers and main
Brands.
3. Web and social media networks will be new face of retailers and help them reachout
to specific target groups.
4. Third party logistics (3PL) companies would emerge as alternative option including
shared warehousing and logistics SEZs.
5. Retailers and brands will work together to reduce time to market and channel length
would be reduced.
6. Franchising will be the key driver of growth in years to come.
7. Many foreign brands will pack up and leave. New Indian value focused brands will
emerge in their place which will be mid to low end positioning.

FDI regulations hold a challenge for the foreign companies in the Multi Brand Retail format.
However the potential in the market is great and it poses great opportunities for the players in
the industry.

Page 5
2.2 Company Profile

Lifestyle International (P) Ltd is part of the Landmark Group, a Dubai – based retail chain.
With over 30 years’ experience in retailing, the Group has become one of the foremost
retailers in the Gulf.

Positioned as a trendy, youthful and vibrant brand that offers customers a wide variety of
merchandise at an exceptional value for money, Lifestyle India began operations in 1999 with
its first store in Chennai.

Currently there are 18 Lifestyle stores and 8 Home Centre stores across Ahmedabad,
Bangalore, Chennai, Hyderabad, Jaipur, Jalandhar, Mangalore, Mumbai, Pune, New Delhi,
Noida and Gurgaon.

Tag Line

Your Style, Your Store.

Mission Statement

Carefully Listen, Constantly Adapt, Always Deliver.

Vision Statement

To become the leading retail group in the Middle East and India, maintaining our constant
growth through our core, value and international brand business.

Page 6
 Concepts available at Lifestyle

Apparels

The Apparel section at Lifestyle offers a stunning range of wardrobe essentials, formals,
casuals, ethnic wear, sportswear and denim for men and women.

Baby Shop

Lifestyle's Kids' section offers a complete range of products for all children up to the age of
14 with leading international brands that are exclusive to Lifestyle. Discover your child's
favourite cartoon characters or get hold of Lifestyle's own brand called 'Juniors', which offers
an extensive range of merchandise across all categories. Find the complete kids’ range at
Lifestyle.

Lifestyle Accessories

An alluring combination of romance, endurance and infinite beauty, this section is more
about feeling beautiful than looking beautiful. The selection of natural, aromatherapy and
bath products in a range of colours and fragrances is unique and very exotic.

Handpicked from across the world, Lifestyle has an eclectic range of fine perfumes and
exquisite accessories.

Home Centre

Home Centre by Lifestyle is a one-stop destination for furniture, home ware and home
furnishings that epitomizes elegance, luxury and individuality. Home Centre houses a wide
range of contemporary and classic furniture, linen as well as other home accessories, thus
providing customers affordable complete home solutions.

Page 7
Shoe Mart

The latest models, elegant designs, an enticing range - Lifestyle's Footwear section houses an
extensive variety of brands to choose from.

Rooted in the belief that 'feet have feeling', the range of footwear is in step with what's
happening in the fashion capitals of the world. Apt for making a fashion statement, the
collection in this section will sweep anybody off his or her feet.

Scope of Marketing Department at Store Level

 CRM and TIC Management

 Vendor Management

 GV Sales (Retail & Institutional Buyers)

 Implementation of PROMO’s, etc

 Space on Hire (SOH), Sale of Space for advertising to various Brands.

Page 8
3. 1 T.I.C (The Inner Circle)- Introduction

The Inner Circle is the Loyalty Programme of Landmark Group (LMG). It provides various
benefits and privileges to the membership card holders as mentioned below:

 Privilege Points

 Gift Vouchers

 Exclusive Offers

 Special Invites

 Special Previews

 Reserved Car Parking

Page 9
Table Showing the Min. Invoice Amount to get a TIC Membership, and Points accrual
on purchase at LMG Stores

LMG Store Bossini Splash Max Lifestyle Spar CityMax

Min. Invoice
Amount 1000 1000 999 2500 999 500

Points Earned for

2 2 2 2 1 2
every Rs 100 Spent

Table 3.1a

Note: Discounted Products are also accounted to calculate points only at Spar Hypermarket.

Points Accrual & Burning

 Each point accrued is worth Rs. 0.70/- i.e. (1 Point=0.70 Rupee)

 Burn option – TIC gift voucher of Rs 100 for every 143 points accrued, which is
redeemable at any Lifestyle, Home Centre, Bossini, Splash, Max, SPAR and Citymax
outlet stores.

 The TIC membership is valid for Lifetime.

 Points can be redeemed till 12 months, from the month of accrual.

Page 10
Enrolment Process

 Eligible for a Free Membership Card for a minimum amount purchase from the LMG
stores (as detailed in the above table.)

 Paid card for Rs.150/- can be availed if the purchase value is less than Rs. 2500/-.

Data to be mandatorily collected from the Customer for the TIC Membership Process

 Name

 Address

 Pin Code

 E-mail

 Mobile No.

 Invoice Number

 Invoice Date

 Invoice amount

Page 11
Tiering System

Depending on the annual purchase amount by Customer, they have been divided into 5 Tiers.

Annual Spending per

Tier
Year

Tier 1 50000

Tier2 1,00,000

Tier 3 5,00,000

Tier 4 10,00,000

Tier 5 20,00,000

Table 3.1b

Page 12
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5

Shopping Slab Up Shopping Slab up Shopping Slab up Shopping Slab Shopping Slab up
to Rs.50000 to Rs 100000 to Rs 5,00,000 upto Rs 10,00,000 to Rs 2000000

Exclusive Privileges

2 points for every 2 points for every 2 points for every 2 points for every 2 points for every
Rs 100 shopped Rs 100 shopped Rs 100 shopped Rs 100 shopped Rs 100 shopped

1 Bonus point for 2 Bonus point for 2 Bonus point for 2 Bonus point for
every Rs 100 every Rs 100 every Rs 100 every Rs 100
Nil shopped shopped shopped shopped

Special Preview for Special Preview for Special Preview for Special Preview for Special Preview for
promotions promotions promotions promotions promotions

E-card greeting on E-card greeting on E-card greeting on E-card greeting on E-card greeting on
birthdays birthdays birthdays birthdays birthdays

Priority Billing Priority Billing Priority Billing Priority Billing Priority Billing

Reserved Car Reserved Car Reserved Car

Parking Parking Parking

Exclusive Rewards

Quarterly Offers Quarterly Offers Quarterly Offers Quarterly Offers Quarterly Offers
from non from non from non from non from non
competing competing competing competing competing
brands/categories brands/categories brands/categories brands/categories brands/categories

Tier Retention Gift

Tier Retention Gift
–
International
Tier Retention Gift Domestic Holiday Holiday for a
– for a couple couple
Tier Retention Gift
– Cross Pen 5 grams gold coin (3 Night/4 Day) (4 Night/5 Days)

3 Cars for the top 3

shoppers

Table 3.1c

Page 13
3.2 Kinds of Queries Handled at TIC

 Points Balance

The Customer wants to know the accumulated points balance in his/her account, and
requests for the same.

 Redemption Enquires

Queries regarding the eligibility for redemption, Conversion Rate (Rupee per Point),
validity of points etc.

 Offers available in the store

New offers, carnivals or promo’s available at the store.

 Requests for Address/Mobile no. change.

A request for change in personal details like Address, Mobile no. etc

 Any Special promotions going on at the store.

Special discounts, seasonal/festival promotions, etc at the store.

 Any other queries, problems etc.

General queries related to the store, departments etc.

Page 14
3.3 Types of Reports Processed by TIC

1. Conversion Report

This Report gives the number of new customers eligible for TIC membership, and how many
of them actually took up the membership. The Conversion Rate is given by

No. of TIC new members / No. of customers eligible for TIC membership

The report is received on a daily basis from the IT department and is processed and cross
checked. The report is then forwarded to the Mktg Department and the Store Business
Manager.

Proforma of Conversion Report

Date Total Walk Sales Eligible Cards Conversion

Ins Issued Rate

Table 3.3a

Page 15
 2. GV Sales Report

This Report gives the data related to Retail GV Sales(Retail). This report is received on a
daily basis from IT department, crosschecked and is then forwarded to the marketing dept
and the business manager.

Proforma for GV Sales Report

Date Invoice No. GV Serial Denomination Quantity

Numbers

Table 3.3b

3. PROMO GV Report

If any special Promotion is going on across Lifestyle stores, a special report during that
period is received by the TIC from the Mktg. dept of the store.

Eg: Any special offers in a particular Concept. If customer buys goods worth more than 2500
in Men’s apparel he gets a Promo GV of Rs 500, valid only in men’s section.

Page 16
3.4 Process Flows

Process Flow for the Issue of a new TIC Membership Card

1. Whenever a bill of more than INR 2500 is generated and no TIC card is produced, a
message is generated regarding TIC membership eligibility.

2. The biller tries to persuade the customer to avail TIC Membership, and the benefits of
the same.

3. The Customer fills the TIC Membership form, and the card is handed over to the
Customer.

4. Within 2 working days the data is checked and entered into the central database.

5. The customers can use the TIC card in any LMG stores there from and get Privilege
Points and other benefits.

Flow Chart

•A message is generated in the system for eligibility for the TIC card, when a bill of
1 more than 2500 is generated and no TIC card is produced.

•Biller tries to pursuade the customer to avail 'The Inner Circle' membership.
2

•If the customer accepts, he is given a form to fill.

3

•The customer's name is printed on the card, and the same is handed over to the
4 customer.

•The data from the form is updated on the server within two working days.
5

Chart 3.4a

Page 17
Process Flow for Retail GV Sale

1. Customer pays the total amount(denomination * quantity) at the billing counter,

collects the receipt, and is directed to the TIC Counter.

2. On producing the receipt the TIC executive gets the GV printed with date of issue and
denomination.(Any customized Message can also be printed)

3. TIC Executive collects the Name and contact number of the customer(in a register).

4. The GV is then checked and relevant stamps are put and handed over to the customer
in a Lifestyle Gift envelope, and a carry bag.

Note: These GV’s are available only for transaction in Lifestyle Stores(LS) and also with
Home Centre, and cannot be used in any other LMG stores.

Flow Chart

•Customer pays the total amount at the Billing counter and collects the receipt.
1

•On producing the receipt to the TIC, the executive asks the customer for the
requirement of any customized message on the 'GV'.
2

•TIC Executive prints the GC(s) required with the customized message on it.
3

•TIC executive stamps the GV with Lifestyle seal, and the date seal and checks for any
4 printing errors.

•Hands over the GV to the customer in a Gift Envelope.

5

Chart 3.4b

Page 18
Process Flow for Redemption of TIC Points

1. Check the bonus points available in the Customer’s account, and inform about the
points that can be redeemed.

2. The credentials of the customer are checked, and identity proof is verified. For
redemption of Rs 2000 or more, a photocopy of the id proof has to be collected.

3. If the customer asks to redeem the points, GV of LMG are issued for an appropriate
amount. (143 points=100Rs LMG GV)

4. The GV’s are stamped, checked and then handed over to the customer in an envelope.

Flow Chart

•Customer produces the TIC card a tthe TIC desk, and asks for redemption of points.
1

•TIC executive checks points in the member's account, and asks whether wants to
redeem them ( only if above 143 points)
2

•If yes, then the TIC executive asks for any identity proof of the member.
3

•TIC executive redeems the points on CRM system, and prints the GV.
4

•TIC executive checks the G, stamps with the date seal and hands it over to the
5 customer.

Chart 3.4c

Page 19
 4.1 Shopper’s Stop

Shoppers Stop is one of the leading retail stores in India. Currently they have 28 stores across
the country and three stores under the name HomeStop. Shoppers Stop has also begun
operating a number of specialty stores, namely Crossword Bookstores, Mothercare, Brio,
Desi Café, Arcelia.

Shoppers Stop retails a range of branded apparel and private label under the following
categories of apparel, footwear, fashion jewellery, leather products, accessories and home
products. These are complemented by cafe, food, entertainment, personal care and various
beauty related services.

Shoppers Stop launched its e-store with delivery across major cities in India in 2008. The
website retails all the products available at Shoppers Stop stores, including apparel, cosmetics
and accessories.

Loyalty program

Shoppers Stop’s has a loyalty program called First Citizen. They also offer a co-branded
credit card with Citibank for their members.

First Citizen

First Citizen is the Loyalty Programme of Shopper’s Stop.

The First Citizen program has 3 tiers - Classic Moments (entry level), Silver Edge and
Golden Glow. Members fall into the various tiers on the basis of their spends with the
company.

Page 20
The benefits that can be obtained by becoming a member are mentioned below:

 Reward Points for every time you shop at Shoppers Stop- Every 100 Rs add up as 1
point in the account. 1point equals 70 paise.
 Exclusive benefits & privileges- Reserved Car parking, dedicated counters for billing,
information about latest offers and promotions through mails/calls.
 Exclusive offers for card holders
 Bonus points accumulated on buying with First Citizen Credit Card
 Updates on what you can look forward to shop for at Shoppers Stop, depending on
your past shopping history.
 Extended and exclusive shopping hours - especially during the festive season
 Home delivery of altered merchandise.
 Exclusive First Citizens lounge at select stores to relax after hectic shopping

Key Observations

 First Citizen Members account to over 74% of total sales at Shopper’s Stop, and has
more than 15.2 lakh members.
 Private Label contribution to total sales is 21%, and the group intends to keep it below
25% for the next two years.
 18 new store launches in next two years will take the total Shopper’s stop count to 46,
and the spread to 22 cities.
 Home, Leather, Watches, Jewellery, Electronics and Personal accessories accounts to
about 42% of total sales.

Page 21
 First Citizen contribution to Sales
80% 74%
70%
70% 65%
60% 61%
60%
50%
40%
30% First Citizen contribution to
20% Sales
10%
0%

Chart 4.1

Source: Shopper’s Stop Annual Report 2008-09

The above chart explains the prime focus of Shopper’s Stop on its Loyalty Programme. The
% of sales generated from the First Citizen members has been increasing YoY, since past 5
years.

Pros

 Loyal customer base of above 15 lakh and growing.

 Presence in various segments: apparel, lifestyle, and electronics.
 Online shopping portal, and dedicated all India toll free customer helpline add to the
customer satisfaction levels.
 Cobranded credit card along with Citibank helps to leverage reach of Citibank to
increase Loyal Sales.
Cons

 Integrating online shopping account with FC card is complex and requires assistance.
 Terms and Conditions for members to redeem points, as to what merchandise is
available for redemption is not very clearly mentioned.

Page 22
 4.2 Westside

Established in 1998 as a part of the Tata group, Trent Ltd operated Westside. The Westside
stores have numerous departments to meet the varied shopping needs of customers. These
include Menswear, Women’s wear, Kid’s wear, Footwear, Cosmetics, Perfumes and
Handbags, Household Accessories, lingerie, and Gifts. The company has already established
41 Westside departmental stores (measuring 15,000 - 30,000 square feet each) in about 21
locations.

Loyalty Programme

West side has a Loyalty Programme called Club West.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 organized by the chain.

Clubwest is a two tier programme, which consists of Clubwest Classic and Clubwest Gold.
The chain currently has over eight lakh members, who generate over 50% of sales.

Clubwest Classic card can be availed by spending Rs 2000/- on a single day, or alternatively
by paying Rs 150/-.

On the other hand Clubwest Gold can be availed by spending Rs 5000/- on a single day.

Page 23
The benefits available for members are:

 Earn points every time you shop at Westside. These points can be exchanged against
subsequent purchases made in the store.

 A dedicated Clubwest desk for a member's assistance at each of the stores.

 Exclusive shopping hours only for members during sales.

 Unprecedented access to a host of privileges and services through our exclusive tie-ups
from time to time.

 Advance intimation of all in-store promotions and special offers through direct mailers.

 Special discounts on dining at select restaurants round the year.

Pros

 Round the year discounts on selected dining restaurants and other partner companies for
Clubwest members.
 Tie ups with other companies bring in attractive offers for the Clubwest members.

Cons

 The two tier Loyalty Programme system generates confusion and a barrier among
members.

Page 24
5. 1 Research Methodology

What is the Study About:

The study is an attempt to find out the influence of Loyalty Programme on the buying
behavior of Customers. Also the study is aimed at identifying the key influencing factors in
the buying process.

Time Period:
The study was conducted during the period 1st April 2009 to 20th May 2010.

Sample Design:

Rationale of sampling:
Bangalore has 3 Lifestyle Stores, and each of the stores cater to its own type of customers. In
order to take into account the differently profiled customers, data samples were collected
from all the three stores in Bangalore.

Sample size: Sample size consists of 105 respondents spread across 3 Lifestyle stores in
Bangalore.

Method of sampling: The method used for sampling is Random Sampling.

Problem Identification:

To evaluate the influence of Loyalty factor in the buying decision process and identification
of important parameters in the buying decision process.

Page 25
Method of Data Collection

The data collected is primary data from the Customers visiting the store. It is to be noted
that only members of the LMG Loyalty Programme-‘The Inner Circle’ were considered for
data collection.

Secondary data on the literature related to the topic has been obtained through the internet
and company manuals.

Measurement and Scaling

The responses are measured on various scales for different type of questions.
They include:
 Nominal Scale
 Ordinal Scale
 Likert Scale
 Rank Order Scaling, and
 Paired Comparative Scaling

Method of Analysis Used

Each question has been evaluated with the help of tables and graphs expressed in percentage
terms. SPSS and Ms Excel have been used to analyze the data.

Page 26
5.2 Analysis of the Questionnaire

Q. Since how long you have been a member of ‘The Inner Circle’ Programme?

Cumulative
Frequency Percent Valid Percent Percent

Valid 0-6 months 19 18.1 18.1 18.1

6 months -1 yr 21 20.0 20.0 38.1

1-2 yrs 34 32.4 32.4 70.5

>2 yrs 31 29.5 29.5 100.0

Total 105 100.0 100.0

Table 5.2a

Chart 5.2a

Interpretation: About 60% of respondents were found to be members of the TIC programme,
from more than a year. We can say that there were many customers who were regular visitors
of Lifestyle.

Page 27
Q. Which is your favourite shopping destination?

Fav_store

Cumulative
Frequency Percent Valid Percent Percent

Valid Lifestyle 63 60.0 60.0 60.0

Shoppers Stop 41 39.0 39.0 99.0

Central 1 1.0 1.0 100.0

Total 105 100.0 100.0

Table 5.2b

Chart 5.2b

Interpretation: About 60% of the respondents chose Lifestyle as their favourite shopping
destination, followed by 39% who think they shop at Shopper’s Stop more often. Shopper’s
Stop was found to be the biggest rival for Lifestyle catering almost to the same target market.

Page 28
Q. How many times do you visit your favourite store in a year?

Frequency

Cumulative
Frequency Percent Valid Percent Percent

Valid 2-3 time 28 26.7 26.7 26.7

4-6 times 61 58.1 58.1 84.8

>6 times 16 15.2 15.2 100.0

Total 105 100.0 100.0

Table 5.2c

Chart 5.2c

Interpretation: About 60% of the respondents claimed they visited their favourite shopping
destination 4-6 times in a year, while 16% of the respondents said they visited their favourite
shopping destination more than 6 times a year.

Page 29
Q. Why do you shop at the above mentioned store? Rank the factors on basis of importance
to you on a scale of 1 to 7?
(1 -very important factor and 7- least important factor)

 Wide range of products ____________

 Availability of National and International Brands ____________
 Seasonal promotions and discounts ____________
 Loyalty Programme benefits ____________
 Store Ambience ____________
 Experience at billing counter & other counters ____________
 Staff Service ____________

Note: Very Important factor was given a weight of 7, and least important factor was given a weight of 1 and
the calculations were made to get the following table.

Aggregate Score Table

Aggregate
Parameter Score Rank
Range 534 1
Brands Availability 527 2
Staff Service 460 3
Store Ambience 416 4
Experience at various counters 380 5
Loyalty Programme Benefits 339 6
Seasonal Promotions 290 7
Table 5.2d

Interpretation: As evident ‘Wide Range of Products’ is ranked as the most important factor,
followed by ‘Availability of National and International Brands’.
Loyalty Programme Benefits is ranked 6. The lower ranking of Loyalty Programme benefits
is owing to it getting shadowed by other parameters like staff service, store ambience etc.

Customers resort to a rational kind of buying behavior, where in the traditional influencers
like Range of merchandise, brands, and service levels of staff were given more importance.
Also to be noted is that Promotions/Discounts were not much influential to draw consumers
for a shopping trip.

Page 30
Q. Do you hold any of the below cards?

80
69
70

60

50

40

30
19
20
10
10

0
Shopper's Stop-First Citizen Westside-Club West Pantaloon-Green Card

Chart 5.2e

Interpretation: 69 of the 105 respondents are Shopper’s Stop First Citizen Card holders, 19
are members of Club West and 10 hold the Pantaloon’s Green Card.
As already said, Shopper’s Stop was the biggest destination after Lifestyle in the Multi brand
Lifestyle retail format.

Page 31
Q. Which Loyalty Programme is the Best Loyalty Programme?

This question was evaluated only for Respondents who had atleast one of Shopper’s Stop,
Pantaloon, Westside membership, along with Lifestyle TIC Card.

76 of the total 105 respondents claimed to be members of atleast one of the three
programmes- Shopper’s Stop First Citizen, Westside Club West, and Pantaloon Green Card.

Best Programme

Cumulative
Frequency Percent Valid Percent Percent

Valid Lifestyle 41 53.9 53.9 53.9

Shoppers Stop 30 39.5 39.5 93.4

Westside 3 3.9 3.9 97.4

Pantaloon 2 2.6 2.6 100.0

Total 76 100.0 100.0

Table 5.2f

Page 32
 Best Loyalty Programme

Shopper’s
Stop

Lifestyle

Chart 5.2f

Interpretation: About 54% of the respondents feel the Lifestyle’s- The Inner Circle
programme was the best, whereas 39% of them feel that Shopper’s Stop-First Citizen
programme was the best.

Page 33
Q. Rank the Loyalty Programme’s on various parameters.

This question was evaluated only for respondents who had Shopper’s Stop membership. This
was done as the nearest cards held were of Shopper’s Stop.

Aggregate Rank Table

Sl. No. Parameters Lifestyle Shoppers

1 Service at Loyalty desk 265 217
2 Special offers for members 243 258
3 Ambience of Loyalty Desk 265 216
4 Simplicity of Points system 233 244
5 CLP staff explaining the system 268 213
6 CLP staff solving the problem quickly 266 215

Table 5.2g

Note: Rank 1 was given weight 4 and Rank 4 was given weight as 1 resp. and above calculations
were made.

Interpretation: It is to be observed that Lifestyle is losing out on parameter 4 and parameter 2, i.e.
Simplicity of Points system and Special offers for members.

The reason attributed to this is the redemption of the points for a GV at Lifestyle, whereas in
Shopper’s Stop the points can be redeemed at the billing counter saving lot of Customer’s
shopping time.

Also the exclusive offers and discounts for members are less, and is only limited to the loyalty
points accumulated in their accounts.

Page 34
Q.I think Loyalty Card can bring many benefits, and it is important factor for me to choose where
I shop.

Agree
Neutral

Chart 5.2h

Interpretation: About 43% of the respondents agree that Loyalty card influences their choice of
shopping destination; where as 32% of the respondents were neutral to it.

Page 35
Q. The interaction with Loyalty Programme staff influences my decision to shop at the store.

Disagree

Agree

Neutral

Chart 5.2i

Interpretation: About 34% of the respondents feel that the interaction with the Loyalty
Programme Staff influences their decision to shop at the store where as about 60% of the
respondents were either neutral or disagree the proposition.

Page 36
Q. All my problems and queries are solved and answered satisfactorily at the TIC desk.

Strongly Agree

Agree

Chart 5.2j

Interpretation: About 80% of the respondents were happy about their problems being solved
at the TIC desk, and only about 20% people were either neutral or disagreed the same.

Page 37
5.3 Hypothesis testing

Hypothesis: Loyalty Programme Benefits ranks as top 3 factors for customer to choose
any shopping destination.

Ho: Loyalty programme benefits rank <3.

Ha: Loyalty programme benefits rank>3.

One-Sample Statistics

Std. Error
N Mean Std. Deviation Mean

Loyalty 105 4.7714 1.61279 .15739

Table 5.3a

One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference
Mean
t df Sig. (2-tailed) Difference Lower Upper

Loyalty 11.255 104 .000 1.77143 1.4593 2.0835

Table 5.3b

tobserved : 11.25

tcritical : 2.6259

Since tc<to Null hypothesis is Rejected.

We can conclude with 95% confidence level that Loyalty Programme benefits is not in the
top 3 parameters, that influence the customers to choose their shopping destination.

Page 38
Hypothesis: Loyalty Card Benefits influences the decision to shop at the store is less
than 3.

Ho: Loyalty Card Benefits influences the decision to shop at the store is < 3.

Ha: Loyalty Card Benefits influences the decision to shop at the store is >3.

One-Sample Statistics
N Mean Std. Deviation Std. Error Mean

Loyalty_card_benefit 105 3.4095 .91667 .08946

Table 5.3c

One-Sample Test
Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

Loyalty_card_benefit 4.578 104 .000 .40952 .2321 .5869

Table 5.3d

tobserved : 4.578

tcritical (df 100, 95% confidence level, one tailed test) =2.6259

Since tc<to we reject the Null Hypothesis.

We can say with 95% confidence level that Loyalty Card Benefits influences the decision to
choose the store to be greater than 3.0

Page 39
Hypothesis: The solution rating of any problem at the TIC counter is less than 3.5.

Ho: Problem solution rating <3.5

Ha: Problem solution rating >3.5

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Problem_solution 105 4.0381 .71956 .07022

Table 5.3e

One-Sample Test

Test Value = 3.5

95% Confidence Interval of the

Difference

t Df Sig. (2-tailed) Mean Difference Lower Upper

Problem_solution 7.663 104 .000 .53810 .3988 .6773

Table 5.3f

t observed : 7.663

tcritical : 2.6259

Since tc<to we reject the null hypothesis.

We can thus conclude with 95% confidence level that the Problem to Solution rating is
greater than 3.5 at ‘The Inner Circle’ Desk.

Page 40
6.1 Findings

1. About 60% of the Customers were the members of TIC programme since more than a
year.
2. 60% of the respondents claimed Lifestyle to be their favourite shopping destination.
3. 80% of the respondents were happy about their problems beings solved and queries
answered at the TIC desk.
4. Loyalty Programme ranked 6th, and was not in the top 3 parameters influencing the
Retail Buying Process.
5. Range of products, Brand availability and staff service were the top 3 parameters that
customers looked to decide their shopping destination.
6. About 60% of the respondents claimed they visited their favourite shopping
destination 4-6 times in a year.
7. About 43% of the respondents agree that Loyalty card influences their choice of
shopping destination; where as 32% of the respondents were neutral to it.
8. TIC maintained an edge over Shoppers Stop’s FC programme on all parameters
except Offers/discounts for members, and the Points system of the Loyalty
Programme.

Page 41
6.2 Recommendations

6.2.1 Modification in the process of redeeming points

On the basis of above Interpretation Lifestyle’s-The Inner Circle Loyalty Programme

maintains an edge over its competitors’ programmes.

However it was observed that one of the parameters where the programme is losing out is its
‘Points System’.

In the TIC programme customers have to get their bonus points redeemed for a Gift Voucher,
whereas for other programmes the customers can redeem it during the billing process. Thus
this is an extra step which increases the time and the complexity in the programme.

Present Process

Chart 6.2.1a

Page 42
Suggested Process

Chart 6.2.1b

• Customer can spend more • The time taken to service

Pros

Cons

time on shopping, than in each billing might increase

queue for redemption
• Processing time of printing
GV, and maintaining
records of accepted GV's is
saved.
• Physical GV's are removed
from the system, thereby
saving on time and cost.
• Redundant step is removed
from the cycle thus making
it more efficient.
by a small amount.
• Since physical GV is no
more in the
process, customers might
lose interest towards
getting more points in their
account.

Page 43
Process Chart in Detail

• The Customer comes to the Billing counter.

1
• After checking the available number of points in the customer's
account, the cashier asks the customer for redemtion of points
2
• On getting the approval from the customer he generates a receipt giving
the redemtion details. Authorization in the form of signature is taken from
3 the customer on the receipt.

• The cashier proceeds with generating the bill. The bill amount is the total
amount less the redeemed amount.
4
• The cashier hands over the bill, redemtion receipt, and the items shopped
for to the customer. One copy of the redeemed receipt is kept with the
5 cashier for records.

Chart 6.2.1c

Page 44
6.2.2 ‘Offers and Discounts’ offered to members

It was observed that a TIC member does not have any special offers or discounts other than
the Loyalty Points and occasional Gift Voucher’s of restaurants and clubs. Special
offers/discounts could be made available on the normal merchandise for members.

This would in turn help to increase non members to opt for a membership card to avail these
special offers and discounts thereby increasing the Conversion Percentage.

6.2.3 Training of TIC Executives

It was observed that the TIC Executives were not trained properly to communicate with the
customers. Also a high attrition was found when it was concerned with TIC executives, as
very few of them continued the job after 6 months.

In order to improve the overall Loyalty Programme, the TIC executives can be trained
properly to solve customer complaints, and also necessary steps taken and counseling to be
done to reduce the attrition rate.

Page 45
7 Conclusion

The study was successful in evaluating the effect of Loyalty Programme on the Retail Buying
Process. It opened up a new arena of study and research as to how Loyalty Programme can be
improved to make it an integral part of the Retail Buying Behavior.

The influence of the Loyalty Programme on the buying process of consumers was very
minimal. The reason attributed for the same was that more importance was given by
customers to factors like Range of Products, Availability of National and International
brands, Store ambience, Staff behavior etc. As a result the influence of Loyalty Programme
benefits was suppressed.

However most customers claimed that the Loyalty Programme Benefits influenced their
decision where they would shop, when the question was asked as a separate entity.

Thus it can be concluded from the study that Loyalty Programme has an indirect connection
to the buying process of consumers. Even though it is not evident, the urge to accumulate
more points and get rewards makes consumers to shop more at the store/shopping destination.

This study acts as a pointer for further research on Consumer Behavior related to Loyalty
Programmes, and how Loyalty Programmes can be tuned for increased effectiveness with
regards to the Retail Buying Behavior.

Page 46
8 Bibliography

Reference Books

 Marketing Research 5e, Naresh Malhotra, Prentice Hall Publication

 Marketing Management 13e, Philip Kotler, Prentice Hall Publication
 The Marketing Whitebook 2009-10,Businessworld Publications

Articles and Research Material

 ‘India Retail: Time to change lanes’,2009, KPMG India.

 Retailers Association of India Publication –STORAI, March-April 2010.
 IBEF Retail Survey, May 2010.

Websites

 www.lifestylestores.com
 www.landmarkgroupme.com
 www.indiaretailnews.com
 www.retailangle.com

Page 47
Appendix A : Questionnaire

Dear Sir/Madam,

As a part of the Research Project in the curriculum, I pose a questionnaire aimed at analyzing the impact of various
factors on satisfaction and loyalty of customers.

Your cooperation is deeply solicited.

1. What is your TIC No?

___________________________.

2. Since how long you’ve been a member of ‘The Inner Circle’ Programme?

 0-6 Months  6 Months – 1 Year  1-2 Years  More than 2 Years

3. Where do you shop most often/Which is your favorite shopping destination ?

 Lifestyle  Central  Westside

 Shoppers Stop  Pantaloons

4. How many times do you visit(not necessarily shop) your favorite store in a year?

 Once a year  2-3 times  4 to 6 times  more than 6 times

5. Why do you shop at the above mentioned store? Rank the factors on basis of importance to you on a scale of 1
to 7?

1 -very important factor and 7- least important factor.

 Wide range of products ____________

 Availability of National and International Brands ____________
 Seasonal promotions and discounts ____________
 Loyalty Programme benefits ____________
 Store Ambience ____________
 Experience at billing counter & other counters ____________
 Staff Service ____________
6. Do you hold any of the below Cards? (Multiple choice options)

 The Inner Circle Lifestyle  Shopper’s Stop- ‘First Citizen’

 Westside’s - ‘West Club’  Pantaloon - ‘Green Card’

 Any Other: __________________

7. Of the above mentioned Loyalty programmes which Loyalty programme is the best?

 The Inner Circle Lifestyle  Shopper’s Stop- ‘First Citizen’

 Westside’s - ‘West Club’  Pantaloon - ‘Green Card’

 Any Other _________________

8. Rank the Loyalty programmes on the scale of 1 to 4 with 1 being the ‘Most Appealing’ and 4 being ‘Not so
Appealing’. ( Leave the columns blank if NA)

Parameters Lifestyle Shopper’s Westside Pantaloon

Stop

Service at the Loyalty Desk

(Behavior of Staff)

Special offers for the Loyalty Programme

members

Ambience of the Loyalty desk

Simplicity of the Point system

CLP Staff clearly explaining the Point system

CLP staff quickly solving problem

9. I think Loyalty Card can bring many benefits, and it is a very important factor for me to choose where I shop.

Strongly Disagree  Disagree Neutral Agree Strongly Agree

10. The interaction/experience with Loyalty Programme staff influences my decision to shop at the store.

Strongly Disagree  Disagree Neutral Agree Strongly Agree

11. All problems and queries are solved and answered satisfactorily at the TIC desk.

Strongly Disagree  Disagree Neutral Agree Strongly Agree

12. I do receive periodic and proper updates regarding offers and promotions (mail/sms/calls) from the TIC.

 Yes  No  May be/Can’t say.

13. I do rely on communication from the TIC for my future shopping with Lifestyle.

 Yes  No  May be/Can’t say.

14. Would you recommend your friends to get enrolled in to the TIC programme of Lifestyle?

 Yes  No  May be/Can’t say.

Thank You for your kind gesture.

Have a good day.

Nayan Dharamshi
MBA-Marketing
Christ College, B’lore