BackIndian consumers more likely to switch brands, firms: Accenture
88% of respondents switched firms in at least one industry due to poor service, according to survey
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Bengaluru: Consumers in India are far more likely to switch brands and companies than in other countries due to poor service, causing a potential revenue loss of $331 billion for large firms, a global survey has found.
In the India-specific findings of the Global Consumer Pulse survey by consulting firm Accenture, 88% of respondents switched companies in at least one industry due to poor service, a number significantly higher than the global average of 64%.
“It isn’t about the product any more," said Raghuram Devarakonda, managing director, sales and customer services at Accenture Strategy India. The days of mass-customization of the product are over, he said. “What we are seeing now is more focus on service."
Devarakonda suggests that fast-growing disruptive businesses—read start-ups like Uber that are far more technology-dependent—are taking away the need for a better product, instead focusing on providing better service. The shift, he adds, is imperative. Traditional firms are upgrading swiftly to digitize their business, as pressure mounts from both online retailers and consumers who are far more adept at technology.
To be sure, shopping decisions made on the Internet and fulfilled either online or offline currently influences 21% or roughly ₹ 60,000 crore of the ₹ 280,000 crore-plus of in-store organized retail sales in India, according to a July report by consulting firm Deloitte. For products, clothes and electronics hold the highest digital influence.
Devarakonda attributed Indians’ propensity to switch to more options emerging in the market and increasing customer maturity. “Also, they are pivoting towards newer technology (both on mobiles and desktops) far easier."
Nearly 80% of Indian customers surveyed agreed that greater technology use has improved the level of service. This is above the global and emerging market average of 61% and 75% respectively.
Consumer-facing firms have been beefing up their digital and technology teams to adapt to boost sales across channels.
In August, Kishore Biyani-promoted Future Group hired Vinod Bidarkoppa, former group IT director at Tesco Plc., as group chief information and technology officer to drive technology strategy, including digital commerce, at the retailing group.
According to Bidarkoppa, digital integration will range across the group’s businesses, from packaged consumer goods to food parks and retail. He said it will not be just internal upgradation, but will also have a strong consumer interfacing ecosystem to help boost sales.
Bidisha Nagaraj, group president, marketing at India’s largest coffee chain Cafe Coffee Day, said digital is key to the company’s entire purchase experience across its 1,600-plus cafes.
“When we launch a new product, we use the offline medium to create awareness and simultaneously, we use the mobile and web medium to promote trial of the product," added Narang, suggesting a mobile app helps the brand interact with consumers through options such as seeing new offers, viewing store locations and experiencing the menu.
According to Devarakonda, banks and financial institutions and doing digital integration much better than other sectors.
The survey added that 86% of customers who switched said that the firms could have done something to prevent them from switching. Also, 56% of customers are willing to give their service providers another chance, if the firms make it worth their while.
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