We encourage consumers to revalue junk, says Big Bazaar's CEO

Consumers did not believe that a modern retailer could be in the business of collecting 'raddi', says Sadashiv Nayak, CEO, Big Bazaar, in an interview.

Here are the excerpts:

What has been the most important sales promotion you have engineered so far?

At Big Bazaar, we initiate many sales promotions but one of our longest-running successful sales promotion, 'Exchange Offer: Get the old stuff, take back the new", has been among the most interesting sales campaigns we have engineered. Actually, more than just a sales promotion, it has been a complete 'brand entity' for us.

The promotion takes place in February every year. We treat the promotion as a brand that can help everyone in the value chain, including the retailer and the consumer. It is through this exchange offer campaign that we got additional walk-ins. The promotion contributes the most to the overall revenues every year and it has also changed the outlook of the traditional consumer towards modern retail.

Through this exchange offer, we encourage people to get the 'raddi,' or junk from their homes and exchange it for discount coupons. These coupons can be used to shop at Big Bazaar. That as a modern retailer we are encouraging consumers to "revalue" junk is what has made this sales promotion so successful.

...

Who is the primary target for the promotion?

The primary target for this particular sales promotion continues to be the homemaker in the 25-plus age group. That is our core consumer. However, the success of this sales promotion - it is over five years old now - has now brought into its fold senior citizens, the youth (we began apparel exchange where many youngsters exchanged their old pair of jeans with a new pair based on some terms and conditions, as well as some 'conservative consumers' who did not visit modern retail stores earlier. You see, as long as we keep having junk and garbage in our homes, this sales promotion will continue doing well.

Can you explain the media plan?

We looked at the traditional media, including print and television, to unveil this promotional campaign. In fact, we received a very good response at the outset because the look of the media campaign was attractive and people instantly connected with the 'value for junk' offer. We also advertised seven to eight categories of junk so that consumers could really think of the junk lying at home and immediately connect with the offer plan as explained in the media campaign.

...

What we also did was tying up with some housing societies and actually send a big Big Bazaar truck where people could simply dump their junk and get their coupons on the spot. This was a value addition in that they didn't have to stuff their vehicles and travel long distances to drop the junk.

We looked at other ways of adding value to the sales promotion. On-ground activation turned out to be a good idea to increase the interest of the consumer in this sales promotion, encouraging her to participate and get involved. In fact, now anywhere between 1-1.5 per cent of the media spend for this sales promotion comes from the sales that we do through the campaign. This is proof of the fact that it has worked for us.

Why was the promotion designed in such a manner?

Like I said, we wanted to engage more people, increase footfalls and see a strong base of consumers actually connecting with the brand. Also, as a retailer we wanted the advantage of our own products to move off the shelves. The coupon holder can buy four times the value of junk that she disposes. That is, if she sells Rs 10 worth of junk, she gets coupon value of Rs 40 which she can redeem against select goods at Big Bazaar. So, it is a win-win situation.

...

Also, a core value for the company has been sustainability and being eco-friendly. This was a good way for consumers to recycle products; this was a good way for us to receive the junk and give it forward to the right people in the value chain.

What were the challenges?

Initially, consumers did not believe that a modern retailer could be in the business of collecting 'raddi'. That was something that the neighbourhood 'raddiwalla' did and we had to convince that our deal was for real, especially given that in most cases, we were offering nearly 50 per cent more for junk than what the traditional trade offers and giving coupons against what we received.

Then, Big Bazaar is present in some of the plush malls where the owners didn't understand how advertising raddi sales would impact the overall ambience of the mall. However, seeing the increase in footfalls, even here we managed to silence the critics. These were basic challenges that we tackled because at the end of the day, our consumer understood the value attached to the sales promotion.

...

What has been the direct and measurable impact on sales and the brands?

Footfalls have increased anywhere between 10-40 per cent, the consumer base has widened and interestingly, we have somewhere managed to educate and break some of the old habits of Indian consumers. For example, in most homes, the utensil in which we make tea or even strain in has not changed. Then, towels, which should be discarded every four-six months are used for years and years. Ditto with toothbrushes that should be changed every six months. By showing images of products that can be discarded, we actually allowed the consumer to sit back and take note of just how crucial it was - from the view of hygiene - to discard the old.

Will it be relevant going forward?

Yes, our sales promotion will continue to be relevant as long as we learn to discard the junk in our homes.

Don't such sales promotions incur high costs for the company?

Not really. This particular promotion has contributed roughly 6 per cent to the overall revenues of Big Bazaar; so you see that instead of incurring high costs, it is actually contributing to our revenues. If done correctly, sales promotions can give good returns to a company.

The Big Bazaar exchange offer

Aim

Encourage people to get the junk from their homes and exchange it for Big Bazaar discount coupons

Target

Homemaker in the 25-plus age group, senior citizens, youth and conservative consumers who did not earlier visit modern retail stores

Plan

Discounts are given on the basis of coupons collected. The discount ranges anywhere between 25-30 per cent

Outcome

This particular promotion has contributed roughly 6 per cent to the overall revenues of Big Bazaar. The footfalls have increased between 10-40 per cent and the consumer base has widened.