Paula: Hello, and welcome to Let’s Talk Loyalty and Loyalty TV, a show for loyalty marketing professionals.
Paula: I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty and Loyalty TV, where we feature insightful conversations with loyalty professionals from the world’s leading brands.
Paula: If you work in loyalty marketing, join us every week to hear the latest ideas and insights for loyalty marketing specialists around the world.
Paula: I’m delighted to announce Capillary Technologies as the new title sponsor for Loyalty TV.
Paula: Capillary’s mission is to bring the loyalty market out of the 1980s and into the present, ditching the slow, chunky manual services of the past.
Paula: Capillary is all about making loyalty management easy, with scalable, AI-powered tech that turns loyalty managers into superheroes.
Paula: Say goodbye to outdated methods and check out the exciting new way to achieve loyalty excellence in 2024.
Paula: As most of you know, we love to bring you a truly global loyalty perspective.
Paula: And as part of that, today we’re heading to Indonesia, a country of 280 million people, made up of 17,000 islands, and is in fact the fourth most populous country in the world.
Paula: Our featured brand is one of the largest retail conglomerates in Indonesia, with nearly 200 stores and a market leadership position, particularly in the kids and baby segment.
Paula: Kanmo Group is the official distributor for Indonesia of multiple world-class brands, and their portfolio includes global icons, such as Mothercare, Coach, Adidas, Havaianas, Liverpool Football Club and Nespresso.
Paula: Our guest is Raj Grover, who is Kanmo’s Group Vice President of AI, Digital and Omnichannel, which includes responsibility for the Kanmo Circle Loyalty program.
Paula: Separately, Raj has also recently written and published a book called Start Unselling Now, which introduces his customer-first approach that prioritizes the buying journey over any sales targets.
Paula: I hope you enjoy my conversation with Raj Grover from the Kanmo Group in Indonesia.
Paula: So Raj, joining us all the way from Jakarta, welcome to Let’s Talk Loyalty and Loyalty TV.
Rajesh: Thanks Paula, thanks for having me on the show.
Rajesh: I hope you’re doing well as well.
Rajesh: And we’re very, very glad to come and participate and speak to you.
Paula: Thank you so much Raj.
Paula: And certainly Indonesia is a country I am very unfamiliar with, so you’ll have to forgive me for that.
Paula: I’ve only been to Bali, actually one of the many islands as part of where you live.
Paula: So I know it’s an extraordinary market with incredible opportunity as well from what you were talking about when we were speaking last time.
Paula: So we’re going to talk all about, of course, the Kanmo Group, specifically where you’re working, your role, and all of the exciting stuff you’re doing, particularly in the field of hyper-
Paula: personalization, obviously leveraging AI, so loads to talk about.
Paula: But before we get into the loyalty conversation, we have a new question that we’re asking all of our guests now in 2025, just a little bit broader, I suppose, about life and leadership.
Paula: So our opening question is designed to get a sense of what you like to read, and that’s in, I suppose, a non-fiction capacity, probably more professional type of books.
Paula: So let me start with that very first question, Raj.
Paula: What would you say is your favorite book?
Rajesh: Interesting question and great timing actually, and it’s a coincidence because at this point of time, my favorite book is called Start Unselling Now.
Rajesh: It’s written by me, so obviously, I have to be my biggest fan.
Rajesh: But if I have to tell you, other than my own book that I recently wrote, I think the book that I like quite a lot is One Click by Richard Brandt.
Rajesh: It’s a story on how Amazon grew and the strategies and something.
Rajesh: I quite closely associate with personally, the kind of work that they had done in the e-commerce space.
Rajesh: I don’t need to explain what Amazon stands for.
Rajesh: They are giants in the world of e-commerce.
Rajesh: That’s one book which I really, really like.
Rajesh: Primarily, the reason for that is because it talks more about how Amazon built the enterprise around the customer, which is a philosophy.
Rajesh: If you were to read my book, you will see everything in my book also revolves on the customer.
Rajesh: I think that has been my philosophy throughout my career as well.
Rajesh: As we’ll go along in the discussion, you would actually see me talking way more about customers, because I think in my personal opinion, that is what the focal point should be.
Rajesh: A lot of times when it comes to technology and tools, we start thinking of them as magic ones, where technology or any kind of tools are simply adablers.
Rajesh: The farther we go away from the customer, the more hard it is for us to do our business.
Rajesh: So yeah, that book really resonates with me.
Rajesh: And I would definitely recommend that after Start Unselling Now.
Paula: Well, of course, we’ll forgive you for plugging your own book.
Paula: And I do want to get a sense of it from you, Raj, because it’s obviously quite a provocative title.
Paula: And I love that, of course.
Paula: We have to take a stand.
Paula: That’s the whole point, I think, of becoming a published author.
Paula: So we’ll definitely put the one-click book anyway, of course, in the show notes, as well as a link to your own book.
Paula: So I guess I wanted to ask, yeah, like, why did you write your book?
Paula: Like, do you feel that people still need a lot of reminding about this key topic that you’re so passionate about?
Rajesh: Actually, so the inspiration for the book, and I’ll be very honest, there have been a lot of friends, I’ve been training people in sales, I’ve had a lot of teams, and globally, because Indonesia is the 13th country that I’m living in.
Rajesh: So I’ve worked, lived around the world.
Rajesh: So I understood different cultures and I’ve built businesses, startups, worked in companies.
Rajesh: A lot of times people, my friends would tell me, why don’t you just write a book instead of, you have such knowledge, you are training so many of us, why don’t you just write a book?
Rajesh: Quite honestly, I used to always tell them, I’m not an author, trust me.
Rajesh: I mean, I could speak but writing is a different ballgame.
Rajesh: I don’t think, I have it in me.
Rajesh: And then, I think it just clicked, I thought, okay, let me just put my thoughts into a book, let’s give it a try.
Rajesh: And if I come to the title, and the title was very well thought of, I mean, I purposely wanted it to be a bit provocative because that has been the mantra that I’ve always followed.
Rajesh: Because when I was coming up early part of my career, I would hear people make comments, simple comments like, XO and so is such a smart sales guy, he could sell comb to a bald guy.
Rajesh: But as you progress in the career, you realize that is not what sales is about, that is not what about helping the customer.
Rajesh: So unselling is all about changing the way we look at sales.
Rajesh: And again, like I said, a lot of my discussions will always revolve around the customer.
Rajesh: Because what happens is a lot of times we forget, when we are the customer, we want the world for us.
Rajesh: But when we are dealing with customers, then we’ll come up with all kinds of excuses, we’ll have our own priorities, we completely forget about the customer.
Rajesh: And the book goes all the way in that.
Rajesh: It’s about how you would get close.
Rajesh: And the thing is, it is something which when I’ll speak, when you will read, you will say, yeah, but it’s so obvious.
Rajesh: But then when you start comparing it with what you actually are doing on your daily life, then you realize, oh yeah, there is a big gap, right?
Rajesh: Because this is not exactly what I do.
Rajesh: But I’ll give you a simple example, when people talk about personalization or keeping in touch with the customers.
Rajesh: And I remember I was speaking, I think I was in one of the Southeast Asian countries, and one of the guys stood up and said, yeah, but we always keep in touch with our customers.
Rajesh: And I said, okay, can you tell me how do you do that?
Rajesh: He said, well, we have a WhatsApp broadcast group.
Rajesh: So, we are smart.
Rajesh: So we just send one message to everyone saying, hi, how is it going?
Rajesh: And the conversation, I was like, but that is exactly what personalization is about.
Rajesh: Personalization takes an entirely different meaning.
Rajesh: And a big part of my book, which I think a lot of people forget, and which adds on to the part that I said, you need to love your customers as referrals.
Rajesh: If you look at, pick up any of the top companies in the world, I’m talking about corporates or top salespeople in the world, 50 to 60 percent of the sales comes from reference, which are given by customers.
Rajesh: And you would never get those if you have not dealt with the customers or treated them nicely or the right way.
Rajesh: So that’s where the whole book revolves around.
Rajesh: It’s basically a culmination of the 21 years of experience that I have across different markets to help people pick up on those mistakes.
Paula: Amazing.
Paula: Well, listen, congratulations on publishing it.
Paula: I have no doubt it will be a huge success.
Paula: I think anybody who goes through that discipline of sitting down, crafting words, crafting thoughts, there’s just extraordinary value and it means you have a legacy now in the world as well, Raj.
Paula: So you should be very proud.
Rajesh: Thank you so much.
Rajesh: I really hope it makes a difference for people.
Paula: I’m sure it will.
Paula: Listen, let’s get into talking about Kanmo Group.
Paula: Again, it wasn’t a company I’m familiar with.
Paula: Would you mind just introducing that, particularly for our global audience?
Rajesh: Sure.
Rajesh: Kanmo Group, it’s a retail conglomerate.
Rajesh: One of the retail conglomerates in Indonesia.
Rajesh: We are part of actually a bigger group, a bigger parent company.
Rajesh: Kanmo Group, this year completes 20 years actually.
Rajesh: We are retail franchisers for some of the top brands in the world.
Rajesh: Plus, we have some of our own brands that we have built over a period of time.
Rajesh: We deal with brands such as Coach, Kate Spade, Havaianas, Nespresso, Adidas.
Rajesh: Just to name a few, Mothercare is one of our key brands as well.
Rajesh: Then we have our own brands like Momami, which we have built from scratch, Peony, which is again in the baby and kid segment.
Rajesh: I’ve been here for, the company has been around for 20 years.
Rajesh: I have been part of Kanmo for a little over three years.
Rajesh: I joined them as the group vice president for AI Digital and Omni Channel, which is where I take care of all our brands across anything in Omni Channel and Digital, and AI for the group.
Rajesh: It’s been quite an interesting journey in the last three years, especially right after, I think, the cusp of the middle of COVID to then coming out of COVID, and then how businesses have changed and consumers have changed, but it’s been a fantastic journey.
Paula: Incredible.
Paula: Yes.
Paula: Tell us then about the loyalty program, because I know you have a loyalty brand and a program that covers all of those amazing brands that you retail.
Rajesh: Correct.
Rajesh: We have a loyalty program, it is called Kanmo Circle.
Rajesh: Again, because it’s driven more towards the consumer angle, that we are one family, so we want to keep everything, all our brands and all the benefits of our brands that we can offer to our loyal customers.
Rajesh: It’s quite an interesting and successful loyalty program that we have, because as, and I’ll bring in a bit of tidbits about how loyalty has also evolved and the reason why we have been able to do quite well.
Rajesh: Yeah.
Rajesh: I remember a couple of months back, I was actually talking in a conference on the topic of loyalty, and I was telling them, actually I presented, saying that the concept of loyalty actually started way back in the 1700s.
Paula: I love that slide.
Paula: Yes.
Paula: Amazing.
Rajesh: Copper tokens moved all the way to 1800s with food stamps, and it kept on changing.
Rajesh: Then if you look at the time period, and if you were to map it out in a time range, you will see around 2010 onwards, you started to see a shift.
Rajesh: A shift in loyalty, which I personally calls, I think that was a period where it was a start of loyalty 2.0, rather, that’s what I would put it, because it started to move from a transactional perspective, points perspective, to slightly more experiential as well.
Rajesh: I think a key part, again, of the conversation that was presenting, it was not that someone randomly woke up someday and said, well, guys, let’s do something different, because I think it’s been around for quite a while.
Rajesh: Everything that the changes that we see, they’ve always been driven by consumers.
Rajesh: Surprisingly, I would love to show you a slide, I don’t know, but the slide that I presented actually superimposed.
Rajesh: If you want to look at how two more things, which is the consumer demographics evolved around the same period, and the number of touch points consumers had evolved to transact.
Rajesh: So you would see around the period of 2010, mid of 2010 to 2020 onwards, you would see the start of Gen Z’s, Millenium’s ending into Gen Z’s coming in.
Rajesh: You started to see a lot of Omnichannel talks coming in.
Rajesh: The fun part was that if you look at the timeline, you will see that the gap between generations as we speak today, is becoming shorter and shorter.
Rajesh: I mean, last year I was talking about same time on Gen Z and how to handle them.
Rajesh: This year, I actually spoke about Gen Alpha.
Paula: Oh, brilliant.
Rajesh: It is moving so fast.
Rajesh: Because consumers evolved so fast, their needs became different.
Rajesh: Like I said before, loyalty, it’s a tool, it’s an enabler.
Rajesh: But it is still going to be driven by consumer demands and consumer needs.
Rajesh: Our consumers today, they don’t care whether they shop online, or they shop offline, or they shop through social commerce.
Rajesh: They expect to have the same behavior, they expect to have the same perks.
Rajesh: We actually evolved our loyalty program to make sure that it is omni-channel.
Rajesh: Whether you transact online, you transact offline, you get points, you can redeem points, you can earn points.
Rajesh: Easier said than done because there is a lot of tech behind it which also needs to evolve.
Rajesh: Traditionally, we’ve always been a retail group.
Rajesh: For a retail group to then quickly adapt and evolve and become a full-fledged omni-channel set up, I think it’s easier said than done.
Rajesh: It comes with its own set of challenges but I think the satisfaction of achieving that has been fantastic.
Rajesh: And then, of course, there are a lot of other parts within our loyalty program which we implement to keep our consumers hooked on to coming back to us.
Paula: Amazing, absolutely.
Paula: And certainly for people watching on loyalty TV as well, Raj, we’ll make sure we do insert that slide.
Paula: So please do make sure that you send that to us.
Paula: We’ll also link to it in the show notes so anyone listening in audio format can also just click and have a look as well because I loved seeing how far back you went.
Paula: So my understanding before you showed us that slide was that loyalty went back as far as the 1800s.
Paula: I know there was a stamp system in the US market, SHG or something similar was the name.
Paula: Yeah.
Paula: So that’s the one.
Paula: And then Green Shield Stamps and a lot of these things before obviously digital came and Airlines obviously totally redeveloped and revolutionized, dare I say it, our industry.
Paula: So the fact that you had something that predated my knowledge meant I already learned something.
Paula: So thank you for that.
Paula: And we’ll definitely make sure that we include that slide for everybody.
Paula: So a brilliant journey.
Paula: And again, just in simple terms, it’s a cash back formula, obviously with different tiers to make sure you can focus on driving up spend and everything else that’s necessary.
Paula: No points currency, of course, from what I’ve seen.
Paula: And other, of course, lovely things, birthday discounts and all of those, depending on the level of spend.
Paula: Yeah, so a very rich program, very well thought through.
Paula: I can certainly see all of that.
Paula: And I guess then because we’re mainly here to talk about AI then Rajesh, I’d love to hear what has been maybe implemented so far in terms of AI for loyalty.
Paula: I think, as you said, we’ve been talking about moving away from transactional and into much more personalization and experiential.
Paula: We’ve been talking about it for a long time, but pretty much everyone I talked to, Rajesh, is still struggling and doesn’t feel like they’ve remotely scratched the surface of what’s possible.
Paula: So where are you with Kanmo Circle in terms of AI?
Rajesh: So you would be right.
Rajesh: I think in terms of possibilities, we are barely scratching the surface.
Rajesh: And we have made quite a bit of changes.
Rajesh: Of course, we are also in this process of learning and evolving our system, because AI before it would actually be able to deliver long-term impacts, you need to train your models on a lot of data.
Rajesh: And that takes a lot of time.
Rajesh: But till that time matures, you still have a lot of initiatives that we do.
Rajesh: And I think for the audiences, I would also say because this sort of relates to the challenges that also you will come across when you are trying to implement a loyalty program.
Rajesh: Again, something that I face within our team as well.
Rajesh: So you would see a set of companies where they would say that, we can’t do AI or we can’t use personalization because we don’t have enough data.
Rajesh: And then you’ll also come across people who would say, we have way too much data and we don’t know what to do about it.
Rajesh: And you will always have these issues.
Rajesh: And in my opinion, it is always good to have more data.
Rajesh: But then when you have more data, somehow what happens is people get into the mindset of analytics.
Rajesh: They start looking at numbers and metrics and they, again, like I said before, they start moving away from the customer.
Rajesh: I think what I always believe, and this was one of the key challenges and one of the key success, I would say, that we were able to build within our team was, if a metric, if any number, any metric is not telling you a story about your customer, let’s not bring it up.
Rajesh: Because I think everyone is smart enough to look at numbers and figure out what needs to be done.
Rajesh: But if a number or a metric doesn’t tell a story about the consumer, we would not make any changes.
Rajesh: It won’t be important.
Rajesh: So, the way we looked at loyalty, we sort of changed it.
Rajesh: So, I call it STP.
Rajesh: I would love to share this.
Rajesh: It was part of the same presentation that I gave in the conference.
Rajesh: They call S stands for segmentation, P stands for targeting, and P stands for positioning.
Rajesh: Now, all these words are not new words.
Rajesh: It’s exactly like what I was telling in my book in Unselling.
Rajesh: It’s very, very obvious.
Rajesh: But the thing is, when you look at, and when I was looking at my teams, we were very focused on just the term segmentation.
Rajesh: I have segmentation, or we have segmentation.
Rajesh: But those segmentations were not telling you very closely about your consumers.
Rajesh: Because now we’re talking about hyper-personalization.
Rajesh: How would you make sure?
Rajesh: Because in today’s world, it’s very, very competitive.
Rajesh: You speak to any company and they’ll tell you, the cost of customer acquisition has gone very high.
Rajesh: And it’s very, very obvious.
Rajesh: Then they’ll also tell you about customer attentions have gone down, which is also a problem because today consumers have the choice.
Rajesh: So we have to be agile and we have to go out of our way to please our customers.
Rajesh: So the STP here stands in, and I’ll try to keep it brief, is like go beyond segmentation.
Rajesh: So for example, once you’ll have the slide, it will be very, very clear.
Rajesh: You look into the targets that you want to cater to, and you would have different targets within your consumer segment.
Rajesh: Then each of those targets, how would you want to position your brand?
Rajesh: I think what generally people were using a lot of times loyalty at the mistake commonly in the means that we were also making was, we have a segmentation, we have an awesome promotion that is going on, and we are reaching out to them through their preferred channel of communication, whether it is SMS, email, WhatsApp, whatever.
Rajesh: Now the thing is, for example, if you are a luxury connoisseur, and you are one of my top consumers, rated right up in terms of frequency, monetary purchases, you are not the kind of person who is driven by discounts.
Rajesh: You are the kind of person who is driven by absolutely special treatment.
Rajesh: Now, imagine before my new season launch goes live on the floor, we call you or we send you and people like you, a small, which is called unlinked, so the link is not available, unlinked page to purchase.
Rajesh: It’s making you feel much more special.
Rajesh: I don’t need to offer you discounts.
Rajesh: I mean, a guy like you, if I were to send you discounts, you would probably throw my e-mail into a rubbish bin saying, because that’s not what you want to feel special, because you fall into that target.
Rajesh: Similarly, you would have various categories of consumers.
Rajesh: The thing is, a lot of times we fail to position our brand with respect to the consumer in that segment.
Rajesh: So STP is something that we follow.
Rajesh: In fact, our partner’s capital that we use, we worked with their data team extensively, along with our data team, to come up with segments which define our consumers not just across my group of branch, but also individually within our branch.
Rajesh: Because again, if you are a member of our loyalty program, you would not want benefits only across one brand.
Rajesh: I want to extend benefits to you across all my brands, and how do I do cross-brand benefits to you as well.
Rajesh: We worked very closely with Capillary’s data team to come up with the exact RFM segmentations, created those targets.
Rajesh: Then we decided internally because then the second part becomes our part, which is we know our brands better, we know our consumers better.
Rajesh: How in each particular segment, we would want to position our brand to the customer.
Rajesh: It’s again, not about just generalizing e-mails, generalizing WhatsApps, the same campaigns.
Rajesh: It’s about trying to figure out from the patterns and the data, what would appeal to that particular set on target of customers.
Rajesh: It’s the same STP, which is going beyond segmentation.
Rajesh: I think we are done with that.
Rajesh: It’s a 15-year-old concept.
Rajesh: So the same brand, for example, in a simple way, Paula, you would get a very different kind of communication because I know how you behave with respect to my brand versus a customer in another target segment.
Rajesh: If you were to ask me, and I know your next question will be, so Raj, are you happy?
Rajesh: I would say no.
Rajesh: Because like I said, our consumers are evolving, and we are barely scratching the surface.
Rajesh: With AI in future, I would prefer to anticipate when would Paula want to make a purchase?
Rajesh: What is the kind of purchase from the pattern?
Rajesh: That will take some time because the data, the training algorithms that we have, they are still learning.
Rajesh: It takes a bit of time, but I think they’re on the right track.
Paula: Yeah.
Paula: Amazing.
Paula: Well, thank you for that.
Paula: Of course, our friends in Capillary, I know they’re very proud of the work they’ve done with their AI models.
Paula: And again, I suppose, harnessing their global client base to get insights that can then be used for you in your market.
Paula: And as you said, then, as the brand, you can take that expertise, layer in your expertise as the brand owner and with your own customer sense and expectation and obviously deliver that hyper-personalization.
Paula: So very well said.
Paula: And you know what I was thinking, Raj, as well, as you said that there’s been a lot of coverage recently, and I’m sure you’ve seen it as well, but it exactly is about your point about the losing of focus on customers.
Paula: And I think the most high-profile example, last year from a marketing perspective was Nike.
Paula: And their CEO, I think for the last few years, was overly focused, it seems, from what I’ve read on analytics and losing sight of the athletes.
Paula: And exactly what do they need from a shoe?
Paula: What do they need from whatever equipment they might need?
Paula: So it looks like they’re back on track, but I think it absolutely proves your point, like analytics can give you hypothesis, but you have to be the person that loves your customers enough to make sure you understand what’s the story and the real need behind that.
Rajesh: Completely, completely agree.
Rajesh: I mean, you brought up Nike.
Rajesh: I was using that example, actually, in a discussion with a colleague a couple of days back.
Rajesh: There’s also a very interesting story about Abercrombie and Fitch and how they are talking roughly the same thing.
Rajesh: The company, how they went from a company that was struggling to a company that is now leading all by bringing in the kind of people who were keeping customers to the front.
Rajesh: I think they brought in someone who had been a career merchandiser.
Rajesh: In detail, we call this term career merchandiser, somebody who started off in the management training program, rose all the way up.
Rajesh: So they look, think, sleep, drink, breathe a customer.
Rajesh: Then they look at numbers.
Rajesh: And the same thing, if the numbers are not telling you a story about your customer, it’s no point having those numbers.
Rajesh: I mean, if statisticians alone could run businesses, then I think everyone would be writing statistics.
Rajesh: But I think it’s the consumers who drive the business.
Rajesh: And one thing that I always tell, and it might seem like a sort of a punch line, but it was also something I mentioned in my book.
Rajesh: It’s no more about how you want to sell to the customers.
Rajesh: It’s about how the customer wants to buy.
Rajesh: Gone are those days when we were talking about the four P’s, the right price, right place.
Rajesh: It is no more about that.
Rajesh: It is that plus what the consumers want and how they want it, and the way they want it.
Rajesh: If we are not agile enough to make changes, to adapt to our consumers, they are going to go to somewhere else.
Paula: Yeah.
Paula: And you know, I’ve even been thinking about it a lot personally as well, Raj, in terms of our tiny business, you know.
Paula: So we’ve been broadcasting for five and a half years and I only started actually doing some surveys about six months ago going, I should probably be doing more listening to my audience because they’re all listening to me and I haven’t been listening to them, you know, just with our commitment and trying to get all of these amazing episodes out with brands like you guys.
Paula: So the point is well taken and definitely resonates with us.
Rajesh: I hope I’m able to help you guys.
Paula: Yeah, totally, totally.
Paula: So just to finish on AI then, Raj, you’ve talked about hyper personalization and again, it is the Holy Grail and again, the balance of the analytics and the human intelligence, I think, is what we’re talking about.
Paula: Is there any other area of Kanmo Circle at this point that you are using AI, whether it’s customer service or any other aspect of the business, or you just kind of, you are?
Paula: Oh, great.
Rajesh: No.
Rajesh: So yes, we do.
Rajesh: We do.
Rajesh: So in fact, we are already in a pilot stage for our merchandising solution, obviously, because that would make obvious sense.
Rajesh: We do employ AI in our retail stores to gauge a better understanding of how our consumers are interacting, and how they’re moving around in the stores.
Rajesh: Because again, it is an evolution.
Rajesh: Sometimes you’ll get really nice insights, and sometimes funny insights.
Rajesh: I’ll come to both of them.
Rajesh: I think previously what people used to do were, you would have a traffic counter, which is how many people came in, how many people went out, and simple numbers.
Rajesh: But like I said, a traffic counter gives you just a footfall.
Rajesh: But if you want to know more about the consumers, the numbers can tell a story.
Rajesh: That’s where AI comes in perfectly, because now the AI systems, our AI cameras can track the way the customers, once they enter a store, what are the sections they spend, which are the sections they go first, what is the depth of sections that they go to, how much time do they spend there, when you would imagine a retail store, you would think, okay, people generally, I would put up, this is my new arrival, this is my XYZ section, I would put the boy section here, the baby section here, but then it’s the consumers.
Rajesh: When they enter the store, what is the area that they are traveling to most?
Rajesh: It analyzes the traffic, not just the traffic coming in, but where they are going, which segments are they going, which categories are looking at, how much time they are spending, and then how and where they are going.
Rajesh: Then basis that you get a lot of insights in terms of how we should do our planning in terms of the plan of our stores.
Rajesh: If you’re running some local store marketing, if we have some promotions, if we have a new window display, how does it impact?
Rajesh: Because our AI cameras also detect how many people were interested.
Rajesh: For example, if you were to stand in front of my store and you’re looking in as a window, but you do not enter, so I know you are interested but you didn’t enter.
Rajesh: Now, by God’s grace, our interest to enterers are quite high, so it’s not a problem.
Rajesh: But imagine if you were to have, a lot of people who are interested but not entering.
Rajesh: I would love to know and I would love to speak to those consumers because they stood, looked at it, so there’s something they really liked.
Rajesh: But they failed to enter my store.
Rajesh: So these are the kind of insight that we are trying to derive.
Rajesh: Of course, on and off, we’d also have some funny observations because I remember for one of our brands and of course, I would not name the brands, but I’m sure consumers listening would easily understand.
Rajesh: We realized that there was one spot, because when we look at the metrics, if you see all sorts of heat maps, there was one section which was red, and the great time in this section was very red.
Rajesh: Obviously, just looking at that, we wanted to map it and see what section is this.
Rajesh: So many people are waiting and dwelling and staying there, because the hours of the time was sometimes upwards of 30-40 minutes.
Rajesh: Imagine if you were to see this, your first mind goes that, I think there’s something wrong in the data.
Rajesh: It can’t be like someone’s standing there for 40 minutes.
Paula: Yeah.
Rajesh: I realize it was one of our luxury stores, and that section where you saw a lot of red is the luxurious couch.
Rajesh: And then you go into the camera footage, the real camera footage, and you realize, these are probably husbands and boyfriends sitting on the couch.
Rajesh: So of course, we had a big laugh, but the thing is, this is how we look at, we saw the data, and we wanted to drive a story out of it.
Rajesh: Like what story is it telling?
Rajesh: Because the story wasn’t making sense.
Rajesh: But once we saw this, we all had a big laugh.
Rajesh: And obviously, me looking at it, I could clearly relate to those guys sitting on the couch, been there, done that.
Rajesh: So I was like, yeah, I think perfect.
Rajesh: So we know we have kept the couch at the right place because the men are happy, the women are happy, our consumers are happy, everything is good.
Paula: Totally.
Paula: Honestly, I don’t know why the women bring the husbands.
Paula: I leave mine at home.
Paula: I’m honestly like, he’s clearly miserable.
Paula: Don’t put him through that.
Paula: So but a great insight.
Paula: So thank you for that.
Paula: And as you were talking about the cameras outside as well, like, you know, for me as a regular shopper, I suppose, but, you know, often going to, I suppose, very high end luxury mall here in Dubai, there are certainly stores that are very intimidating that I just go, I don’t think I can even afford to set foot in that store, but I might be tempted, but just intimidated, you know, because it just looks too high end, whereas other stores are super welcoming.
Paula: And how are you supposed to know, even with all the design expertise, unless you do that analysis, to see, you know, what is the conversion rate of people from outside, at least coming into the store?
Rajesh: Because again, I think historically or legacy wise, when you speak to people, they’ll talk about very simple statistics of conversion rates.
Rajesh: I again like to look at it from a slightly different perspective.
Rajesh: The right way of looking at conversion rate is not from the number of people who are entering your store.
Rajesh: Because that’s basic mathematics.
Rajesh: But imagine if you give me an example of Dubai.
Rajesh: Let’s say you have a shop in Dubai, in a mall.
Rajesh: The amount of traffic in the mall is increasing, but the amount of traffic in your store is not increasing.
Rajesh: You would never have any idea because you are always comparing the amount of people coming into your store and doing your conversion rates.
Rajesh: Now, if the amount of traffic year on year in your store is still the same, but imagine the amount of traffic entering the mall has almost doubled.
Rajesh: There is a serious problem.
Rajesh: I mean, you should be driving in more traffic into your store.
Rajesh: This is the reason why the number of people who are interested in my store is one angle that we look at to say, if the number of people who are interested is slightly higher and the drop off from there to people who convert into entering my store is not significantly higher, then there’s something wrong.
Rajesh: I would love to know from the consumers, that they saw what they like, they didn’t enter, what is it?
Rajesh: Whether they were intimidated, or what are the factors that are driving, so we can make improvements.
Rajesh: Again, getting from the horse’s mouth is the best thing rather than us sitting and doing the assumptions, or simply saying, our conversion is this, our numbers is this.
Rajesh: Again, like I said, if they’re not telling me about my consumer, we tend not to look at it.
Paula: Indeed.
Paula: Very wise words, Rajesh.
Paula: So yeah, thank you for all of that.
Paula: So I always do wonder about the mathematics behind retail.
Paula: It’s certainly a fascinating industry.
Paula: And clearly, I’m in a city that’s just extraordinary in terms of those retail experiences.
Paula: So I’m sure everybody is spending a lot of time and effort trying to optimize those analytics.
Paula: But a very good point is no point just thinking about your own store and your own business, without speaking with the landlord and the mall itself, for example, for their data.
Paula: And then just seeing how your store is performing over time relative to their statistics.
Paula: So indeed, very inspiring.
Paula: So listen, we’re coming towards the end, Rajesh.
Paula: I do feel like we still have a lot we could talk about.
Paula: But I guess the future trends in loyalty is probably the one that I wanted to ask you about most.
Paula: And there’s obviously lots of challenges as well.
Paula: So either one, either tell us about what are you currently, you know, worrying about, what’s keeping you awake at night, or what do you think is most exciting going forward?
Rajesh: When it comes to it, I think nothing is worrying me.
Rajesh: I think it’s a lot of excitement because it has been evolving at such a rapid pace that all you’re thinking is, oh my God, we can do this as well.
Rajesh: Oh my God, we can do this as well.
Rajesh: It’s a matter of prioritizing it.
Rajesh: In terms of loyalty, I think, like I said before as well, hyperproposalization, I think we’re just touching the tip of the surface.
Rajesh: I think there is a lot more depth that we can get into.
Rajesh: Gamification is something that has picked up quite a lot in the last couple of years.
Rajesh: I wouldn’t be surprised.
Rajesh: Again, it is not because someone suddenly woke up and said, guys, let’s do gamification.
Rajesh: Look at the generation of consumers we are catering to.
Rajesh: Gamification works the best.
Rajesh: Most of the current generation, or at least 30-40 percent of current generation, were born with mobile phones in their hands.
Rajesh: They are unlike us old schoolers who bought their first mobile phone in their 20s after a lot of stuff.
Rajesh: So they understand gamification.
Rajesh: In fact, I was reading a study where the top companies, the top loyalty programs have all, 40 percent of them have moved into gamification.
Rajesh: So that is something that we are also looking at seriously.
Rajesh: I think Capillary has some exciting products in that sphere.
Rajesh: Hyper-personalization for sure.
Rajesh: I think something else that we would see is hasn’t come fully.
Rajesh: I think you would also in the future probably see different loyalty programs sort of doing an interchange, so talking to each other.
Rajesh: Imagine loyalty programs tying up with Amazon’s loyalty program.
Rajesh: Because consumers would want far more flexibility and as many options as possible.
Rajesh: So that is something that I’ve seen in certain markets between some retail chains working out with the marketplaces.
Rajesh: That is one.
Rajesh: Gamification for sure has a massive future.
Rajesh: I mean, I can tell you, I’ve seen quite a lot of buzz around it.
Rajesh: And to be very, very honest, initially when a couple of years back when I was thinking about this, and when someone was discussing this with me, I was like, come on, it’s a kid stuff.
Rajesh: This doesn’t work.
Rajesh: Like why would you do this?
Rajesh: But I’ve seen the numbers and the numbers are really, really, really nice and the engagement is crazy high.
Rajesh: So hyper-personalization, full-fledged gaming, gamification, flexibility in earning and the moving points, more experiential benefits.
Rajesh: I think in the next four to five, I’m sure they will take center stage, and become the norms of what a loyalty program is.
Rajesh: It will be its basic stuff that we need to have.
Rajesh: And then AI has no limits, actually.
Rajesh: So because AI, we would see, I’m sure if you meet same time next year, I would probably tell you some more stuff in AI that would come up in loyalty, because as the consumers are evolving, technology is evolving around the same.
Rajesh: AI is probably in its exponential phase.
Rajesh: So I think the future is extremely bright.
Rajesh: And it is fun.
Rajesh: A lot of things to do.
Rajesh: And I think that’s what gives me a big excitement.
Paula: Okay.
Paula: Okay.
Paula: That’s amazing.
Paula: I have one final question.
Paula: I’ve just remembered Raj, because you briefly mentioned your main forms of communication.
Paula: And as a content creator, you won’t be surprised to hear that that’s really what gets me excited.
Paula: So you’ve talked about SMS, you’ve talked about email, and then WhatsApp.
Paula: And I think there’s still a lot of markets.
Paula: I think a lot of our listeners in the US, for example, don’t use WhatsApp really at all from what I’ve seen.
Paula: They use other messaging platforms, but certainly in South Africa, South America and India.
Paula: And it sounds like Indonesia as well.
Paula: WhatsApp seems to be becoming the dominant platform for communications and loyalty.
Paula: Is that fair to say?
Paula: Or how does it, you know, what kind of does it represent in terms of how people do engage?
Paula: Do they, do they like it?
Rajesh: I think, I think, yes.
Rajesh: And I can probably explain this a bit more from, from the customer context, because I know how I’ve worked in Europe, so I know how, how the audience there works.
Rajesh: And pretty, pretty much in Europe or such first world markets, WhatsApp as a channel would be seen as communication channel between friends, not for a company to reach out to me.
Rajesh: Whereas, whereas in these parts of the market, it is the main form of communication.
Rajesh: It is the quick form of communication and consumers like it again, because it is far more easier for them to react.
Rajesh: I mean, if you like the offer that you received on a WhatsApp, one click from there, you straight away go to the website, or the marketplace, or the channel, or the platform to do a transaction.
Rajesh: In some of these markets, you can actually straight away go to the WhatsApp commerce and within WhatsApp alone, you can finish up your entire transaction without even stepping out of the platform.
Rajesh: So I think that is what the consumers need.
Rajesh: The open rates, the delivery rates are extremely high.
Rajesh: I think if you look at email rates across most markets, and I’m sure, and thanks to Google, I’m very sure Gmail arranges your inbox in five separate sections of updates, socials, promotions, and your primary inbox.
Rajesh: Any newsletter, any emailers, any communication from brands would not end up in your primary unless you drag it to there.
Rajesh: It would end up in promotions.
Rajesh: Now, how often?
Rajesh: Everyone is busy today as well.
Rajesh: How often are you going to actually?
Rajesh: Purposefully log in to your inbox, go to promotions to check, okay, let me see what promos do I have.
Rajesh: You don’t, but tastefully sent, like I said, target it, anticipate it.
Rajesh: WhatsApp messages sent to your consumers can actually increase your conversion rate by up to four times.
Rajesh: Now, and in today’s world, like I said, if that’s what the consumers want and you are not doing it, then you can’t complain that your cost of customer acquisition is going higher and we have to listen to our consumers.
Paula: Indeed.
Paula: Well, more wise words and a perfect place to finish up Rajesh.
Paula: Was there anything else you wanted to mention before we wrap up?
Rajesh: I think, no, it was a fabulous conversation, Paula, and I’m very, very happy to be part and to speak to you today.
Rajesh: I hope the discussion that we had would make be helpful to your listeners and happy to welcome you to Indonesia, not just Bali, but you can explore some more islands here.
Paula: Oh, I’d love that.
Paula: Absolutely, Rajesh.
Paula: Yes, you can consider that a seed planted.
Paula: So please, God, as and when I get to Jakarta, I’ll definitely be reaching out to connect with you.
Paula: So with that said, I want to say a huge thank you to Raj Grover, author of Start Unselling Now and also the group vice president of AI Digital and Omnichannel for Kanmo Group.
Paula: Thank you so much from Let’s Talk Loyalty and Loyalty TV.
Rajesh: Thank you, Paula.
Paula: Thank you so much for listening to this episode of Let’s Talk Loyalty.
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