point
Menu

As Free As It Can Get

I am sure stalwarts in the business have always evaluated strategic models. But not so long ago there used to be a time when I was growing up to be a man, I had got my first mobile phone. A phone which was still a luxury was a source of excitement for almost a year until it lost the coveted space in my drawer for something more precious. It lost its place to a slightly more expensive Mp3 player. The mp3 player was the most obsessive thing until it too lived its life and about 6 months later the attention shifted to a laptop. This is the course that a not so young Indian Man’s “Technological Journey” took. And bafflingly I was born in the 80’s making me a teenager in the nineties and a man in the present day world.  Today the life of a product is not as long as those in the 1990’s.

India saw a period of liberalization in the 90’s which led to the economy opening its doors to the world and that was when we had a chance to see an array global players in the market introducing us products which we had never heard of. Mobile Phone was still called Cell Phone and the internet’s job was solely to cater to the loyal email readers. Post cards still were a veritable competition to emails. Then came a period when the unlimited broadband was introduced and we saw the paradigm shift from the emails to Orkut and thereby to Facebook. The shift has been driven by the psychological maturity of the consumer and more so I feel the movement has been possible due to the internalizing effect of the theory of things being apparently free.

Come 2011, The Indian economy saw the rise of a new market. Online Market. I received a package yesterday which was delivered by a company called Flipkart and the excitement of the new materialistic thing lasted only about 2 hours until I was back on Flipkart to search a new product. Bizarre as it may sound, that is the ingenuity of the term “Free” and the profound effect of the term. Free delivery and Cash on Delivery assured the consumers that at the time of purchase all you got to do is not look back and do an express checkout, lest you should change your mind. The shift has primarily not been only about the products available online but also about products which do not exist at that particular time, the evidence being the pre-booking wave in consumerism. End of season sale pushes the indifferent consumer to a “ Death Delusion Shopper” state, a term to describe a shopper who suddenly has a urge to shop as if there is a no tomorrow for him/her. The primary reason, the covert theme the seller seems to engrave in the minds of the consumers “Buy one Get One Free, if you don’t take this I am sure you will be sorry”. It is a grim reminder of how the maturity of the shopper is being invaded by impulsiveness. And this is possible primarily because of the consumer’s need to satisfy themselves that they have got a good deal. This might be because of 2 Factors :

1) The need to satisfy our economic needs and to be on top of the particular bargain

2) Our understanding of the psychological effect of money being more useful as plastic than paper.

The Free mantra really works in a country with a population of 1.6 Billion, where the word “free” is a stimulator not only for the poor but also for the significant population called the Middle Class who are acolytes of “Free” Market and that quite literally refers to the burgeoning trend of a market which compete in offering products dishing out the perceived feel of “Free” to the consumers. Now this is what led to the shift to the online market where the businesses knew that if they are able to bring together the essential ingredients of Low price and “Free Delivery” or “Cash on Delivery” (which necessarily means the consumer need not pay when he/she purchases and effectively solving the “Guilt of Shopping” problem). India has seen a tremendous change in this space in the recent times where shoppers no longer have to visit a store and deal with intrusive salesmen and buy a product just out of need to not hurt a salesman who has invested about 2 hours putting up with you outside the trial room. The guilt now is camouflaged as impulsiveness and Delivery of impulsiveness at home and that too “Free”. Nothing wrong in that. After all business strategies have to be revisited and the strategic models of yesteryears have to be re-invented and rather resurrected to adapt to the new age which prefers the delivery of products be it books or food or clothes.

The delivery model is not new in India. Not long ago there were instances when people bought electronic products and bargained hard for a free delivery at home, for which the seller sulked and gave away with a handshake which meant that he/she has sacrificed a lot on his/her profits. Paradoxically, and not so long ago, there used to be a time when door to door salesmen had a whole range of products being sold individually (most prominently Consumables, magazines) and the consumers used to promptly close the door on them. The door delivery model is no different from this except that the consumers buy the product online and feel more secure when the product is online and they see the certainty and trust in the fact that they are able to compare the price and satisfy themselves that a good bargain has been struck which in turn meanders its way to “Free Delivery”. That brings out the bizarre explanation as to why we trust websites which offer a product rather than a salesman who offers the same product at our door step. What has changed? As a matter of fact nothing has. This strategic model has just been extended to cover a whole range of goods and interestingly striking the chord at the right space where the consumer feels he/she is most educated about competitive prices. This obviously is a win-win for both the seller as well as the consumer. Both are able to deliver and buy the product at a cheaper price respectively. Will this model sustain? Time will tell. But one thing is here to stay and that is the obsession with “Free”.

Yesterday when I went to a local store to buy a shirt, the size I was looking for was not available. I approached the manager and he told me “Sir, search our online portal. This size is available” as I turned back he was quick enough to dole out those beautiful words “Don’t worry sir, it is free delivery and we do have CASH ON DELIVERY system”. I smiled and searched for the product online and interestingly it was available at a 50% discount which effectively meant “Buy one Get on Free” for me and I was tempted to make it a “Cash on Delivery” purchase. The next day the shirt was delivered with a smile at my doorstep as I handed out the money to him. The market place has effectively moved from a marketplace to the front Porch of my house and the banality of shopping which immutably was a pleasant experience just a decade ago ended right there.