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Pitch CMO Summit 2011: Hariyali Bazaar – Organised rural

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When Hariyali Kissan Bazaar, a rural retail chain, was launched in 2000, it offered products catering to the needs of sugar mill farmers to help them produce better quality crop. Its stores offered agronomical services, fertilisers, pesticides, seeds, animal feeds, and irrigation equipment. Today, the chain has 275 stores, across eight states.

The Challenge
As the retail chain entered new product categories like FMCG, consumer goods and durables, apparel, and lifestyle products in 2005, it faced various challenges. Operating in fluctuating rural incomes amidst a credit culture prevalent in local kirana shops was another challenge.

Strategy & Implementation
On a broader level, the retail chain worked with a two-pronged approach. First, it entered the rural space to help farmers increase their income and then sell branded products to them.

Nirmallya Roychowdhury, Head - Brand & Marketing, Hariyali Bazaar

The retailer also widened its product portfolio and services to become a one-stop solution for village consumers. Besides, agri-products, FMCG, grocery, lifestyle products, it added retail banking, financial services, LPG outlets and even a motorcycle showroom.

The ‘touch and feel’ experience brought an edge to Hariyali stores as consumers otherwise were not able to get such experience in local kirana stores.

Unlike the metros, where purchases happen throughout the month, spending in rural areas depends a lot on factors like, rain and agri-produces; and maintaining footfalls during rest of the year was a major challenge for the retail chain. To cope with this, the retail chain did an internal research on rural income pattern. As the research found that 30-40 per cent of the people in rural areas were living on monthly salary and hence had monthly shopping basket, ‘Hariyali Kissan Bazaar’ thought of expanding its customer base beyond farmers.

The chain copied Big Bazaar’s concept of ‘Sabse Saste 10 Din’ (28th to 7th of corresponding months) to attract salaried customers in the locality. To encourage consumers for repeat buying, the chain started a loyalty programme, ‘Hariyali First’, a point based programme that has differential point systems for different categories. Once the threshold of 100 points is achieved, the points can be redeemed against a product worth Rs 50.

To establish communication with villagers, which largely has to be ‘direct’, as people take personal attention more seriously in rural areas, Hariyaali Bazaar found a cost-effective media vehicle in increasing number of mobile connection is rural areas. The campaign was designed as a voice message for handphones as the chain believed that “In rural areas, where literacy level is still low, people are more receptive to the voice message than the text message.”

Another fact was that 90 per cent of customers visiting the stores were male and the challenge here was to make housewives visit these stores. Nirmallya Roychowdhury, Head – Brand & Marketing, Hariyali Bazaar, believes that pulling in housewives and making them visit the stores more frequently was important as average spending per visit by a woman customer is always higher. “Women exactly know the requirement of their household and chances that they will pick more than what they have initially thought of is very high,” he says.

Realising that village women mostly come out of their houses on festivals or special occasions, the chain designed special occasions like cookery contests to pull in housewives to the stores.

The retailer also worked on its product stocking and assortment, to suit pricing need of village consumers. It worked on its sourcing system to match price points that rural consumers can afford. For this, it launched private label products under different categories, especially in food and grocery, as 60 per cent of shopping basket in rural areas consists of these product categories only. Also, it stored a mix of regional and national brands keeping in mind the regional preferences of customers. For example, while it sold RC Cola in its stores across North India, it stored Thums Up in Andhra Pradesh as consumer preference for the particular brand in that region is very high.

As the chain targeted non-farming people in villages, it renamed its stores from ‘Hariyali Kissan Bazaar’ to ‘Hariyali Bazaar’, as the notion among non-farming people was that the store was for farmers only. The colour of the logo too changed from green to red to change the notion.

Results
Hariyali Bazaar, which started as an agri-product based store – for sugar mill farmers – has now morphed into a multi-brand retail chain dealing in different categories, ranging from FMCG to lifestyle and consumer electronics to financial services.

Earlier, the split of male-female shoppers was 90:10, which has now come down to 80:20. The loyalty programme ‘Hariyali First’, launched in July this year, now claims about 1.5 lakh members and every day, around 1,000 members are being added to this programme.

According to an internal data compiled by Hariyali, from July to October this year, 31 per cent of the consumers are coming back to stores over and over and 40 per cent of them are coming back through loyalty bills.

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