What is Flipkart First?
Flipkart.com , the homegrown Indian e-commerce company modeled on the lines of Amazon.com has launched its "Flipkart First" services.
"Flipkart First" is a paid subscription services which promises benefits like -
1- Free- In a Day Guarantee Delivery
2- Free shipping
3- 60 Day Replacement Policy
4- Priority Customer Service with special Hotline for "Premium Customers"
To promote this service , Flipkart is offering 75,000 Free 3- month Subscriptions on user registration. Further Details can be found on flipkart by clicking this link
How similar is this service compared to Amazon Prime in US ?
For users , who are not aware about Amazon Prime is Amazon's paid service in available in the US, Japan, the UK, Germany, France, Italy and Canada , summarizing the main services offered under Amazon Prime-
1- Amazon Prime is a paid subscription services offered by Amazon at $99/year.
2- Under Amazon prime , Amazon offers-
a) FREE Two-Day Shipping on millions of items
b)Unlimited instant streaming of thousands of movies and TV shows with Prime Instant Video
c)Free books each month through Kindle First and the Kindle Owners' Lending Library
Similar to Amazon Prime , Flipkart First offers multiple services to the customer individually most of which is paid service.For e.g. For normal customer , Flipkart charges Rs 90/item for its "In a Day Guarantee Delivery" but under "Flipkart First" this service will be free.
Compared to Amazon Prime . Flipkart First is more extensive in terms of the overall benefits. It will be interesting to see what is the Price Point that Flipkart chooses for its Flipkart First service. Price Point is extremely important for the Price Sensitive ,Discount Hunting Consumers.
How will Flipkart First impact the fortunes of Flipkart ?
Fllipkart seems to have designed "Flipkart First" with two goals in mind: increase customer loyalty (by improving stickiness of the customer due to upfront payment), and to a lesser extent, increase impulse buying.
When a customer has committed upfront money in the service ,he/she is more likely to purchase from Flipkart compared to other websites .Once a customer becomes accustomed to the convenience of the service, he/she is expected to part with the membership fee to avoid downgrading to regular shipping rates and delivery schedules.
Flipkart seems to have been guided by the super success of "Amazon Prime" . Some of the interesting facts about impact of Amazon Prime is shared in the infographic below -
How will Flipkart competitors react to this move?
Flipkart 's primary competitors are Amazon , Snapdeal in General Retailers and Myntra and Jabong in Fashion Retailers. Other than Amazon , all other companies have loyalty program based on transactional value or spend of the customer. None of the companies having Loyalty Programs offer have paid subscription program.
Considering this context , Flipkart First seems to be a master stroke by Flipkart as it has created a differentiated service compared to its competitors to improve the overall retention of the customers. Customers will be able to enjoy better services compared to Loyalty Program of other companies at a nominal price compared to what they would have spent to become a high tier member of the Loyalty program.
I expect some of the competitors to come up with similar programs in the coming months. It will be interesting to see how these competitors plan to introduce these services considering they already have a loyalty program in existence!
Cheers!
Always Positive
9th May 2014
Flipkart.com , the homegrown Indian e-commerce company modeled on the lines of Amazon.com has launched its "Flipkart First" services.
"Flipkart First" is a paid subscription services which promises benefits like -
1- Free- In a Day Guarantee Delivery
2- Free shipping
3- 60 Day Replacement Policy
4- Priority Customer Service with special Hotline for "Premium Customers"
To promote this service , Flipkart is offering 75,000 Free 3- month Subscriptions on user registration. Further Details can be found on flipkart by clicking this link
How similar is this service compared to Amazon Prime in US ?
For users , who are not aware about Amazon Prime is Amazon's paid service in available in the US, Japan, the UK, Germany, France, Italy and Canada , summarizing the main services offered under Amazon Prime-
1- Amazon Prime is a paid subscription services offered by Amazon at $99/year.
2- Under Amazon prime , Amazon offers-
a) FREE Two-Day Shipping on millions of items
b)Unlimited instant streaming of thousands of movies and TV shows with Prime Instant Video
c)Free books each month through Kindle First and the Kindle Owners' Lending Library
Similar to Amazon Prime , Flipkart First offers multiple services to the customer individually most of which is paid service.For e.g. For normal customer , Flipkart charges Rs 90/item for its "In a Day Guarantee Delivery" but under "Flipkart First" this service will be free.
Compared to Amazon Prime . Flipkart First is more extensive in terms of the overall benefits. It will be interesting to see what is the Price Point that Flipkart chooses for its Flipkart First service. Price Point is extremely important for the Price Sensitive ,Discount Hunting Consumers.
How will Flipkart First impact the fortunes of Flipkart ?
Fllipkart seems to have designed "Flipkart First" with two goals in mind: increase customer loyalty (by improving stickiness of the customer due to upfront payment), and to a lesser extent, increase impulse buying.
When a customer has committed upfront money in the service ,he/she is more likely to purchase from Flipkart compared to other websites .Once a customer becomes accustomed to the convenience of the service, he/she is expected to part with the membership fee to avoid downgrading to regular shipping rates and delivery schedules.
Flipkart seems to have been guided by the super success of "Amazon Prime" . Some of the interesting facts about impact of Amazon Prime is shared in the infographic below -
How will Flipkart competitors react to this move?
Flipkart 's primary competitors are Amazon , Snapdeal in General Retailers and Myntra and Jabong in Fashion Retailers. Other than Amazon , all other companies have loyalty program based on transactional value or spend of the customer. None of the companies having Loyalty Programs offer have paid subscription program.
Considering this context , Flipkart First seems to be a master stroke by Flipkart as it has created a differentiated service compared to its competitors to improve the overall retention of the customers. Customers will be able to enjoy better services compared to Loyalty Program of other companies at a nominal price compared to what they would have spent to become a high tier member of the Loyalty program.
I expect some of the competitors to come up with similar programs in the coming months. It will be interesting to see how these competitors plan to introduce these services considering they already have a loyalty program in existence!
Cheers!
Always Positive
9th May 2014
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