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Rediff.com  » Business » Big Bazaar's new shopping scheme finds takers

Big Bazaar's new shopping scheme finds takers

April 23, 2013 10:15 IST

RetailAbout 20,000 customers have enrolled for the Future Group-owned Big Bazaar’s latest shopping scheme, which requires shoppers to pay money upfront to join for membership.

To join ‘Big Bazaar Profit Club’, a customer has to pay Rs 10,000, after which he can shop for Rs 1,000 a month for 12 months, thus getting two months’ shopping free.

“It is a loyalty and prepaid card for our customers.

"Many customers are liking it and we have seen over 20,000 customers enrolling for it,” said a senior executive with Future Group.

On being asked about the legality of the scheme, the executive said it is akin to a prepaid card and it has nothing to do with money making.

“Many retailers and jewellers are doing such schemes,” he pointed out.

A mail sent to a Future Group spokesperson on Saturday did not elicit any response.

However, the company’s peers say it is an expensive scheme for the retailer due to heavy discounts they offer and the administrative costs involved.

“It is a good way for them to get new cashflows.

"This way, they can go and buy new goods,” said the chief executive officer of a retail chains on condition of anonymity.

"However, according to the Future Group executive, the new scheme has “nothing to do with money”.

He said, “It is about loyalty of customers coming in 12 times a year and results in business for us.”

An executive from a rival firm said the cost of the scheme was very high, given that Big Bazaar is offering goods worth Rs 12,000 for Rs 10,000.

“The cost of managing so many accounts is high.

"Administrative costs come to two to three per cent of the scheme. I wonder how they will make money. We can’t do it,” the executive said.

Raghavendra Kamath in Mumbai
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