Retail industry sucks!

Companies working in retail do not produce anything. They just sell other company’s products.

Also, retail companies face a lot of competition because people can buy their products from any local Kirana store.

That is why there are no margins and profits.

It’s challenging to survive in such an environment.

Yet Dmart and Big Bazaar are thriving.

Surprisingly, both companies are opposite of each other, and these are not my words; these are the words of Kishore Biyani, CEO of Future Group (Big Bazaar’s parent company).

You can learn a lot from them if you are a business owner (especially a retail business owner).

In this article, we are going to look at of Dmart and Big Bazaar’s digital marketing strategies. We’ll take four lessons from them:

#1. Create a strategy to get out of the commodity trap

#2. Know your target audience

#3. Communicate with your target audience to build a reputation

#4. Build a profitable and scalable business model

Let get started.

#1. Create a strategy to get out of the commodity trap

Businesses that are not unique and easily replaceable are stuck in a commodity trap.

Unfortunately, retail businesses are a textbook definition of companies stuck in the commodity trap.

Retail companies are not selling anything unique. People can get products like Colgate and Lux from anywhere.

Also, there are many Kirana stores in India, and customers buy from them only because they are near their homes. Even loyal customers switch their favorite retail stores when they move to other locations.

This is a big problem with retail companies because its difficult to acquire and retain customers if the company is stuck in this trap.

However, people usually travel long distances, buy more products, and frequently visit Dmart and Big Bazaar. Its because these two have escaped the commodity trap. People do not think of these stores as just another Kirana store.

Also, both the stores have adopted entirely different approaches to get out of this trap.

Big Bazaar built a reputation for giving excellent service to people. They provide a great in-store experience to customers. Most of their stores are air-conditioned and spacious. They have many sales executives to help customers. They also have a lot of products to choose from, and they are organized systematically.

Dmart, on the other hand, built a reputation for selling products at a meager price. They do not have a great in-store experience, but they give huge discounts on almost all of their products. While Big Bazaar gives a discount on special occasions, Dmart offers discounts daily. Their brand tagline is “Daily Savings, Daily Discounts.”

Dmart’s logo and tagline

So the only way to get out of this trap is to offer something unique. Try to differentiate your business from other retail stores. Build a reputation for being different. You can build a reputation for high-quality service (like Big Bazaar) or low price (like Dmart).

#2. Know your target audience

It’s easy to consider every person on the planet as your target audience because you want to get as many customers as possible. But you can’t satisfy everyone. 

Let’s see what Big Bazaar and Dmart are doing.

Since Big Bazaar and Dmart are building their reputation in a very different way, they also have a very different target audience.

Big Bazaar’s target audience is upper-middle-class people who frequently visit malls and buys branded products. They love shopping and enjoy a good shopping experience.

Dmart, on the other hand, is targeting lower-middle-class people who like to buy products at the lowest price. That is why Dmart uses the tag line “Buy smart, save big” in their ads.

Your target audience will also differ, as you try to build a reputation. So know your target audience and align all your efforts to convert them into delightful customers.

#3. Communicate with your target audience to build a reputation

We know that it is essential to build a reputation to escape the commodity trap. The reputation can be of high-quality service or low prices.

But how do you build a reputation?

To build a reputation, you have to communicate with your target audience.

Big Bazaar, for instance, has a very active online presence. They are also using all kinds of digital ads like Facebook ads, YouTube ads, and Google ads.

Big Bazaar’s Facebook ads
Big Bazaar’s YouTube ad showing their in-store experience and attractive discounts.
Big Bazaar’s Google Display ads

Because of these efforts, Big Bazaar has a vast number of people following their social media pages.

#Social Media FollowersBig BazaarDmart
1Facebook likes1.7M8.5K
2Instagram Followers303K0
3YouTube subscribers324K0
4Twitter109K0
5LinkedIn19K0

Moreover, they have a well-designed website to get online orders as well. They are actively optimizing it to rank high on Google. As a result, they are getting 3.5 million visitors every month on their website.

Apart from digital ads, they also do TV and newspaper ads.

Dmart, on the other hand, doesn’t use digital ads at all. That is why they don’t have many followers, as you can see in the table above. And they get only 2 million visitors every month on their website, which is ~60% less than that of Big Bazaar.

They rely entirely on newspaper ads to attract customers.

Dmart’s newspaper ad

They don’t use digital ads because they are targeting lower-middle-class people, who are not tech-savvy. This also helps in giving more discounts to their customers since they don’t have to spend a lot on different types of ads.

Communicating with their target audience is a crucial part of Dmart and Big Bazaar’s digital marketing strategies. You should also do the same to attract your target audience.

#4. Build a profitable and scalable business model

Once you start communicating with our target audience, you will get more customers and more sales.

But getting sales is not enough, you need profits as well. So, your aim at this point should shift towards making a profitable business model.

Check out some financials of Big Bazaar and Dmart below:

#Financials (Mar’ 19)Big BazaarDmart
1Income20K19K
2Profit732936
3Number of stores398176
4Income per store50108
5Profit per store25

All figures are in Rs. (in Crores)
Source: annual report

Since Big Bazaar is advertising and communicating more, you can see that they have more income than Dmart. It’s also because Big Bazaar has more stores than Dmart.

But their income per store is half than that of Dmart. This shows that Dmart’s business model is more profitable and scalable.

To clarify, if Big Bazaar opens another store, they will get ~ ₹50 crores in income, but Dmart will get ~₹108 crores.

You can see a similar trend in profits as well. If Big Bazaar opens another store, they will get ~ ₹2 crores in profit while Dmart will get more than twice i.e., ~ ₹5 crores.

So building a profitable business model will help you in scaling your business.

But why is Dmart’s model more scalable and profitable than Big Bazaar’s model?

The reason behind this is Dmart’s cost-cutting strategies. They don’t spend a lot on giving an excellent in-store experience. Their stores are not at expensive locations, so they don’t have to spend a lot on rent. They don’t spend a lot on marketing and advertising as well.

 On the other hand, Big Bazaar rents out spaces in posh areas and malls. They spend heavily on giving an exceptional in-store experience.

That is why Dmart’s business model is more scalable and profitable.

But this doesn’t mean that Big Bazaar should change its model to be more like Dmart’s model. Remember, they both are targeting completely different audiences.

Conclusion

So that was all you can learn from Dmart and Big Bazaar’s digital marketing strategies.

Remember that Dmart and Big Bazaar are 20-year-old companies. They took a long time to build a massive barrier to entry for their competitors.

Dmart, like Mc Donalds and has been buying land from the profits of its stores. That is why they don’t have to pay any rents. This is what makes their business model so powerful.

Big Bazaar has also worked a lot in building their brands and improving their in-store experience. They use customers’ buying behavior data to arrange their products in the most effective way possible.

Because of these efforts, it’s tough to beat them.

Having patience and persistence is something we all can learn from them.

I hope that you like Dmart and Big Bazaar’s digital marketing strategies.

If you did, please leave a comment.

Thanks for reading!

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