Mother Dairy takes lead on digital in India

By Saurabh Swarup, Liquid Barcodes´ GM APAC region report from India on the convenience retail market.

Mother Dairy Fruit & Vegetable Pvt Ltd., is an Indian company that manufactures, markets and sells milk, milk products and other edible dairy products. Its milk products include cultured products, ice cream, cottage cheese and clarified butter (ghee) under the Mother Dairy brand. The company also sells edible oils, fresh fruits and vegetables, frozen vegetables, and processed food like fruit juices, jams, pickles etc. Mother Dairy was founded in 1974, as a wholly owned subsidiary of the National Dairy Development Board (NDDB).

Safal, Fruits & Vegetables arm of Mother Dairy was the first company to organise the fruit and vegetable business in India. Today Safal is the market leader in organised fruit & vegetable retail business in Delhi NCR and operates the largest number of F&V Stores in Delhi NCR and has significant presence in Bangalore. Over the years, the brand has gained significant customer support and has become a household brand with market leadership and presence across the country.

Mother Dairy has a total of 1,400 milk booths (including franchise and kiosks), 390 Safal stores and 4,500 ice cream carts. With this store count Mother Dairy is by far the largest convenience retail chain in India, catering for the on-the-go Indian consumer. In Delhi NCR, Mother Dairy even has a milk home-delivery services through its agents.

Mother Dairy is an innovative & progressive retailer. They have been pioneers and early adopters of several path-breaking initiatives. One such example is that all their booths are run by Ex – Armed Forces Officers, respected countrymen who have served the nation for a long time. Mother Dairy has given them a unique opportunity to be gainfully occupied post-retirement, by making them concessionaire to run Mother Dairy stores.

Digital payments boom overnight

Recently India has witnessed a digital payments boom. On November 8th 2016, the Government of India announced the demonetisation of all ₹500 (US$7.40) and ₹1,000 (US$15) banknotes. The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism. The sudden nature of the announcement and the prolonged cash shortages in the weeks that followed created significant disruption throughout the economy- including for retailers. The Indian government is now encouraging digital payments and a cashless economy; so retailers have turned around quickly opting for digital payments such as mobile wallets.

In fact, Mother Dairy was already accepting payments through mobile wallets before the government announcement came. Mother Dairy has a partnership with the largest mobile wallet in the country, PayTM and accept digital payments across their entire network of stores. The digital payment process has been kept simple, both for the consumer as well as the concessionaire. Each concessionaire has a unique QR code provided by PayTM, which is linked, at the backend, to the concessionaire’s account. The consumer scans the QR code with his PayTM app and the money gets transferred directly to the concessionaire’s account.

With the launch of PayTM Mother Dairy was able to build further on its community program; 5% of proceeds from payments through PayTM went to AFFD War Widows Fund for a certain period.

Online to offline – leveraging digital to drive traffic to store

When most of the other retailers were rushing to mobile wallets for strategic tie ups, Mother Dairy again was one step ahead. Mother Dairy recently launched their own app with the objective of driving incremental footfalls to their stores.

Mother Dairy decided to leverage the online channels to drive traffic to their physical stores. Despite the fact that Mother Dairy does not have a PoS (Point of Sale) system, they have successfully leveraged Liquid Barcodes´ digital couponing and rewards platform in a closed-loop system with their physical stores.

Mother Dairy has launched a consumer app with unique coupons, in a country where digital couponing through the use of unique barcodes and a scan-based redemption process is absolutely new. To overcome the challenge of not having a PoS system in their stores, Mother Dairy has rolled out an Android based scanning application- referred to as the Mother Dairy merchant app. The merchant app scans and redeems unique barcodes in real time. The redemption process for the concessionaires has been kept simple so that the transaction time and speed of service is not impacted.

Delivering real, instant customer value

In the Mother Dairy app consumers find unique single-use and multi-use coupons, stamp cards and instant feedback options triggered by store visits. Mother Dairy has leveraged gamification concepts, such as digital scratch cards- with their dairy products as rewards.

Consumers that download the app are rewarded instantly with a sign-up reward – a single-use unique coupon which is scanned at a nearby booth when claiming the reward.

To ensure active use of the app Mother Dairy pushes out a new deal every day and this is communicated with push notifications. Every morning the user wakes up to a fresh offer called “Today’s Special” which is a one time use coupon, that disappears from the app either after usage or at the end of the day if left unused.

At the beginning of each week Mother Dairy also pushes out a “Weekly Special” deal. This is single-use coupon valid for the entire week. The consumers who use the Weekly Special are rewarded with a follow-up coupon, which is valid for two days. This mechanic motivates their next visit to the booth and increases their purchase frequency; driving increased purchase frequency and thus customer loyalty is the main objective of Mother Dairy´s app program.

The feedback feature of the app is activated when a user scans a specific coupon in-store: Mother Dairy defines which coupons should trigger a feedback opportunity. A feedback opportunity allows the consumer to rate the store visit and give feedback to this particular store. After 5 ratings the user is rewarded with an exciting offer. The average ratings given to a particular booth are then displayed in the store locator section of the app for all consumers and concessionaires to see. This gives a fully transparent benchmarking of consumers shopping experience across the Mother Dairy stores.

Another interesting feature in the app is “Refer a friend”. Once an existing app user successfully refers a friend (read: the friend downloads the app and registers) the user gets a referral reward in the app that he or she can redeem in-store.