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Tata Neu: Why the cross-selling idea may not sell

Tatas, in the past, have benchmarked practices for others to follow, creating brand equity where consumers expect top-notch quality from them. In the current case, it may be intriguing to see if this brand equity helps them tide over their existing challenges with Tata Neu

Published: Jun 9, 2022 10:16:21 AM IST
Updated: Jun 9, 2022 10:45:07 AM IST

Tata Neu: Why the cross-selling idea may not sellThe critical question is, who would be enticed to join the Tata Neu app? Is it existing customers of TATA or new customers that do not currently use any of TATA products?

Tata Neu app was officially launched for Indian consumers on April 7, 2022, with the chairperson introducing it as a new way to discover the world of Tata. He said that the aim behind the app is to make the life of Indian consumers easier and simpler. Tata Neu app is a "Super App" with the 154-year-old conglomerate's brands like Westside, Tata Play, Tata Cliq, Starbucks, Qmin, IHCL, AirAsia, Cultfit, Croma, 1mg, and BigBasket available on a common platform. In addition, the app also has a provision for UPI payments.

It is a 'Tata only' app where no third-party apps are onboarded. It seems like TATA is betting on its ability to cross-sell. For example, they hope to sell a holiday wardrobe to someone booking air tickets to Goa. They have Neu coins and Neo pass as key players in their cross-sell model. Neo coins are earned on each purchase made on the Tata Neu platform, which can then be redeemed across product categories.

In theory, it is a brilliant need of hour idea as consumers are currently using multiple apps which are only eating space on their phones and occupying mental real estate. The conglomerate has kept the parent apps functional, giving consumers two integrated platforms. This seems like a safe and logical decision. It will likely help the customer through the change management process. Then, the critical question is, who would be enticed to join the Super App? Is it existing customers of TATA or new customers that do not currently use any of TATA products?

Likely, onboarding existing customers who already use their apps or buyers of their products is more straightforward than acquiring new customers. However, the challenge is not only making the current customer switch from the parent app to Tata Neu but also converting the customer from an air ticket buyer to an apparel shopper on the app. From a consumer perspective, if I buy groceries on BigBasket, why should I switch to Tata Neu when the products and their prices are the same on both platforms? The points alone may not be sufficient motivation. Roughly, you get 1-5 percent on purchases, depending on the product you purchased, which you can only redeem after the return period is over—are customers this patient or so price-sensitive?.

With technical challenges, complicated navigations, cluttered interfaces, limited offerings, and high expectations, they may soon realise that their cross-sell model may not work. For the super-app to work, they may have to abandon their 'Tata only' cross-sell model and include third parties to increase choices along with other necessary improvements. If they want to stay put with their current model, the incentives must be so high that consumers forego a vast number of choices available to them (at their fingertips). The incentives could be non-financial such as quicker deliveries and price guarantees (for example, the Everyday Low Price Guarantee that Walmart has popularised).

Tatas, in the past, have benchmarked practices for others to follow, creating brand equity where consumers expect top-notch quality from them. In the current case, it may be intriguing to see if this brand equity helps them tide over their existing challenges with Tata Neu or will their brand equity sets steep customer expectations. Judging purely from where things stand today, and if ratings/feedback on play store is any indication of customer satisfaction, they are far from realising their aim. It will be interesting to see if they can make this a success.
 
 Raghuram Bommaraju is an Assistant Professor of Marketing at the Indian School of Business (ISB) and Poonamjot Kaur Sidhu is a Research Associate at the Indian School of Business. Views expressed are personal.

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[This article has been reproduced with permission from ISBInsight, the research publication of the Indian School of Business, India]

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