Celebrating its 25th anniversary in India, homegrown department chain Shoppers Stop is betting on achieving 15% of its revenue through digital by 2020. To this aim, it is launching a new ad campaign to build on its digital presence. The company wants to focus on its uniqueness as it adds more private labels as well as international brands to its kitty as per its expansion plans. The chain’s MD of 16 years, Govind Shrikhande in conversation with BrandWagon’s Meghna Sharma, talks about the changing landscape of retail in the country and what one needs to do to understand the ever-changing customer. Excerpts:
In the last 25 years, how has Shoppers Stop witnessed the changing retail landscape in India?
When I look back at 1991, there was no concept of a department store in India. Every city had a mini-
department store concept like Mumbai had Akbarallys and Century Bazaar, and they usually focussed on apparel with a typical store size ranging from 1,500 sq.ft. to 4,000 sq.ft. We were the first ones to start a 4,000 sq.ft. men apparel store in Andheri (Mumbai) and expand it to a 50,000 sq.ft. store. Customers were scared of entering an air-conditioned store as they equated it to high prices. So, to get the concept — whether air-conditioned or not they will get the same prices was a challenge. Apart from this, we were also the first ones to start free tailoring, a no questioned asked exchange policy — all this helped us gain customer trust.
The year 1991 belonged to mom-and-pop stores, ‘92-93 saw exclusive stores coming up, then franchisee stores and then department stores. The early 2000s saw hypermarkets, followed by international brands and QSRs. Now you can see specialty stores like Croma and the best of fast-fashion brands in India. And with a fast-paced growth of e-commerce, Indian retail is getting very competitive.
With the entry of international retail brands, how do you see Indian companies stepping up their game?
We are working on utilising India’s fashion talent, fabric talent and manufacturing talent and channelise that in the store. We had a concept called DOTY (Designer of the Year), which has given the country two-three top designers; one of them was Priyadarshani Rao. We are planning to re-launch the concept in Q3-Q4, and will be giving the designers a platform to sell their range. This will bring in a lot of fresh fashion in the stores every season across categories.
A tug-of-war between offline and online is nothing new. But now with the Myntra-Shoppers Stop deal and brand partnerships with Amazon and Snapdeal, how do you see the retail business changing in the next couple of years?
Customers see online-offline channels very seamlessly. That’s why our omni-channel strategy is based on them. We want to leverage our physical stores. For example, you go to our Bandra store and MAC is not available there. I provide you tablets there so that you can choose what you want and get it delivered to the Bandra store or to your home. So, click and collect, click and deliver, is what we will achieve by June 2017.
In a country where realty prices are high, what works better — high street or a mall?
Today most of our stores are mall stores because high-street stores are very difficult to get these days, especially in big metros. And with the rentals they come with, they are clearly unaffordable. Therefore, going ahead, we see expansion happening in malls as well as tier-II cities. There are opportunities at reasonable prices in tier-II.
How does Shoppers Stop make use of big data?
Big data is getting created in tonnes. We are sitting on large amounts of big data from two streams — our loyalty programme with more than 4.5 million customers and our Facebook customer base which is over eight million. If we can utilise these two big data sets well to know about consumer likes and dislikes, their transactions, their psychographics — we will be able to serve the customers better.
With numerous sales offered by both online and offline players, does the exclusivity of the festive season (Diwali onwards) still hold the same significance in people’s lives?
It’s our job to get the romance back into retail. Customers are always on a continuous self-realisation journey and if you do not offer them something that is exciting, then they will get slotted into the discounting mindset. You need to offer them something different. That’s what we are doing by getting personal shoppers or launching exclusive products.
What are the biggest challenges of the retail space today?
One of the two big challenges is digital disruption happening in the category. Whether it is demonetisation, e-commerce or augmented reality — how do we get used to these fast-paced changes? The challenge of FDI has been troubling the category too. This does hamper the investments coming into the sector as well as investments made by individuals to enhance the category.
What is hampering India’s score on the global retail development index?
India’s position used to be one of the most attractive till a few years ago. We have seen it fall in its overall ranking due to high property charges, productivity not being good, margins being high, etc. If GST comes in and government re-looks into taxation and something is done about property prices, maybe our ranking will rise again.