Consumer durables cos bet big on large retail stores

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Consumer durables manufacturers are betting big on large format retail stores. Why not? After all, these stores are now contributing in a significant way to their overall business, thanks to the perfect ambience and huge display area being offered by stores like Croma, Reliance Digital, e-zone, Jumbo Electronics and Next, to name a few.

“Large format retail stores give manufacturers a huge space to display their entire range of products. At the same time, due to availability of various brands in the same store, the customers get an opportunity to evaluate products well and make an informed decision before he splurges on high-end products, said Sukhpreet Singh, general manager (brand marketing), Whirlpool Electronics.

“Started in the second half of 2006, these stores will eventually give us better sales especially in the high-end product category and this is expected to rise rapidly over the next few years,” says Singh. He added that currently, over 5% of Whirlpool’s total sales come from these large format stores.

Added R Zutshi, deputy managing director, Samsung India Electronics, “These stores are fast penetrating across the length and breadth of the country and the shopping environment that they offer has led to increase in sales with people in the mid to high-income group constituting a huge chunk of the total volumes.” Samsung Electronics, which currently has a contribution of around 6% to its overall business from these stores, expects a growth of 80% in total business this year from large format retail stores.

With the concept of buying electronics from large format store viv-a-vis traditional stores gradually gaining momentum, companies are selling products at attractive prices and special offers to lure customers who walk into these stores.

According to an industry expert, with the mall culture growing at a fast pace, there would be a phenomenal growth in the number of these stores and this would in turn lead to spurt in sales. “The concept of mall shopping is fast catching up among buyers and with the availability of all major players under one roof, time is not far when the share of such stores to the total business will reach a double digit figure,” he said.