Questions are rife about the potential of catalogue retailing in India, after Shoppers Stop Ltd?s exit from its catalogue retailing venture with UK?s Home Retail group. Business under the Hypercity-Argos brand that it had set up did not meet planned performance levels and was not profitable.
Catalogue retailing calls for prompt availability of products at stores and excellent service. The business, though at a nascent stage in India, is worth $180 billion in the US and 50 billion euros in Europe. The format is growing at around 40% globally.
Analysts opine that Shoppers Stop?s experience in catalogue retailing will provide other leading retailers, who have similar plans, with a template of avoidable mistakes and important lessons.
Mahesh Shah, chief executive officer, Home Town, from The Future Group, for instance, points out the importance of product availability.
?Catalogue retailing will work only if customers are assured of product availability across stores. When customers call to place product orders, products need to be delivered at their doorsteps on time,? he said.
Smriti Dalvi, director, Florista India Private Ltd, also airs similar views. ?Product availability will ensure customer trust. Also, stores will be able to retain existing customers and acquire new ones,? Dalvi said.
?Besides, it is also imperative for catalogue retailers to invest in back-end operations,? said Shah. He, however, noted that Home Town has no plans to launch catalogue retailing as yet.
The Bombay Store, which is planning to venture into catalogue retailing within the next two years, is aware of inherent challenges. Asim Dalal, managing director, The Bombay Store, said, ?In India, people still prefer face-to-face interactions at retail stores where they can have a feel of the product; people also pose many queries before buying products.?
However, said Dalal, today?s customers are also comfortable with television and online shopping.
He said that catalogue retailers will have to overcome customer distrust about on-time product delivery and misinformation about product availability across stores.
Meanwhile, BS Nagesh, vice chairman, Hypercity Retail (India) Ltd, said that while sales through Hypercity-Argos were minimal, rents were steep.
Hypercity Retail (India) Ltd, owned and managed by Shoppers? Stop Ltd, intends to remain committed to service all warranties and guaranties as applicable for products purchased from Hypercity Argos stores, call centre and website.
?Products which were displayed through Hypercity Argos formats have been completely sold out through Hypercity hypermarkets in the InOrbit Malls in Malad and Vashi in Mumbai,? said Nagesh.
Germany-based Otto is counted as the most successful venture built around catalogue retailing.