Brands get their market entry/re-entry strategy wrong all the time. But as Reliance Retail (RR) prepares to open its fourth exclusive GAP store in Kolkata this weekend, analysts are pretty certain the new retail partner will give the US fashion brand a headstart. First, RR has tremendous retail expanse, reaching over 15,000 stores across 7,000+ cities at the moment. Plus local sourcing will help it keep costs low. Above all, RR knows exactly how to implement a killer pricing strategy.
For its part, RR has identified four pillars on which GAP’s re-entry will rest — competitive pricing, better store presentation, rapid offline expansion, and the launch of its own d2c website. “The brand has undergone some key changes,” points out Akhilesh Prasad, president and CEO, fashion and lifestyle, RR. “It is colourful, more suited to Indian tastes than it used to be; it will have an enlarged women’s section too. All these factors will go a long way in making GAP successful.”
Needless to say, RR is staring at a huge opportunity. India’s organised apparel retail market is inching towards the $100-billion mark on the back of increased consumer spending. As per Statista, the revenues in the Indian apparel market will touch $96.47 billion in 2023 and the market is expected to grow annually by 3.34% (CAGR 2023-27). While international fashion brands account for a minuscule 2%-4% of the total sales, experts foresee fast growth in the mid-premium and branded fashion segment with income levels rising and fashion being an impulse buy.
That said, GAP has its work cut out. Says Harminder Sahni, founder & MD, Wazir Advisors, “RR must deploy big resources in building the brand — it would be a fallacy to assume every Indian knows GAP. Yes, Shah Rukh Khan wore GAP in Kuch Kuch Hota Hai but that was 25 years ago.”
One step at a time
GAP is currently available in over 50 shop-in-shops (including Centro and Kapsons) and three exclusive stores (Mumbai, Hyderabad, Gauhati). Prasad says, “Earlier we were looking only at metros and mini metros. But in India, the top hundred cities are all relevant for GAP.”
RR opened the brand’s first exclusive store at Infiniti Mall, Mumbai, last month. With more than 6,000 sq ft area, the store serves as the fullest expression of the brand featuring denim, logo products, khakis and modern essentials for the family. “In
the first leg of expansion, we will tap the top 10 cities; in the next stage we hope to reach the top 25 and then the top hundred cities,” says Prasad.
Being at the right place at the right time is crucial. “Go beyond exclusive brand outlets (EBOs) and get more into department stores and multibrand outlets (MBOs) to woo the youth. The mistake will be to just open EBOs with basic clothes at high prices (as per Indian standards) and not advertising enough,” says Sahni.
RR will not compromise on the “experience” bit. Along with a tech-enabled shopping experience including smart trial rooms, express check-out, and an omni experience, the brand is aiming for a fully automated experience in its exclusive stores, with plans of opening 50 more over the next three months.
Digital is a big part of the plan. “We have established a GAP shop-in-shop on Ajio, which is our leading online brand. We will open a separate d2c website as the market grows and we have enough volumes,” said Prasad.
“The big plus Reliance Retail brings to the table is penetration into small-town India, where aspiring shoppers will be keen to touch, feel and try the product — something they cannot do online. However, small-town India is also value-conscious and price sensitive, hence the pricing strategy will play an important role,” said Nisha Sampath, managing partner, Bright Angles Consulting.
RR understands that dilemma for upcountry consumers. So GAP hasn’t revised its prices upwards in the last three years. In some cases, prices might be marginally lower than the 2019 levels, Prasad informs.
Pricing is one thing, building the right identity is quite another. “GAP is an everyday affordable clothing brand and should not try to be fast fashion for India, so merchandise accordingly and price right,” advises Sahni of Wazir Advisors.
Going forward, GAP is expected to contribute a lion’s share in RR sales in the mid-premium segment. “Its scope will be much larger compared to the premium or luxury brands with us,” says Prasad.