Domestic retail major Shoppers Stop has had to adapt itself to the expanding internet access, growing smartphone usage and rising digital consumption.
Domestic retail major Shoppers Stop has had to adapt itself to the expanding internet access, growing smartphone usage and rising digital consumption. Through various innovations, the company is in the cusp of reigning in an omni-channel presence that will put the edge of shopping on experience rather than convenience. The company’s managing director, Govind Shrikhande, told FE’s Priyanka Ghosh on its game plan to take on the massive challenge that online retail now presents in the retail industry. Excerpts:
There was serious concern that the disruptive pricing strategy adopted by online retail companies will seriously dent growth for large brick and mortar players like Shoppers Stop. If we dial back to January 2015, your numbers did take a massive beating. Can you elaborate on a few things you have since done differently?
We don’t look at the online medium as a threat to us, but as an opportunity to provide a new dimension to our brand and a new way to connect with our customers. In fact, amongst the top global retailers, 9 out of 10 are brick & mortar players which have evolved into omni-channel entities. In India, Shoppers Stop was one of the first department stores to launch a multi-channel play through our e-store. In the last year, we have embarked on our omni-channel journey that aims to link our multiple channels in order to give customers a unified and seamless brand experience. We partnered with Hybris, a SAP company and the world’s fastest growing e-commerce platform provider, to boost our omni-channel play. In October 2015, we launched our refreshed website with marked improvements in usability and navigability. Our new mobile app will be launched shortly completing our first phase of investment in Omni Channel.
The one thing that online retail has certainly brought about is aggressive marketing. How essential do you think is the role of advertising now that you have to compete with them?
In a single (December) quarter of FY15, online retailers collectively spent over R300 crore on advertising. While we can’t match that kind of indiscriminate spending, yes definitely our advertising spends have seen a like-to-like increase. But more importantly, we are looking at new media, advertising innovations and unique content creation, while continuing to advertise in print, radio and outdoor mediums. Other than that, we have our 4 million strong loyalty programme – The First Citizen. Through this programme – which contributes to over 70% of sales – we are able to track, record, analyse customer data and hence craft targeted personalised communication. We find this to be a very effective marketing tool. In FY 16 we were able to achieve a R115 crore incremental topline sales thanks to our targeted initiatives using data analytics.
There is very strong competition now from international brands so far as apparel is concerned. And the list will only get stronger as we go ahead. So what specific measures are you taking in order to tackle this competition in variety, quality, fit?
As mentioned earlier, we continue to forge exclusive partnerships with international brands, Indian designers and celebrities. Aside from Spanish brand Desigual, Viraat Kohli’s breakaway youth fashion brand Wrogn, Designer Rocky Star’s RS by Rocky Star… in the coming quarters we are all set to launch Sonam & Rhea Kapoor’s high-street fashion brand Rheson. We continue to invest in our strong private label portfolio – Stop, Life, Haute Curry, Kashish, Elliza Donatein and Vettorio Fratini.
You announced a tie-up with Snapdeal last year. Any colour on how much traction you have seen on the site for your products? And will you be open in the future to having similar tie-ups with other marketplaces to expand your market reach?
The Snapdeal tie up was kicked off around December. We will start a Big Push around March 17, as we are still working on a few logistical issues.
You have earlier announced your focus on private labels. Some say that private labels are the future leaders of retail. However, as a retailer, could you enumerate whether the effort is to grow the brand value of private labels or simply grow more private labels?
As a house of bridge to luxury brands, we are clear that our private label portfolio will remain in the 18-22% range of the total merchandise mix. So yes, our focus is to reinforce the value proposition of each of our private brands.