Second, we made some significant investments in new pilot projects, some of which — including the Fabindia Experience Center — have already been received well.
From associating with IPL to introducing customer engagement zones in its large-format stores, Fabindia is trying to leave behind its low-key imagery, as competition intensifies in the retail sector. Karan Kumar speaks to Venkata Susmita Biswas about Fabindia’s focus on customer engagement, competition from e-tailers, and the company’s frugal
How is Fabindia dealing with the competition from online ethnic wear stores?
Whether it is others replicating Fabindia designs, presenting more options in Indian wear or sourcing products from India’s craftsmen and selling them online, we embrace it as an opportunity to tell our story on a much wider platform. That said, the competition is not our reference point; customer centricity is.
We are also adding services like alteration studio, interior design studio and wellness centres to make the physical space more experiential. We have 10 experience centres across the country; we are hoping to add at least 30 stores in this financial year.
So, with such experience centres, aren’t you giving up precious in-store space at prominent locations?
It is a fallacy that packing a store to the hilt will automatically translate into higher sales. For sales to happen, customers must be able to experience an environment that is conducive to product discovery. With such centres, customers can now discover a whole range of products on offer. That discovery has led to an increase in conversion.
Fabindia has not been a big spender on marketing. Has that been an impediment to your growth?
We are conservative spenders. We have never gone over the top with media spends, and we will not do so in the future, either. Our marketing efforts are focussed on branding and driving product socialisation. The other part of our marketing mix is all about branded content and tapping into influencer marketing. In 2017, we tied up with the play Salaam Noni Appa which toured seven cities with 12 shows across 15 days; the entire cast wore Fabindia attire, and the set design and props were also by Fabindia.
I do not believe there is a correlation between Fabindia’s growth numbers and conservative strategy. The kind of initiatives that we have rolled out over the last two years needed a certain amount of planning and investment.
Fabindia partnered with Star India for IPL recently. Seems like a rather unconventional choice for a brand like yours, in terms of scale and target audience…
Not at all. In the case of IPL, we are not looking at huge media spends in terms of TV sponsorships or advertising. The opportunity here is to showcase western wear casuals for men to the widest audience available. This particular category is not very well known. The tie-up is a good fit for us because viewers of IPL (a projected 800 million, as per Star India) across national and regional feeds will see anchors wearing Fabindia clothes. The exposure is tremendous.
Fabindia only recently launched a loyalty programme. What took you so long?
Many companies have experimented with loyalty programmes and most are purely transactional in nature. We have been working on creating one that is genuinely generous, authentic and personalised, for over a year. In addition to earning points and redeeming them, we will offer members cultural immersion trips, and experiences at unique cafés and restaurants. Creating this from scratch took a lot of time.
Fabindia reportedly saw a massive decline of around 42% in its profits in FY 2018. What went wrong?
This needs to be contextualised. Lower profit in FY 2017-18 was due to impairment loss of `57 crore; excluding this one-off item, the profit would have actually grown by around 13%, crossing `115 crore. That said, I would also want to highlight some of the other factors that were unique to that fiscal: first, the twin effects of demonetisation and GST were both heightened and extended on the craft and small-scale sectors which are very critical to our overall product sourcing strategy. Second, we made some significant investments in new pilot projects, some of which — including the Fabindia Experience Center — have already been received well.