Opened with an endeavour to raise the bar of experiences when it comes to ‘brand + bargain shopping’, Future Group’s chain of retail stores Brand Factory is eyeing long-term growth by playing on the Indian need for aspirational brands. Leaving pure-play price wars behind, the company stands on the belief that one needs to adapt to consumer choice and behaviour to foresee growth, as Indians do still love their discounts. Brand Factory’s Roch Dsouza, in conversation with BrandWagon’s Meghna Sharma, talks about how the company plans to stand out beyond the festive season. Edited excerpts:
For a company like yours, which depends heavily on discounts and price slashes, what new can we expect this year as the festive season commences in India?
Brand Factory is known for discounts and offers, but what we have focussed on in the last year or so is the kind of retail brands we have roped in. For instance, recently we got Ed Hardy and Charles & Keith on board, which are available in some of our stores. The brand play is going to be the bigger distinguisher for us this year, in addition to the price war. Also, another thing I would like to get to everyone’s notice is that both our in-house brands as well as other brands have created a lot of exclusive fashion merchandise ranges for us this festive season. The two important pillars for us are the range and brands we have in
Would you say that there is a herd mentality during the festive season? How can one stand out?
The way we look at it is that Indians are smart. It is ingrained in our DNA that we love discounts and sales. So, we don’t see that being any different during the festive season. We have built this brand purely on trust. We have been big on advertising but what has helped us grow is the fact that our offers are very genuine. So if we have a promo, customers will have enough choice to shop from and she will not feel cheated that the discount is on limited merchandise or is not what has been communicated. Hence, it is what we intend to bank on in the future also. A lot of of our sales happen through word-of-mouth after the first ad and after people experience it — that’s the biggest differentiator for us from others who are in the discounts war but are not true to it.
This festive season, what has been your advertising strategy? What has been the y-o-y increase in your advertising spends?
Our marketing budgets have gone up year-on-year; but that’s purely because of the number of stores we have opened in various cities. In the past one year, we launched 20 stores. It is a pure play of numbers and hence, the increase in advertising budget. Our ad budget is
2-2.5% of the overall sales.
How heavily does the brand depend on content marketing and how do you decide on spends? What is the RoI here?
I think we are the only offline fashion retail brand which is a lot into content, in a way that our positioning is around ‘smartness’. We do not talk about our offers but also do things which are centred around smartness. We just launched a store in Bengaluru and here, one can see a lot of things which will make a consumer feel smarter. For example, the store has a weighing sale which lets one see how smartly they have shopped or our saving counter which tells the consumer how much they have saved after shopping at Brand Factory.
We build a lot of content pieces around festivals which do not just harp on offers. We try to build in the DNA of smartness in our content which is core to the brand. We have a lot of work on social media which is around this thought as we take the digital platform seriously.
There has indeed been a shift in what we were doing earlier and what we do now on digital. Whenever we do campaigns which are promo-led, the RoI has been phenomenal and that’s all because of likes and shares by consumers. Our online campaigns have been performing very well for us.
Over the years, what changes have you seen in consumer behaviour, bearing in mind the e-commerce war and intense offers?
Like I have said before, Indians are inclined towards discounts so there has been no behavioural change per se. But it is all about how brands are adapting to this behaviour.
I can speak for us; our growth in the last three years is a true testimony of how adapting to customer behaviour can help a brand. We have seen a 70-80% growth over this period. One needs to understand and study how the consumer is adapting to various formats.
Which markets are contributing maximum footfalls for Brand Factory? Where is the next phase of growth coming in from?
In terms of the number of footfalls, our mature cities have been showing a very good trend in terms of new customers and in the newer cities, there is a large number of millennials joining in. This is a positive trend for us and that is why we are concentrating on expanding our presence now more than before. We are opening close to 40 stores in various cities every year.
Thanks to big data, one can study purchase behaviour, search history and can place ads tactically. How has the brand made use of big data? How does it help during sale time?
Big data has been used for different purposes — from refining consumer experience to loyalty programmes — because we have our loyal customers shopping with us five-six times a year. We have, in our database, over two million consumers. Big data also helps us to see merchandising trends apart from the feedback we get from consumers.
Today brands need to be omnipresent. What is your take on it? Are there any plans to sell via e-commerce?
As of now, no. But down the line, we might. We are planning to open 300 stores in the next three years and that is the true test for us. I do not know if online will be a part of this journey or not, but we are looking at expansion from a bricks-and-mortar store model.
What are the retail trends that you foresee in India?
I feel that people are getting more fashion-conscious which is no more about the product, but is more about the fashion trends. Today, consumers want to wear something different every few months and hence, frequency of purchase is going up. Earlier, it was occasion-led; currently it is fashion-led.