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Croma gets more social with brand, focuses on driving consumers to stores

 For Croma, the objective has been to use online channels to lure the customer offline where there is a greater chance of cross-selling products or nudging consumers into a premium buy

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Nearly 50 per cent of the clientele on any given day are repeat customers with the numbers going up to 70 per cent in certain stores
T E Narasimhan Chennai
Last Updated : Dec 17 2018 | 10:23 PM IST
For the first time in the 12 years since it opened its first store, Croma that is owned by the Tata group’s Infiniti Retail turned in a net profit. The company posted Rs 166 billion as net profit in 2018 against a net loss of Rs 570 million the previous year. While the retailer still has significant accumulated losses, this could well be an inflection point for the company that believes that the tide is finally turning. 

Croma says it saw 20 per cent same store growth in sales in October 2018 over the same period in the previous year. While there are big challenges, given that the number of brands in retail are far greater today than it was when Croma first started out and e-commerce has changed all the rules of the game, the company believes it has hit upon a winning formula. Smart and aggressive management of the brand online while the focus stays firmly on driving customers to the offline stores is the way forward, says the company.

There has been a sharp rise in the brand’s engagement on social media in recent months. It has also fine-tuned its approach to ensure that the brand helps consumers move along the path to purchase via their social engagement. “Croma has been missing in the conversation in this digital space. In the last 1-2 years, Croma has started bridging the (digital) gap by being more active through conversations in social media as nearly 80-90 per cent of the customers start with digital (browsing) and end up buying from physical stores,” says Ritesh Ghosal, chief of Marketing and Insights, Infiniti Retail. 

The digital-physical track is a thin and tricky one to navigate. Online helps brands expand their reach but at the same time, forces them to play the discount game. For Croma therefore, the objective has been to use online channels to lure the customer offline where there is a greater chance of cross-selling products or nudging consumers into a premium buy.  

Online accounts for less than three per cent of Croma’s total sales at present. The company likens online forays to window shopping where consumers measure the choices on offer and look for reviews to make a more informed purchase. It is what the tagline says, explains Ghosal, “We help you buy.” 
 
Harish Bijoor, founder-CEO of Bijoor Consults, says that Croma must not turn into an online retailer. “You must remain who you are and stay focused with the core competencies, which is physical retail. If it is a catalogue online, that is fine. But becoming an e-commerce player is not its competency,” he says. 

Croma says it has therefore kept its eyes firmly offline even as it has targeted millennial consumers on social media. Ghosal believes that the brand has a headstart when it comes to pitching itself to the youth-millennial group. Being a millennial Croma is able to create the right ambience, he says.  

The role of offline stores is underestimated in the country where, Ghosal believes, trust plays a big role in big-ticket purchases. On a given day around 50 per cent of business at Croma is from repeat customers, while in matured stores it goes up to almost 70 per cent. “This is fantastic news,” he says and adds that for Croma, trust operates on a dual level. One is trust in the brand that consumers want to purchase and the second, trust in the retail store that stocks these brands. 

Croma is also keen to stay away from discount trap that online retailers have found themselves in. Ghosal says that in stores, the first transaction is usually an expensive buy, but online one has to lure the customer with discounts. Customer acquisition is more expensive and the chances of getting repeat customers is more at physical stores, Ghosal explains. 

“In most categories our ticket sizes are roughly twice that of the market average. Smart phone ticket size is around Rs 17,000-18,000 while the market ticket size for the same is around Rs 10,000,” he said. The company is looking at opening new stores in newer catchment areas to acquire new customers. This year Croma has already opened 12 stores and another eight will open for business by March 2019. It is present in all metros except Kolkata, where it plans to open soon. 

Bijoor says that one of the big pluses is the Tata tag. “Also, they have created hubs in high streets where they compete with local retailers and they have been able to establish a very corporate feel (standardised) to retail, which is good since most retail outlets have an owner (in terms of sales people, stocking and display) feel,” he adds

Over the past few years, Croma has worked towards resolving what used to be a sore spot with consumers: after-sales service. The company acts as a via media and takes up complaints, on behalf of consumers, with the brands. This has helped build trust in the retailer and earned them customer loyalty. 
 
Ghosal says that they have offered the after-sales service for the last three years but it is only recently (since Diwali 2018) that they have come out with an assured lifetime service. As the competition gets tougher, online and offline, Croma hopes that services such as these will keep consumers coming back for more.

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