Canon is augmenting its retail initiative through the launch of the brand’s first stand-alone store, Canon Image Square, in Noida, a suburb of New Delhi. The focus at the exclusive store will be the brand’s consumer digital imaging range, where one can choose from 80 stock-keeping units, including D-SLRs and lenses, camcorders, photo, ink-jet and laser printers and digital accessories.
The store will be a springboard for the brand’s ambitious plans to establish a footprint of 300 exclusive outlets in the country in the next three years. “The first 100 stores will be spread across six metros, whereas 200 stores will be located in Tier-II and Tier-III cities,” says Canon India Senior Vice-president Alok Bharadwaj. “Tier-II and Tier-III cities remain a thrust area for the company as economic activity in the smaller cities is increasing. Entrepreneurship in these cities is increasing and technology products will be a key adoption in these markets.”
Each store will cover an area of 800 to 1,300 square feet. This is not the company’s first tryst with exclusive stores. In 2007, the company had launched ‘Xperience Zones’ and ‘Image Lounges’ in cities like Gurgaon, Mumbai, Bangalore and Pune. These were a non-selling environment where consumers could get a feel of Canon products. According to Bharadwaj, these retail set-ups provided the brand key consumer insights: Consumers were curious to learn about different technologies, cross-category interest was present and consumers often purchased a different product from what they initially planned to buy. Also, buying technology is often a family affair and the spouse plays a prime role in influencing the purchase decision. One thing was clear — traffic in these retail zones was increasing and the consumers were looking for a one-stop shop to purchase the products. Thus came into being the Canon Image Square.
Booz & Company Vice-president Abhishek Malhotra sees this as brand building, rather than a mere sales opportunity. The exclusive retail store will complement presence in a multi-branded format. “For example, a consumer might visit the exclusive store to learn about a Canon product and pick up the product at a smaller retailer who is offering better prices,” says he. KPMG Analyst (consumer markets) Anand Ramanathan sees Canon’s foray into retail as a logical extension. “In the past, competitors in this space like Sony entered exclusive retail through Sony World and have seen it as a viable proposition.”
The company will rely on the franchise route for expansion. “This makes sense as it is a low-risk model, given that there is no investment in real estate and overhead costs,” says Ramanathan. Bharadwaj says Canon has done its homework. “The entire showroom is made by our design outfit. The franchisee provides us the shell and we give him the finished retail environment. This ensures all stores look consistent.” Canon is also investing in training staff in each of these outlets and will provide a trained consultant to each store, who will be the link between the franchisee and the company. Lastly, all stores will have an IT system which will track product sales in real time.
Canon is looking to invest Rs50 lakh on each store which includes the cost of furnishing the store as well as a subsided rate on the demo product range. Bharadwaj is confident that each franchised store will break even in less than a year.