 "How Shoppers Stop is reinventing itself at 25")
When Shoppers Stop opened its first store, 25 years ago, it notched up an enviable amount of talk about town. Customers, mostly used to staring at products stocked behind glass shelves, found the experience of being able to touch and feel the merchandise at its stores quite novel. Over the years the brand has seen tremendous change, not just in what customers buy but also in how they shop and how they pay. And it is this knowledge that is coming in handy as the chain builds up a rack of private labels, stitches up exclusive alliances and uses its customer data to stock its stores and online channels.
It was not an easy start for one of the veterans in the game. B S Nagesh, the chain’s first managing director and current vice chairman says, “I had to establish quite a few things, like the concept, professional team, trust with suppliers and customers to (building) a self-service environ- ment. Most of the time it was not only about building a business but was establishing a new way of doing business.”
Govind Shrikhande, the chain’s managing director who has completed 16 years in the company admits that the journey has not been a one-way growth street. The chain has stumbled and then got back on its feet on a number of issues. It adopted, failed and then got its ERP right in early 2000s, he says. “We made losses in 2001 (the year he joined) and launched an IPO in 2005,” he elaborates. He also says that the store has many firsts to its name. From being the country’s first department store in 1990s to launching the first loyalty programme under the ‘First Citizen’ label in 1994, to instituting the first ‘no-questions asked’ return policy, the chain says it has started many new practices in Indian retail.
Shoppers Stop he says, has been keen to reinforce its uniqueness and has signed up on an exclusive basis with several brands. It has also built a set of private labels that will drive future growth. It sells 400 Indian and global brands and has exclusive brand partnerships with Virat Kohli’s Wrogn, Rocky Star, Femina Flaunt and others. Private labels under its banner include Stop, Life, Haute Curry and others.
But a senior retail executive says Shoppers Stop should have developed more private labels in the many years it has spent in the country. It could then have followed the franchisee route like the Tata group led Trent and boosted its profits further. “They could have done much more than what they have,” says the executive.
Shrikhande says it is a question of perception. “We could have done better but picture abhi baki hai( the movie is not over),” he says. He says that they would take the contribution of exclusive brands and private labels from 17 per cent of sales to 35 per cent in four years.
Shoppers Stop has taken a hit from the online marketplaces and its topline was impacted by the heavy discounting by e-tailers. The store has put together a strong omni channel strategy and over the next three years, it plans to extend this to group companies such as HomeStop, Hypercity and Crossword. By 2020, the company says it will achieve 15 per cent of its revenue through digital touch points.
The store has also recently launched a service called ‘personal shoppers’ where trained assistants help customer make online purchases and hand-hold them through the delivery process. “We want to get back the romance of shopping and get them (customers) out of the discount and sale mindset,” Shrikhande says.
He is also buoyed by the company’s loyalty programme that is among the oldest in the industry and has over 4.4 million customers driving 72 per cent of its sales. Shrikhande says the chain also has more than 8.8 million fans on Facebook and 13,79,000 Twitter followers. The chain earned Rs 190 crore through churning its data for better sales (data analytics) and expects to bring home about 25 to 30 per cent of annual sales in this manner in the coming years. Data analytics will drive future strategy, the chain says just as it is doing for its rival Future Retail and almost every online retailer today. The growing use of the data the chain believes will help develop deliver what customers want. Or at least keep pace with their ever-changing shopping habits.
It was not an easy start for one of the veterans in the game. B S Nagesh, the chain’s first managing director and current vice chairman says, “I had to establish quite a few things, like the concept, professional team, trust with suppliers and customers to (building) a self-service environ- ment. Most of the time it was not only about building a business but was establishing a new way of doing business.”
Govind Shrikhande, the chain’s managing director who has completed 16 years in the company admits that the journey has not been a one-way growth street. The chain has stumbled and then got back on its feet on a number of issues. It adopted, failed and then got its ERP right in early 2000s, he says. “We made losses in 2001 (the year he joined) and launched an IPO in 2005,” he elaborates. He also says that the store has many firsts to its name. From being the country’s first department store in 1990s to launching the first loyalty programme under the ‘First Citizen’ label in 1994, to instituting the first ‘no-questions asked’ return policy, the chain says it has started many new practices in Indian retail.
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Shrikhande says that the chain has grown exponentially in the last six years post the global slowdown even though the company has found itself in the red. The store count has gone up from 28 in 2009 to 81 in 2016. Net sales have grown at a (compound annual growth rate) CAGR of 21.85 per cent in the last 12 years since it went public. Its profits have dropped by 18 per cent, largely on account of another store in the fold, Hypercity, which is yet to become profitable. “We underperformed in Hypercity,” Shrikhande says.
Shoppers Stop he says, has been keen to reinforce its uniqueness and has signed up on an exclusive basis with several brands. It has also built a set of private labels that will drive future growth. It sells 400 Indian and global brands and has exclusive brand partnerships with Virat Kohli’s Wrogn, Rocky Star, Femina Flaunt and others. Private labels under its banner include Stop, Life, Haute Curry and others.
But a senior retail executive says Shoppers Stop should have developed more private labels in the many years it has spent in the country. It could then have followed the franchisee route like the Tata group led Trent and boosted its profits further. “They could have done much more than what they have,” says the executive.
Shrikhande says it is a question of perception. “We could have done better but picture abhi baki hai( the movie is not over),” he says. He says that they would take the contribution of exclusive brands and private labels from 17 per cent of sales to 35 per cent in four years.
Shoppers Stop has taken a hit from the online marketplaces and its topline was impacted by the heavy discounting by e-tailers. The store has put together a strong omni channel strategy and over the next three years, it plans to extend this to group companies such as HomeStop, Hypercity and Crossword. By 2020, the company says it will achieve 15 per cent of its revenue through digital touch points.
The store has also recently launched a service called ‘personal shoppers’ where trained assistants help customer make online purchases and hand-hold them through the delivery process. “We want to get back the romance of shopping and get them (customers) out of the discount and sale mindset,” Shrikhande says.
He is also buoyed by the company’s loyalty programme that is among the oldest in the industry and has over 4.4 million customers driving 72 per cent of its sales. Shrikhande says the chain also has more than 8.8 million fans on Facebook and 13,79,000 Twitter followers. The chain earned Rs 190 crore through churning its data for better sales (data analytics) and expects to bring home about 25 to 30 per cent of annual sales in this manner in the coming years. Data analytics will drive future strategy, the chain says just as it is doing for its rival Future Retail and almost every online retailer today. The growing use of the data the chain believes will help develop deliver what customers want. Or at least keep pace with their ever-changing shopping habits.