Power, North Star step into affordable luxury

Bata India is revamping two of its oldest and best-known brands to tap a fast-growing segment of the youth market

This story has been modified. Please see the clarification at the end.

India's crowded brick-and-mortar retail landscape will soon see the addition of new storefronts bearing familiar labels: Power and North Star.

These stores, together with an expanded product catalogue, will be part of Bata India's broader strategy to revamp the two brands, among the company's oldest and best-known, as part of a repositioning strategy to tap a fast-growing segment of the youth market: Affordable luxury.

"The idea is to reposition Power and North Star to bring them back as compelling choices for today's youth in the sports category," says Rajeev Gopalakrishnan, Group Managing Director, Bata South Asia. The brands together account for 20% of overall business. "We know they can be market leaders for us," Gopalakrishnan adds.

Based on trend forecasts by Bata's buying and merchandising team, the objective is to broaden the customer experience and extend the catalogue by adding trendy and quality products targeted at middle-income consumers. "Affordability for us is offering the product at the right value, which is a combination of price and quality," says Gopalakrishnan. Many of the standalone stores, for example, will be in smaller towns, typically known as tier 1 and tier 2 towns with populations between 20,000 and less than 100,000, where Bata has less of a presence than in the bigger cities.

The new Power Collection will include a wide range of sportswear - from running, football, cricket and cross-training shoes to apparel such as T-shirts and tracksuits and accessories such as sippers. "The objective is to offer our customers a complete new look of vibrant colours, rich material constructions and a comfortable product," Gopalakrishnan says.

Affordability, he says, will be combined with the technology in the sports-shoe category and trendy designs. Sports shoes in the new Power Collection, for instance, will feature "Plazma Technology" (which offers traction, stability, cushioning and flexibility).

Like Power, North Star always had a youth connect but as a "jogger style" that worked well for the company.

The revamp, Gopalakrishnan explains, "will essentially include introducing new styles to meet the growing demands of the ever more aware, well-travelled consumer".

To this end, he says, "the key focus of the revamp for North Star is contemporary interpretations of existing styles, newer and more fashionable designs which are younger and more vibrant, in tune with the needs of the consumer".

Much of the strategy is shaped by a buying team that is young and fairly well-travelled, "and is in a great position to forecast trends". Gopalakrishnan reckons that the Indian footwear industry is in a strong position to deliver the kind of high-tech, high-fashion affordable brand positioning Bata is planning.

The market is growing at a respectable 15 per cent and India is the world's largest footwear producer after China. "The domestic footwear market is driven by growing fashion consciousness, together with increased disposable incomes among India's urban middle class, which contributes about 45 per cent of the overall footwear market," he says.

The company hopes to leverage the inherent advantages of the domestic footwear market: Low production costs, abundant availability of raw material, an ever-evolving retail ecosystem and a huge consumption market.

The question is whether the strategy can work, given that Bata is revamping two legacy brands - they were launched in the seventies (Power in 1971) - in a market that is crowded with new brands targeted at the emerging aspirational youth. Marketing strategists, however, suggest that Bata's legacy puts it in a strong position to take advantage of this market. Plus, there is a compulsion to do so.

Two broad trends have emerged in the youth market over the past decade, says Samit Sinha, founder and managing partner of Alchemist Brand Consulting. One big change is the orientation from long-term to short-term gratification. "Many young people will spend a month's salary on a mobile - and will do it again after a year!" he points out.

The other is that, thanks to the evolution of mobile communications, there has been a convergence between brand aspirations of small-town and big-city India. "The aspirational symbols of young people in Mumbai and Meerut are not very different. They understand the same brands," says Sinha.

The difference between the two lies in the ability to fulfil those aspirations. Simply competing on price can be risky, however, because these categories are extremely price-sensitive. "You can't be a poor man's Nike, for instance," he points out. Fulfilling a brand value, thus, is better than commoditising the brand.

This is the gap Power and North Star could fill with their positioning as affordable high-tech, high-fashion brands, adding, in the process, some youthfulness to their middle age.

CLARIFICATION 
An earlier version of this story misstated Rajeev Gopalakrishnan's designation. The error is regretted.