The ambience. 30 years later, organized modern-retail has

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The first ever Shoppers Stop outlet
created history way back in 1991 in Mumbai by providing customers with
something that the country had never seen before- the first feel of organized
modern retail in a mall-like ambience. 30 years later, organized modern-retail has
now been disrupted by the introduction of ecommerce that provides customers the
convenience of filling their shopping baskets with as little effort as
possible, preferably while still in their pajamas along with deals and
discounts which are getting difficult to match up by the retail stores.

Modern trade has recently been challenged in terms of
profitability; and for Shoppers Stop the like-to-like growth declined 1.1% during
the last quarter ending March 2017, marking its worst performance in the last
eight quarters.

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Shoppers
Stop financial highlights

Source: Accord Fintech Pvt. Ltd

Even though the net sales have been increasing over the years
since 2014 but the y-o-y growth in sales has been declining from 20.31% in 2014
to 8.61% in 2017. Why hasn’t the oldest brick and mortar Indian modern retail
brand launched a singled full-fledged brand campaign in the last eight years is
a frequently asked question by marketing critics and has been labeled as a not
so good strategy. Consumers still love the touch and feel experience at the
retail stores but at a stage when sales are declining and the brand seems to
have been out of sight for a while, how exactly can it revive the romance that
it once stir up.

The retail industry in India

There has been a rise in income and demand for quality
products which has led to a boost in consumer expenditure. The total
consumption expenditure is expected to reach US$ 3600 billion by 2020, a 125% increase
over 2016. India is one of the fastest growing retail markets in the world due
to economic growth. The projected growth of Indian retail market is $ 1.1
trillion by 2020. The modern retail market in India has an expected growth of
US$ 111.25 billion by 2019. The industry also witnessed increased participation
from various private and foreign players to enhance retail infrastructure in
the country. 

The government has allowed 51% FDI in multi-brand retail and
100% FDI in single brand retail under the automatic route. The cumulative FDI
inflow in retail for 2017 is reported to be around US$ 1098 million. Demand for
western outfits and readymade garments has witnessed a 40-45% annual growth
rate and a subsequent large-scale entry of international players. Growth in the
upper middle class segment and advertisement has led to greater spending on
luxury products and high level of brand consciousness.

India’s online retail grew by 23% in 2017 with online retail
revenues projected to reach US$ 60billion by 2020. Penetration of the organized
retail in India stands low at 7% compared to that of other countries but is
growing at a CAGR of 20-25% with an estimated penetration share of 10% by 2020.
The growth in the Indian retail can be mostly attributed to favorable
demographics, change in consumer mindset, brand consciousness, rise in income
and purchasing power and easy consumer credit and increase in quality products.

Shoppers Stop: The story so far

Shoppers Stop was founded in 1991 in
India by the K. Raheja Corp. group of companies. It has grown from a single
brand store to a store for the whole family. Today it is known for providing a
complete shopping experience. It opened its first store in Mumbai and initially
sold only men’s wear but soon in 1992 introduced women’s wear too. Next year in
1993 Shoppers Stop introduced kid’s wear and non-apparel sections. First
citizen was a customer loyalty program which was launched in 1994. It was
incorporated as a body corporate in 1997 and took a major step of implementing
JDA retail ERP in 1999 which was the global leader in retail ERP packages. By
2001 they had opened 9 stores across India.

Year 2005 was very important for
Shoppers Stop. Its Initial Public Offering (IPO) was oversubscribed by 17.5
times and it acquired Crossword as a wholly owned subsidiary. The store count
went up to twenty, M.A.C and Homestop were launched followed by Mothercare and,
Brio and Desi café (F outlets) in the consequent year. It also bought 45%
stakes in Timezone, India. In 2007 it won the Gold Shield Award by ICAI in the “Manufacturing
and trading Enterprises” category for excellence in financial reporting and in
the same year acquired up to 19% stakes in Hypercity Retail Ltd. For airport
retailing it signed a joint venture with Nuance Group. It also singed an MOU
(Memorandum of Understanding) with the Home Retail Group and entered a
franchise arrangement for internet retailing. In 2008 it repositioned itself as
a bridge between its targeted customers and the luxury brands. It also unveiled
a new logo and tagline, “Start Something New”. It got the
award for the “Emerging market of the year” at World retail congress. By 2017
Shoppers stop had expanded to 80 stores in 38 cities including a lot of stores
in Tier 2 cities such as Bhopal, Durgapur, Meerut, Siliguri etc.

Segmenting,
Targeting and Positioning

Most of the customers at Shoppers Stop fall between the age
group of 16 and 45 years, the majority of them being families and young couples
with a monthly household income of INR 20000 and an annual spend of INR 15000.
The company has mostly adopted a market specialization strategy by concentrating
on serving the many needs of its target customer group and aims to gain a
strong reputation in serving the middle and upper class segments of the
country.

Shoppers Stop positions itself as a global premium retailer
outlet providing a complete shopping experience with an unparalleled assortment
of leading national and international brands in clothing for men, women, and
kids; accessories, fragrances, cosmetics, footwear, home furnishing and décor products.
In 2008 it had a makeover with the tagline ‘Start of something new’ connecting
to people who want to constantly experiment and upgrade styles.