Some Nifty Retail Strategies, Putting in Place a Superior Customer Relationship Programme and Introducing World Class Retail Technology and Practices, all have helped The Department Store Chain to be on top of The Retail Game.
However, when it comes to retail penetration, Shoppers Stop has been following a selective strategy. Until 2001, the company had just seven stores, whereas Westside from Tatas, which also followed a selective retail strategy within the first 10 years of its operation, had 14 stores. But Shrikhande points to a more aggressive retail penetration strategy in recent years. “In the last 10 years, we opened another 31 stores. In the next three years we plan to open another 31 stores. This is phenomenal growth vis-à-vis what we have achieved over the last 20 years. Maintaining our focus on delivering happiness to customers while growing at a fast pace will be the key challenge,” he avers. The chain’s cautious approach to expansion has had an up-side and paid off well during the bad times. When retailers such as Pantaloon and Woodland have had to close down 10 stores during the slowdown to combat rising rental cost, Shoppers Stop didn’t have to shutter any of its stores.
Today, even as it is pulling out all stops to position itself as a global retailer by bringing the world’s best retail technology and practices to its customers, the chain is looking to add more stores and has lined up investments worth Rs 450 crore over the next four years. The company has eight Hypercity stores and 36 Shoppers Stop stores across the country at present. But right now the biggest challenge for the group is to foray into tier I cities where Pantaloon, Lifestyle and other players have already entered much earlier. Pantaloon, with its comparatively easy-on-the-pocket portfolio of private labels mints 50% of its turnover from tier I and tier II cities. But unlike Pantaloon and Westside, both of whom have been thriving on private labels, Shoppers Stop has been banking on its power brands to grow, which are expensive than the private labels. The group has more than 400 international brand in its portfolio and that’s what makes Shrikhande confident about taking on the competition. However, its bridge-to-luxury positioning might not work in tier I cities. So positioning Shoppers Stop in tier I cities remains a challenge. Concurs Shrikhande: “Understanding different kinds of customers in smaller cities is a big challenge. Ramping up the supply chain, developing quality teams in the smallest of stores, maintaining the values of the company, developing multi channel capabilities, delivering shareholder returns, etc. would be the other challenges.” And with Westside planning to open 30 stores by this fiscal year in tier II cities and Pantaloon, too, sounding the battle cry, the competition in the retail space will only get tougher in the coming years. That will prove to be the real test for Shoppers Stop.
Today, even as it is pulling out all stops to position itself as a global retailer by bringing the world’s best retail technology and practices to its customers, the chain is looking to add more stores and has lined up investments worth Rs 450 crore over the next four years. The company has eight Hypercity stores and 36 Shoppers Stop stores across the country at present. But right now the biggest challenge for the group is to foray into tier I cities where Pantaloon, Lifestyle and other players have already entered much earlier. Pantaloon, with its comparatively easy-on-the-pocket portfolio of private labels mints 50% of its turnover from tier I and tier II cities. But unlike Pantaloon and Westside, both of whom have been thriving on private labels, Shoppers Stop has been banking on its power brands to grow, which are expensive than the private labels. The group has more than 400 international brand in its portfolio and that’s what makes Shrikhande confident about taking on the competition. However, its bridge-to-luxury positioning might not work in tier I cities. So positioning Shoppers Stop in tier I cities remains a challenge. Concurs Shrikhande: “Understanding different kinds of customers in smaller cities is a big challenge. Ramping up the supply chain, developing quality teams in the smallest of stores, maintaining the values of the company, developing multi channel capabilities, delivering shareholder returns, etc. would be the other challenges.” And with Westside planning to open 30 stores by this fiscal year in tier II cities and Pantaloon, too, sounding the battle cry, the competition in the retail space will only get tougher in the coming years. That will prove to be the real test for Shoppers Stop.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
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Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
