Over the last few years, Bata India, leading footwear retailer and manufacturer, has repositioned its stores by opening large format stores, renovating its stores and closing down small ones. Early this year, Bata India announced that they will have only standardised large-format stores in its network within the next four to five years. Air conditioner maker, Blue Star, also plans to open exclusive large format stores to hawk products across all segments and is targeting `1,000 crore revenues from its residential segment by 2014, following the success of its exclusive small outlets. Metro AG, Germany’s largest retailer, also announced in February this year that it will invest an additional `560 crore this year to set up eight wholesale stores in India. At Titan Industries, Tanishq, early this year, saw the launch of the 11,000 sq ft large format store, which is the biggest in Kolkata. At Tanishq, the introduction of large format retail stores is city and location led and they open about two to three such stores every year. For Reliance Retail, the frequency at which large format store is opened is once per quarter.
Why the need?
The reasons can be many. Large format retail stores give the opportunity and the environment to the customers to put in more products in their shopping basket. Consumer durables is also one industry for which these stores are now contributing in a significant way to their overall business, thanks to the perfect ambience and huge display area being offered by stores like Croma, Reliance Digital, Jumbo Electronics and Next, to name a few.
For customers, visiting a large format store associates with an aspiration for better shopping experience spending much more time, hence it is generally a pre-decided destination, wherein it solves the purpose of storing or offering products which otherwise would be available across three to four stores. Also, it helps in planned purchases. Sandeep Kulhalli, Vice President-Retail & Marketing, Tanishq, avers, “The secret of success is location selection as well as opportunity. If we choose the right location and right size, the business more than justifies the investment in large formats.”
The focus, however, should be on offering competitive pricing and larger number of products. Also, the assortment should be relevant to the catchment where you’re locating your store. With regards to the related increase in the merchandise display and products on offer, Kulhalli adds, “Not only increase in real terms, but perception of a large collection does get instilled. More importantly the display is more organised with enough space to appreciate the collections, as well as give relief to the customer to select merchandise."
The VM angle
When handling large floor areas, the circulation is essential. The customers need guidance to allow them to explore all niches and angles. Angela Kreutz, CEO, Blocher Blocher India Pvt Ltd opines, “This is why we start our work with the determination of the routing and the block plan. By doing so, we can visualise how big the different areas are and where a particular department or assortment make sense." She further points out another fact that a lot of customers do not feel comfortable within huge shopping spaces. Therefore, a sense of privacy has to be established, eg, by creating niches. So, an emotional connection between customer and goods is aroused. This relation is enhanced by visual merchandising tools, eg, deco points, which give styling advise to the customer.
“Store experience can be memorable only if it is oriented towards the customer. Large format stores have the luxury of being spacious. They are well stocked being rich in product skus on display and sale. They try and create a destination shopping experience. This very facet turns out to be their bane, since large format stores are less personal and less customised. It takes time to shop and it is easy to loose shopping focus", comments Ashish Deshpande, Director and Head - Product & Retail Innovation, Elephant Design Pvt Ltd.
Dominic Twyford, Client Director - Fitch too concedes that VM and merchandising plays a pivotal role in generating interest and catching the attention of consumers. “Eye catching and engaging VM is slowly but surely gaining importance, becoming more strategic rather than purely aesthetic. Retailers are beginning to see the benefits of creating intrigue and differentiation versus competition through merchandising," he opines.
Kulhaali says, “VM is integral to a store design and we value the same and invest large amounts in ensuring that VM highlights the store and the merchandise. It is a critical part of our marketing plan for not only large format stores, but also all our Tanishq stores."
All levels of communication are intermingled. For example, VM has to go together with decoration concepts and retail graphics and all of them need to speak one stylistic language. “The holistic effect is supported by the creation of orientation points and cross merchandising strategies, which subtly connect different store areas and become part of the guiding. Additionally, focus points must be staged as they show the whole assortment at a glance. As eye catchers they whet the appetite for shopping. All these measures lead to a superior customer approach," adds Kreutz.
| Success Funda • Larger store, wider merchandise assortment • Pre-decided destination, so planned purchase • Right location, merchandise matching catchment demands attest the success • Size and stature of store builds confidence • Gives opportunity to offer customer conveniences like children play area, rest rooms, leisure area, etc. |
| VM Funda • Customer oriented VM • Well-planned demarcation of different zones • Infusing a sense of privacy • Making sure a customer is not lost in a • huge space • It has to be strategic besides being aesthetic |
Results achieved
Kulhalli comments, “The response in all our large format stores have been exemplary, the sales as well as satisfaction levels are far higher than our smaller format stores. Financially, they are well within the norms set." Kurien also shares that the response so far has been very encouraging.
Given that the mall culture is growing at a fast pace, there is expected to be phenomenal growth in the number of these stores which would in turn lead to spurt in sales. With the concept of mall shopping fast catching up among buyers and given the availability of all major players under one roof, some time down the line, the share of such stores to the total business will reach a double digit figure.
