Private Labels in Consumer Durables

Apart from branded offerings, most of the consumer durable retailers are also venturing into private labels to improve on their product offerings and sales margin.
Adding to margins

In India, consumer durable retailers are showing increased sales volumes mainly driven by young population with rising disposable income levels, easy finance options and increased consumer awareness. The major categories in consumer durable product includes consumer electronics, air conditioners, LCDs, Plasma TV, IT, imaging, Home Theatre Systems, mobiles, accessories, washing machines, refrigerators, microwaves and small home appliances.


Emergence of Private Label

Apart from branded offerings, most of the consumer durable retailers such as eZone, Reliance Digital, NEXT Retail and Croma are also venturing into private labels to improve on their product offerings and sales margin. Croma, the electronic and durables chain of Infiniti Retail, currently offers 50 different products under its private label brand Croma. The Company recently announced its plans to launch more private label products, like washing machines and so on. Speaking on company’s retail strategy, Ajit Joshi, CEO, Infiniti Retail Croma, said,Over the last few years we have been sprucing up private label. We are getting better at understanding and meeting the consumers’ needs and this is helping us create a market leading brand. Through our private labels, we are trying to customise the product to the requirement of nuclear and working families. We first identify the needs of the customer with regards to white and brown goods and thereafter the R&D team coalesce the features, related to those needs, at product development stage making our private labels unique. Croma products are cheaper by 10-15 per cent in comparison to branded ones and so they really hit the mark with the customer.”


Offer and Schemes

To keep the sales rate high, retailers from time to time, offer different promotional schemes and special discount on products. Apart from that, the customers are also provided with various finance options from banks and leading financial institutions. NEXT Retail, one of the leading electronic retail chain had recently organised one such promotional offer, ‘`Freedom to Choose Offer’- `Choose Your Products at Your Price’. Under the offer, NEXT Retail promised consumers to help them in getting the products of their choice, through various finance options from banks and leading financial institutions, so that the price of product can fit into customer’s budget. Sunil Mehta, the CSE - CEO, NEXT Retail India Ltd, said, “These kind of scheme helps consumer to get the best products at competitive prices and also entitle to various incentive schemes like assured gifts, scratch card offers and extended warranty, which makes the scheme more attractive to them."


Changing Consumer Experience

There have been several changes in the retail industry in the past decade. The past decade has been a watershed period in the retail industry. Shopping options and habits have never changed as rapidly as in the decade gone by. Consumers have been exposed to modern retail formats for the first time and they accepted it with lot of enthusiasm. Malls have come up, world’s leading retailers have made an entry, new product categories have entered the market and options in the existing categories have increased multifold. The shopping environment for the consumer has improved dramatically- more so in the bigger towns.


The Future

As retailers are exploring the potential in rural areas, their focus has now been shifted from tier-I to tier-II and tier-III cities. Informing about Croma’s future expansion plans, Joshi, said, “Our strategy is to penetrate deeper in the cities we are operating in. This will aid operational efficiency and allow us to garner higher market share. In tier-II and tier-III cities, there is a huge demand for branded products. We are confident that our brand Croma will do really well in these areas.

Currently, we are rolling out plans to have many more Croma stores in major metros. We will be opening a zip store in Pune; first in the city".



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