Shop-in-shop format catches rage in retail

With the retail houses experiencing down turn in sales, corrective measures are in offing. Brands plan to convert their stand-alone retail format to shop-in-shop format. What makes them adopt this format, Sharmila Das takes a look!
Way to shop

Retail house like Future Group’s book and music chain, known by the name of Depot has adopted a policy of converting its stand-alone-stores to shop-in-shop within Big Bazaar. While the number of Depot shop-in-shops has risen to 123 whereas that of stand-alone-stores has come down to nine. Same goes with the UK-based footwear brand Lee Cooper. The Future Group is in the process of converting its 30-odd independent stores of Lee Cooper into shop-in-shops. As informed by Atul Takle, Head, Corporate Communication, Pantaloon Retail, “We are not closing the existing stand-alone stores; only the expansion of the format would happen in the shop-in-shop format, because we have ambitious plans for our major formats like Big Bazaar, Pantaloons and Central. It makes more sense having shop-in-shops for formats like Depot, because the footfalls into a Big Bazaar / Central etc. are much higher.”  

It is not that Kishor Biyani is alone in the race, but retail names like Dubai based Landmark group, Hyper City Retail etc. are on the verge of applying this policy of converting stand alone-stores to shop-n-shop format. Dubai based Landmark group recently laid out plans to convert their brands Kappa and Bossini into shop-n-shop format, though a group official says, they are also looking at exclusive stores for these brands.  

Shoppers Stop had earlier planned to open stand-alone outlets for children and women’s wear brand Mother Care. That plan also has been changed to shop-in-shop format recently. BS Nagesh, MD of Shoppers Stop said, “We open new stores without much information, but when we close them, we have complete knowledge about the operations,’’ Shoppers Stop, recently pulled out of a catalogue of retail ventures with UK’s Home Retail group under the Hypercity-Argos brand. The company exited the food business after announcing that its Café Brio outlets would be replaced with Café Coffee Day outlets.  

Factors triggering shift 
Soaring rentals and declining sales are the prime reasons for the shift from stand-alone retail format to shop-n-shop format. The customer fancy having caught by big format stores, the retail formats have started feeling pangs of customer run-out, and are no more considered to be the safe option for retailers. The sluggish economy has further hurt the retail format. Purnendu Kumar, Advisor, Technopak, opines, shop-n-shops in a larger format are helpful for retailers in getting more sales in comparison to specialty retail formats. Kumar says, “Big format stores are able to capture both monthly purchase and impulse purchase of shoppers.” Also the rent per square feet area is making these retailers to move. As retailers have to shell out more rent per sq. ft in specialty formats than hypermarkets where they book large space and get cheaper average rates. "Besides, by doing shop-in-shops they can save a lot on power, staff, security and other utility bills,” adds Kumar.  


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