The Realities of Virtual Retail

We changed the game from Touch and Feel to Look and buy!

Until now, shopping was restricted to limited days and hours of the day. Consumers in cities, where the retail boom hadn’t reached were satisfied with whatever was available. However, after the coming in of virtual retail, scenario has changed.

HomeShop18, is a comprehensive virtual retail business, operating in a multi-media environment including television, web, and other media to reach customers based across geographies. Sundeep Malhotra, CEO, HomeShop 18 opens up to Vrinda Oberai regarding the company’s successful completion of two years and the virtual retail scenario in India.

Vrinda Oberai (VO): How will you define virtual retail?

Sundeep Malhotra (SM): Virtual retail can simply be defined as the platform, which utilises every other medium to reach out to the target consumer except for a physical interface of ‘touch and feel’. This platform involves the use of interactive electronic media, primarily cable and satellite TV, e commerce portal, catalogs etc. India is trying out new things and we are in a fast growth mode with a young population, which adapts very early to technologies. These can vary from mobile phones to Internet or credit cards. In our effort to make this a credible and trustworthy platform for shopping, we have emerged as the habit changer from the ‘touch and feel’ concept of shopping to ‘look and buy’ mode for established and branded products.

VO: How does the virtual retail industry establish a connect with the consumers?

SM: One has to find ways to communicate the product proposition in the most appropriate manner. The viewer would only buy from our medium if he/she finds more value from the product or service that we offer. We need to control and closely monitor all aspects of customer experience and fulfillment. One needs to apply sales and marketing skills to a host of product categories. Live shows demonstrating the product usage and benefits are organised for not just promoting sales but also educating the prospective users about new products and technologies. At HomeShop 18, we try and build a lot of excitement around the products we offer through promotional programs like Weekend Loot and Hot Sellers where hefty discounts and best of the products are on the offer. We provide superlative quality, exceptional value and unmatched convenience to our viewers.

VO: You also track and analyse customer purchase patterns. How do you do the same?

SM: We are a Direct-to-Home business where we are constantly talking with our customers. This enables us to track not only purchase patterns but also forecast trends. Retail trends are definitely changing drastically. The Indian consumer is an early adopter and this has been displayed across industries like telecom, automobile and technology.

When we started, we thought only small towns will buy from us. Today, we have customers coming in from Delhi, NCR, Hyderabad, Chandigarh, Amritsar, Tier II, III and IV cities, who shop through this platform. That way, we can proudly say that our logistic distribution reach is better than any other company in India.

VO: What is the best mode of promoting the virtual retail platform?

SM: Homeshop 18 operates out of different media- web, catalogue and TV. We are trying to reach out to our customer in every other way than a physical store. That’s the reason we have a website, which is completely an ecommerce play. We have print alliances with 28 newspapers. We will bring every virtual means in this fold.

VO: What are the major changes that Home Shop 18 is looking at with its successful completion of two years?

SM: These are the early days in the industry. We are the pioneers in the home shopping space and five years down the line, we would like to be respected and regarded as a credible medium of shopping. The major tasks are, to bring credibility for the home shopping domain in the minds of the customers, brands and vendors; and to help the customers buy products without absolute touch and feel.

Our focus would also be to increase our reach and logistics footprint. We are very optimistic about the near future. We are looking to launch new value-driven shows and bring in a variety of products and brands. We are building our loyalty program and a host of customer oriented programs and initiatives. There is a great opportunity, the need is to be innovative, customer oriented and value driven to see unparalleled growth.

VO: What was your company’s turnover last fiscal?

SM: We have a robust distribution channel and tie up with top logistics companies. Despite a challenging environment, Homeshop18 delivered a credible performance both in terms of sales as well as viewership for its home shopping TV channel. As per the last published Network18 results, HomeShop18’s Gross sales soared 80 per cent Y-O-Y and 45 per cent Q-O-Q for Q3 FY 2009-10.

VO: What is the payment procedure with respect to virtual retail?

SM: HomeShop 18 makes shopping fun and easy. Great products and established brands are offered on multiple payment options, time bound delivery and a 15 days money back ‘no questions asked’ guarantee. Our ‘Cash on Delivery’ payment mode allows them to pay when they receive the products. Other payment options available are cash before delivery, EMIs, credit cards/debit cards, cheques and demand drafts and Internet banking.

VO: What have been the major obstacles for the company in these two years?

SM: Our real challenge was to burst the common myths associated with the TV shopping experience, change the legacy of home shopping by lending credibility and status to the domain. Since this was a new business model for India, the consumer knowledge did not exist; we had to build everything from scratch. In the beginning, there weren't too many people who believed this was possible. Not too many brands wanted to sell through us.

Today, we have a 600 member team and sell more than 20000 SKUs. We distribute products to 2750 towns across India. We are India's first and only 24 hour shopping channel and get a new customer every eight seconds. We sell across different product categories like electronics, apparel, jewellery, appliances, books, etc. which come with quality and guarantee.

VO: What kind of investment are you planning to make this year?

SM: We are very optimistic about FY10. We are looking to launch new value-driven shows. We are looking to bring in a variety of products, brands and services and launch a host of customer oriented programs and initiatives. We are planning to invest in loyalty and reach programs. We will make additional investments in our broadcast infrastructure, IT systems and channel distribution.

VO: Will you be adding any new product/vertical to your existing portfolio?

SM: We recently forayed into services sector by tying up with Bajaj Allianz to make available Life Insurance through Television. Many more opportunities lie in service industry apart from getting in new products in existing categories and forming new categories.

VO: Where do you see virtual retail (in general) and also, your virtual retail brand-Home Shop 18, five years down the line?

SM: We are the pioneers in the homeshopping space and five years down the line, we would like to be respected and regarded as a credible medium of shopping. Plans for the future include being present on every television set in every household, to be known as a consistent innovator. We also plan to strengthen our services category and want to be regarded as a company that brings in innovative yet branded products.