Seeing limitations in expanding physical stores in the future, Shoppers Stop has partnered with Snapdeal for launching its flagship store on its digital space. On the occasion, Govind Shrikhande, Customer Care Associate & Managing Director, Shoppers Stop Ltd. spoke to IndianRetailer.
Please tell us about your partnership with Snapdeal?
With the partnership, we are trying to build the best of both the companies, their reach and technology and our brand assortment and trust coming together. We partnered with Snapdeal to create a unified experience for the consumer. Consumers can shop at one place and get product delivered at other place. This can all be done through Omni-channel. We felt that there is a common ground that we could build together and we believe that it’s a great partnership for both the companies.
Through this model, consumer can click and collect, click and reserve and click and get delivered.
What will be the pricing strategy?
Prices of the products will be the same in line with offline Shoppers Stop stores. All the products will be sold at the fixed MRPs. No discount will be offered.
Wouldn’t there be crunch on the margin when Snapdeal will charge on every purchase?
We have Shoppersstop.com site which sells at MRP, Shoppers Stop physical store selling at MRP, on Snapdeal.com there is again flagship store of Shoppersstop.com so there can’t be any difference from our shoppersstop.com site.
When we are selling online there are certain advantages like there is no rent, no people cost etc. so margin wise there wouldn’t be any difference in long term. If I am looking at certain number of traffic to my physical store or online store, with our presence in thirty cities across the country, Snapdeal will give me access to 5,000 cities with millions of customers. This will be the benefit where Shoppers Stop will be able to reach to many customers at a given cost. And the cost will keep on falling.
How will you manage with the deliveries?
Our stock will be in the same cities so for deliveries the stock will be serviced from existing cities to the multiple cities. Currently, Shoppers Stop is not present in Guwahati but Kolkata already has a store and warehouse so if we get order from Guwahati, the same stock will be serviced, so there will be no additional cost coming in for servicing that place.
Hence, for the deliveries to the additional pin codes, Snapdeals’ infrastructure will come handy because they have already built their infrastructure for reaching the customers in eight, sixteen and twenty four hours.
If you are investing Rs 60cr over the next three years in building shoppersstop.com and you are partnering with Snapdeal then why would anybody go to Shopperstop.com?
Different people have different likes and dislikes, so with this tie-up what we are trying to do is tap the consumer going to Snapdeal. Lot of people who are connected with Shoppers Stop site know the brand and they come. But some of them don’t think that Shoppers Stop is their choice, they are already going to Snapdeal. I can get those customers footfall through Snapdeal to come and shop with me. There are millions of such customers.
So over the time will you reduce physical store expansion?
Over time, we are seeing the limitation in growth of physical spaces, because the numbers of malls built in India are actually reducing, existing malls are also shutting down, so we will definitely have a limitation beyond the top fifty cities in India. In contrast to this, Snapdeal gives me access to every city possible because it already has the consumer base and that’s the advantage. The physical store has a limitation of servicing certain number of customers but online doesn’t have such limitation.
In future will you do such tie ups with other eCommerce players like Flipkart and Amazon?
If we are in Inorbit we are not in Infinity, similarly we are focusing on strategic tie-up and build it up.
India is investing in the technology of Omni-channel, the pilot that is happening in north India, its Snapdeal or Shoppers Stop?
We are jointly working on to decide what pieces both the parties will work on. Its not a large investment it’s the same Rs 60cr that we are talking of. It will be the similar omni-channel that we do with Snapdeal in northern part. This Omni-channel pilot is kicking off in Diwali, including the launch of our app.
How much of this partnership will contribute to your total revenue?
We believe, currently our online share is one per cent and we want to take it to 10 per cent and this partnership will definitely help us to really bridge that gap. If it works well then 10 per cent is not a limit, it can be much higher. This 10 per cent of growth we can achieve in much shorter time.