India has always been a magnetic field for international brands and foreign investors. The country is the fifth largest and preferred retail destination for international brands and businesses and has become the next destination for expansion for many renowned international brands across categories. Besides consumer sentiments, India’s policies too have become more favorable than ever before for these firms to enter and do business in the country.
In fact, according to Forrester Research, consumer spending in India has increased to US$ 245.16 billion in the third quarter of 2020 from US$ 192.94 billion in the second quarter of 2020. One such brand that has bullish plans for India's growth is none other than global fashion major GUESS.
The brand which has been operating in India since 2012 in partnership with Major Brands, has relaunched its in-store experience in the country with an outlet at DLF Mall of India in Delhi-NCR recently and is planning to open about 50 exclusive stores across India in the next 5 years.
“In terms of retail, Indian market sentiments have been reasonably strong since the pandemic. After the second wave, consumer demand has continued to grow, paving the door for GUESS' entry into the Indian market. The brand is now adopting a more holistic strategy to interacting with its customers, in which a brick-and-mortar presence is equally as important as an online presence since it allows us to build an experiential environment for the customer. The large size and diversity of the Indian market do provide the chance to reach our target audience. Our focus is now on the target segment of Gen Z and Millenials that account for more than half of the sales in the industry. We opened our first store at the DLF Mall of India, Noida recently and are planning to further open up at prime locations in Mumbai and Pune in the coming months,” maintains Manoj Kumar Nair, CEO, Gaurik Lifestyle.
Gaurik is a company known for its knowledge and expertise within the field of retailing. It is a customer-focused group and operates through two distinct business verticals – Retail, and Distribution, each with its preponderantly own customer base, sale channels, and merchandise range.
The store opening has brought back GUESS to the consumers who love the brand for its iconic range of denim, dresses, apparel, shoes, handbags, accessories, and more. So, what was the re-entry strategy of the brand this time?
The Re-entry Strategy
The newly-opened GUESS store has been aesthetically designed blending artisanal designs with a minimalistic touch, providing plenty of space for showcasing the brand’s themed total looks and imagery. While this is the first offline outlet by the brand, GUESS has plans to open 10 more stores this year.
“GUESS is a global fashion brand with a legacy of almost four decades in bringing trendsetting apparel and accessories. As part of our expansion strategy, the brand first plans to expand the base to the Tier-I metropolitan cities and slowly penetrate into Tier-II cities, touching the top-grossing malls for the ease of our consumers. Then, we will gradually look into approaching the micro-markets and launching accessory stores in smaller cities that will carry our key categories like handbags, watches, etc. As people’s habits, tastes, and needs evolve, we will continue to innovate and find new ways to engage with our customers. We opened our first store at the DLF Mall of India, Noida recently and are planning to further open up at prime locations in Mumbai and Pune in the coming months. The aim is to launch more than 10 stores by the end of this financial year. In terms of online, GUESS India will have its standalone online presence by the next financial year but all the products are now available online via leading e-commerce platforms such as Myntra, Tata CliQ Luxury, Ajio, and Nykaa. All our products are also available at Shoppers Stop and we are also partnering with Lifestyle now. The market sentiments post-pandemic have been quite buoyant in terms of retail. The consumer demand has continued to improve after the second wave which paves the way for our entry in the Indian market,” asserts Manoj Kumar Nair.
The brand caters to a wide age demographic ranging from a teenager and beyond. GUESS has made its entry in the market with the new Spring/ Summer 2021 Collection that includes a trendsetting, timeless range of denim, dresses, apparel, shoes, etc., featuring vintage florals, fun prints, and classic pastels.
Another key part of the collection is accessories and a range of handbags – satchels, totes, backpacks, and luggage. What’s more? The brand has ensured to offer the most trending category of clothing right now in India – athleisure. The new collection has a range of athleisure wear launched exclusively for the Indian market. These will feature chic, comfortable, and playful designs crafted to suit the work-from-home situation.
Talking about the same, Manoj Kumar Nair avers, “The fashion industry is definitely adapting to the post-pandemic landscape. The current state of fashion is comfort. It means that comfortable, casual-aesthetic clothing is becoming the consumers’ lifestyle now. Working from home without any limitations has cultivated this environment suited for multitasking. Even beyond that, the modern consumer has also become more health-conscious, they want to look after their wellness & fitness and athleisure is making it easier for them. They now have more designer fashion choices that are comfortable as well as stylish.”
Another on-point strategy by the brand this time is its focus on sustainable and environment-friendly processes.
“A key element to observe in the following years is the incoming sustainable revolution. Millennials and Gen Z, who account for more than half of the sales in the industry, are the flag bearers of this revolution and they wish to associate themselves with brands that align their values with eco-friendly and sustainable manufacturing practices. Moreover, being eco-friendly and sustainable is more than just a commercial decision, it’s a moral responsibility. Even at GUESS, we are entirely transforming our production processes to be more sustainable and environment-friendly. We’re looking into recycling plastic waste to create yarn and using organic cotton for our denim, introducing the Indigo Flow Process which reduces the water consumption for washes by 70 percent while increasing the dye penetration, and reducing the use of chemicals massively,” elaborates Manoj Kumar Nair.
The Back-end Intricacies
The brand has joined hands with leading e-commerce portals for its digital expansion and has even tied its offline store with Tata CliQ to enable omnichannel operations. In terms of marketing, the brand has highly personalized strategies in place.
“Our approach to marketing is more channel and store oriented. Given that 60 percent of our sales are from e-commerce portals, our present focus is to engage with digital consumers. But as we launch more stores, we will be looking into more region and location-based marketing approaches. Our key promotional strategy is to have the right products at the right prices. We have realized that discounting is not the right way to move forward and that consumers of today are more focused on and attracted to quality products rather than discounted ones,” tells Manoj Kumar Nair.
In terms of product sourcing, GUESS is currently importing its entire collection from GUESS’ authorized vendors and is planning to manufacture and source from India itself once its business expands in the country.
According to GUESS’ internal report, the brand is working towards consolidating its supply chain by reducing volume from countries outside its top sourcing regions. GUESS sourced 27 percent of its apparel, jewelry, and accessories from China in the fiscal year 2021, according to its latest sustainability report, a sharp drop from 42 percent in the fiscal year 2020 as the company continues reducing its reliance on China to avoid tariff risk. Furthermore, suppliers from Bangladesh and India made up a larger share of the apparel company's purchases in the fiscal year 2021, at about 23.5 percent and 18 percent, respectively. In the fiscal year 2020, both were at less than 15 percent.
The Way Ahead
While the overall retail segment is gradually moving towards normalcy and the Retail Association of India maintained that the retail industry achieved 93 percent of pre-Covid sales in February (right before the second Covid wave), GUESS is aiming to reach Rs 300 crore mark in the Indian market in the next 5 years.
“As a brand, we wish to have a holistic approach in terms of communicating with our consumers, and be present in all channels so that we can reach our target audience. We want to be available at all the places, physical or online, that our target audience is present. Our aim is to be the Number One fashion brand in the country,” concludes Manoj Kumar Nair.