How Voonik’s mini channels are selling new retail format?
In a conversation with Indian Retailer, Voonik’s senior vice president Hari Prasadh tells how the e-tailer is using technology to build its offline chainsBY Shwetha Satyanarayan | October 20, 2018 | comments ( 0 ) |
Walk us through the concept of mini channels. Why did Voonik choose to launch this format and not a regular offline store?
The mini channels are Voonik’s idea of new retail format. They are not a pop-up or a micro pop-up store, but a micro store format shops that are very strategically located at our customer catchment areas and serve as neighbourhood-friendly format stores that are closer to customers. The mini channels aspire to meet the demands of everyday women by offering affordable ethnic wear.So what’s new retail format in these mini channels is that they are focused stores which means they offer 1 product category for one gender, and we have picked up to offer a wide range of kurti collections for women at these mini channelstores. Since Bengaluru is our core market, we decided to launch these stores starting from here. The key foundations of these stores are that they are accessible, affordable and convenient. For a lot of customers who want the touch-and-feel-and try experience, these physical stores will meet the needs.
You referred to setting up the stores at customer catchment locations. How were these areas identified and who are the target customers?
Presently, our stores are functional in four locations - Frazer Town, Jayanagar, Mathikere and Gopalan Innovation Mall- while the fifth one will be launched soon. These stores were opened by leveraging data of our existing customers. We used the customer data and ticket size to identify where the stores should be set up and what collections should go at these stores, and accordingly the mini channel stores were launched. Our target customers for these stores are anybody looking for everyday fashion. However, it’s mainly for college students and women in the age group between 25 and 40.
It’s an interesting use of technology to set up offline stores. In what other ways are you bridging the offline vs online?
Well, you see the mini channel stores are the natural extension of our online stores. In the first phase, we have identified the locations and customers and have launched the stores. In the next phase, we want to blur the lines further and that is exactly what we want to achieve through new retail format. We want to intertwine the online-offline experience and go beyond just the omni-experience. It could be whether customers want to look from the phone in the store and buy at the store or touch-and-feel whatever product they see online or pick up at the store what they have ordered online. Our goal is to make these stores accessible and convenient.
But how you curate the collections that go into these offline stores?
Although we use the customer data to understand what sizes, colours and collections are popular for a particular location, these stores don’t represent depth. We wanted our stores to represent style more than depth. Also, the collections vary from store to store because the expectations of customers are Matttikere is significantly different from those in Frazer Town and Jayanagar. So we have collected key data and buyer feedbacks in order to understand what should be displayed at these stores.
In what other ways are you leveraging technology at these stores?
Technology is a driver for such micro store formats. It helps create highest value per square foot and have maximum coverage within cities. Customers see value in such technology powered accessible format stores which increased drives footfalls. In the long run, we will be adding up more facilities at the offline stores like in-store kiosks, convenient store pickups, among others. We have identified 7 main tech features and 10 enabling features that will be adopted in the later phases of the offline expansion.
What are your expansion plans?
We want to build the right working model that will add up to customer experience. We don’t want these stores as part of our branding strategy, but would like to use for customer acquisition. We want to increase the volume of stores and plan to launch at least 25 stores in the next Q3-Q4. However, the biggest limitation with offline stores is that we can’t scale as quickly as we do with online sales. Hence, we want to crack an efficient model in Bengaluru. Soon after, we will follow our customers in the other cities like Hyderabad, Maharashtra and Lucknow, and go pan-India with the mini channel stores.
In your next phase of expansion, will the stores be dedicated to other product categories and gender too?
Honestly, we have full control in what we are doing presently and would continue to do so. We don’t want to intimidate our customers with larger format stores and we have realized we should to focus on our customer demands more than anything else. To be able to do that, we will be unable to operate multi-category formats. However, it is too soon to talk about our future store expansion plans.
What are your financial targets?
Our immediate target is to make our stores profitable and although some stores have achieved the break even target, we do not have any financial targets as such. We are looking at adding more value experience to customers.