Govind Shrikhande, Customer Care Associate, President and CEO, Shoppers Stop, talks with Varun Jain about their expansion plans, the importance of licensed merchandise and more.
Varun Jain (VJ): What are the future expansion plans of the Shoppers Stop? What would be the investment for the same?
Govind Shrikhande (GS): We are looking to expand Shoppers Stop total retail space from the current 1.9 million sq ft to a commanding 3.5 million sq ft in the next four years. We will be investing Rs 500 crore to introduce 40 new stores across the country in the next four years time. We currently have 33 Shoppers Stop outlets, and we plan to add 10-12 new stores in this fiscal with an investment of Rs. 120 crores.
VJ: How does Shoppers Stop look at the competition with so many same format stores present in the market?
GS: The competition is multifold and it is for everyone to see. The competition is not only in the departmental store but also in the specialty store. You have to really create your own space. We have two formats. One of them is a private label where we have a Globus, Pantaloons and Westside operating and then there is a format where Lifestyle and Central operates. So, each of us chose to play on certain strength. We have tried to build an assortment that is very strong in cosmetics, jewelry, skincare, watches and footwear. So, you can see that our assortment is so strong that the competition is not able to take that kind of a share in the market space we are in. Menswear are strong, women ethnic wear is likewise and kidswear with Mother care again is very strong.
VJ: What is the ratio between the international brands and the private labels in the store?
GS: In Shoppers Stop, we have around 18% of private labels and more than 50% would be the international brands. As for now, we are not planning to introduce more private labels in here. We would operate in 18-20% space only. Our focus is on international brands. We are trying to create an image of house of brands for the fashionable family.
VJ: Why more focus on the international brands, when most of them have their exclusive stores in the country?
GS: See, we are yet to become a brand loyal nation and that is the main reason why I think its better and comfortable for Indian consumers to find different international brands under one roof rather than going to their exclusive stores. For instance, if, I, as a consumer, have to pick a shirt, then I would pick it from a selection of brands that operates in the same category. I can pick a Van Heusen, Louis Phillip or an Arrow, whichever fits best. So we are yet to see Indian consumer sticking to a brand. Say, he only wears a Tommy, in this case, going to an exclusive store benefits. But the majority will go in for a departmental store.
VJ: Any plans of Shoppers Stop going in for the Franchise business model?
GS: For Shoppers Stop, we are not considering the franchising business model, although Crossword stores are on Franchising.
VJ: We have seen Shoppers Stop selling licensed merchandise too often, be it the Vodafone Zoozoo or the Love Aaj Kal merchandise. How important is selling the licensed merchandise from Shoppers Stop point of view?
GS: Selling licensed product is very important from Shoppers Stop point of view. We have sold Om Shanti Om merchandise in the past, which was a huge success. We had record sales and what we sold was like 3-4 times more than what others could sell. We are selling Vodafone Zoo Zoo’s in our stores till date and our customers simply love it. Selling licensed product is very important in terms of consumer connect because whatever is topical will sell. No fashion lasts beyond 4-8 weeks in current scenario and I think that anything that is fashionable, topical and stylish will sell. We focus on licensed merchandise the right way without cluttering them together. We see a good pull and a good customer connect.
VJ: Your take on revenue sharing in malls vs mall rentals?
GS: Consumption is growing and a lot of malls are opening all over India. Big brands and small time players are jumping into the market to make their presence felt, resulting in high rentals. High rents have always been a state of concern for every brand who wants to position themselves in the market. Last year, rent rates were as high as 12-15 percent, but now it has come down to 7-12 percent, giving relief to many of us.
But I firmly believe in the revenue-share model as it benefits both parties without putting pressure on any single body. As we all know that it takes a minimum of 6-7 months for a mall to pick-up, so there will be fewer footfalls. But as soon as business picks up, things go well.
VJ: Where does Shoppers Stop prefer to be present? -In a mall or a high street.
GS: I think both of them have their own places and both will continue to co exist, akin to what we see as big retail vs small retail. There is enough space for both of them to grow.
For more info, visit https://www.shoppersstop.com/