BUILDING THE WINNING STEPS

The gaps to be plugged-in

Despite its attractiveness, India is not an easy market, rather riddled with perception complexity, complex in terms of customer aspiration, consumer behaviour. In the present situation, as Ranjan takes up the rein he knows five years have passed and this is high time for working out the bottom line. And this needs tweaking of products and pricing, re-modelling formats and setting up efficient supply chain management. “India is not about best practices, but about next practices, so we need to fit our brand as well as fashion sensibility and price range to suit the Indian consumers,” says Ranjan.   “We’re in the process of consolidation and after that we will be going to consumers with our marketing plans to make create more brand awareness.” Currently, there will be lots of consolidation for s.Oliver. The pinch is felt for unnecessary spacious stores which are too large for the brand as well for the customers in an emerging market. The stores with an area of 5000-6000 sq ft will be downsized to 1200-2400 sq ft.

The present supply chain management of s.Oliver stores in the Asian countries is incurring high cost that involves unnecessary travel of goods and increased lead time.  The company is sourcing goods worldwide from the countries like Bangladesh, India, China, Mauritius and Turkey. All these goods are going to Germany and then coming to India. Even a shirt which is being manufactured in Bangalore is going to Rottendorf, Germany and then coming back to India.  This time consuming, cost implicative process will be replaced with setting up a distribution hub in Asia. “That is one part. The second part is the inventory management.  Here, I think we have to put in a lot of processes in India, which are very normal in the international markets, but which are not here in India – in terms of limit planning, open to buy, that means whole inventory management needs to change. And that’s what we’ve already started with a percept and we’re looking at a very efficient inventory management. These are the two key aspects we need to change,” says Ranjan.  In the next six months, s.Oliver is going to introduce a concept of never going out of stock.  It’s using system like EDI (Electronic Data Interchange) so that such concept can be made possible. Globally SAP is the technology partner of s.Oliver.  The efficiency needs to be modelled upon global standard that s.Oliver follows. “If we see jeggings or chinos or coloured chinos as a trend, today we’ll be able to introduce that within 90 days on the shop floor, which not many other brands can do,” comments Ranjan.

Expansion on speed mode

s.Oliver has allocated a budget of €20 million for the Indian market. The company is planning to add in next five years 200 points of sales with EBOs and shop-in-shops.  Currently it has 20 POS. However, steps are more cautious now fixing the primary interest on shop-in-shops. “With shop-in-shop partners the outreach is much faster. We have Lifestyle and Kapsons as the partners for shop-in-shops. We’re working out a system so that we can expand rapidly with them. Our focus is tier I and II cities to start with.”  Ranjan himself has made several trips to Punjab since he has taken over in April 17. His trips to cities like Patiala, Amritsar, Ludhiana, Jalandhar and as far as Bhatinda enabled him to understand the customers. This clarity of the situation highlights that there is a requirement for newer pricing strategy. “We got very high marks for quality, very high mark for visual merchandising, but at times affordability is an issue and that’s what we’re working out,” he says. “What we’re looking at offering the customers more choices at entry level prices. In some cases we’ll be offering denim at `2499, which we offer typically at `3500. But, we’re not going to get essentially cheaper every where. We’ll be introducing new entry price levels and more options at entry price levels, so that the young consumers whose affordability is there can buy.” he affirms

In the next phase, s.Oliver will invest aggressively in brand awareness in 2013 once the renewed position and price architecture are in place. A marketing programme focused for each sales channel will be defined to improve conversion and brand awareness amongst the target group.

The brand is also majorly looking at stepping up in-store experience through training of the sales persons. The initial phase of five years is a learning experience for s.Oliver. “It has gained lots of experience in the Indian market. We need better understanding of the customers and that’s why we’re stepping up training of sales persons on floor to understand the customers’ needs and how we can service them. Here we’re looking at improvement.”

The game is not lost for the brand which entices consumers through its mind-boggling VM. S.Oliver does 12 collections a year and accordingly the façade has a new look every month with revamping of the key look of the stores. “We have recently been recognised for the same by In-Store Asia 2012, where s.Oliver bagged the Gold Trophy in VMRD Awards and the merit award for best visual merchandising and window display respectively, competing with brands like Diesel, Puma, Levis, Raymond who participated in the same categories,” informs Ranjan, and we hope that apart from this recognition his steps towards strategic improvement will give the brand a position that it deserves.

Data info by Pranjal Sharan