Shoppers Stop MD and CEO Venugopal Nair said consumer confidence and spends were better than last year and the company was bolstering the private labels business and stepping up investments in building more digital capabilities
NEW DELHI :
Shoppers Stop Ltd has started operating 60-70% of its outlets since the curbs imposed to contain the spread of coronavirus were eased following the ebbing of the second wave of the pandemic. The company runs 84 department stores, 130 specialty beauty stores for brands such as M.A.C, Estée Lauder and Bobbi Brown, besides home solution chain HomeStop and bookstore chain Crossword.
In an interview, Venugopal Nair, who was appointed as the managing director and chief executive officer (CEO) in November, said consumer confidence and spends were better than last year and the company was bolstering the private labels business and stepping up investments in building more digital capabilities. Edited excerpts:
Could you sum up the consumer sentiment for the next six months?
Consumer sentiment will be almost directly proportional to the pace of vaccination. As the level of vaccination goes up, I think consumers’ sentiment would start to open up. In the first few weeks of the opening up (after the second wave), consumer confidence and the level of spend have been better than after the first wave. It could be because of a bit of pent-up demand.
In terms of consumer behaviour, if you see the stage of growth that a country like India is in, it’s still in its early days and there is a lot more growth that is to happen. It is also linked to expected economic growth. The trajectory is the only one that we would be really looking at, whether it happens in two months or six months, and that would depend on how quickly vaccination happens.
Shoppers Stop saw omni-channel contribute 6% of business in March quarter. How did you manage that?
Investment in omni-channel is the biggest priority for us and that has accelerated over the last year. All our stores are linked to Shoppersstop.com. That’s a unique advantage because we have large stores with a huge set of brands. Each store would have 300-500 brands that we would be retailing and the ability to be able to link all of these onto Shoppersstop.com, apart from our own distribution centres, gives us a significant point of difference compared to many others. We can utilize our inventory a lot more efficiently.
In terms of online growth, we have added resources within our stores to fulfil orders and ship from our stores. The majority of our stores now have an area to pick-and-pack and ship to our customers. We are working on upgrading our app and the customer UX on the app, while improving our analytics capabilities. We have partnered with a large firm for this.
What impact did lockdowns have in the June quarter?
I am not at liberty to talk about the June quarter because we are in a closed period. However, there was some impact because of the closure of stores, which is very obvious, but we were in a much better place than last year because we had prepared ourselves and streamlined operations and costs a lot and also adopted different selling methods to reach the customers. We have a much stronger digital channel and various ways for customers to reach us, whether through the personal shopper programme on WhatsApp video or the White Glove service. Hence, we were able to service our customers a lot more and with much higher volumes than in the earlier period.
You took over last November. What is your mandate?
The mandate from the board has been very clear in terms of focusing on our target customer, which is the young family in the mid to premium segment of the market. That’s been the heartland customer of Shoppers Stop. Besides, earlier when we used to talk about shopping, it was predominantly brick and mortar stores, whereas now, it is both brick and mortar, as well as digital. Our view is that subsequently it will be just omni-channel.
I use the word omni-channel as a true way by which the customer can dip in and out across channels. Omni-channel happens when a customer can actually have the full array of products available in the store, as well as online, and is able to start a journey online and finish offline or vice versa. So omnichannel is the first pillar of our strategy.
The second big area that we are focusing on is growing private brands across apparel and beauty.
The third pillar of our strategy is beauty itself. We are the leaders in beauty in the physical space… Expanding that through-multi brand standalone stores, as well as through online and growing beauty on shoppersstop.com is the third area for us.
The fourth area, which is also a big advantage that we have, is the first citizen loyalty programme that we have upgraded and refined sometime last year. It is a paid programme and we have more than 8 million customers.
What is your share of private labels today?
Our private label business is 12-13% of our total business. We expect that to grow significantly over the next couple of years and get to between 25% and 30%. We have brands such as Fratini, Kashish, and Haute Curry. For children we have Karrot. We also launched two more brands in sleepwear or loungewear, and in athleisure. Both of these brands have had very good success backing the fact that these categories were doing well during the pandemic.
With the younger consumers moving to digital first brands, what are your plans for the beauty category?
We are the largest player in the physical beauty space in the premium segment that we operate in. In 2019-20, the year that finished just before covid, it (beauty) was 16% of our total business. With more than 160 points of sale that we have across shop-in-shop and standalone (stores), we have a sizable business in the physical space, and we are expanding rapidly online.
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