As life returns to normalcy after the COVID-19 pandemic, consumers have adopted a more omnichannel approach triggering a change in the strategy of large retail stores, indicated Venu Nair, MD and CEO, Shoppers Stop. According to Nair, the company’s offline sales are heavily influenced by the digital channel and about 60-80 percent of its sales originate online.
“Consumers visit our website to see and research about the products; however, the shopping especially for high-ticket items happens offline,” he added. “We expect this will go even higher as our user experience and user interface design improve given our investment,” said the MD while addressing investors at a post-earnings call.
Currently, Shoppers Stop draws about 5 percent of its sales quarterly from online channels. However, given the omnichannel behaviour of the customers, the company has decided to stop treating online and offline as two different sales channels.
“As omnichannel integrates offline and online, internally, we have decided to stop tracking our digital sales separately, as the journeys are merging, and the lines are getting very blurred,” said Nair.
Shoppers Stop is investing about Rs 12 crore quarterly to create a better omnichannel experience for the customer. “We have been investing and continue to invest in the omnichannel experience, especially on analytics, on data, on content, all of which enables us to engage with our customers in a much better way,” said Nair.
Several offline retailers witnessed a surge in online sales as the store operations were impacted due to COVID-19-related restrictions and consumers moved to digital channels for shopping. However, now with the ebbing of the pandemic, the sales on the channel have slowed down. The retailers insist that this has led to a more omnichannel behaviour as compared to the pre-pandemic period.
Overall, retail sales have jumped substantially as consumers flock to stores after several quarters of restriction. Owing to this trend, Shoppers Stop reported a 368 percent year-on-year (YoY) jump in its net sales for the quarter ended June (Q1) to Rs 942 crore as compared to Rs 201 crore reported in the year-ago period.
The performance, however, came on the back of a low base of last year as the country grappled with the second wave of the pandemic. Shoppers Stop had reported a net loss of Rs 118 crore in the Q1 of FY22, while it registered a net profit of Rs 23 crore in the first quarter of FY23.
"The strong growth momentum, seen in March 2022, persisted through the first quarter of FY23 and continued in July. We recorded a strong quarterly performance, and believe that the growth will continue in the coming quarters due to easing of COVID-related restrictions,” said Nair.
The company has now set its sights on the festive season which is expecting to further revive the fortune of the ailing retailing industry.
“The upcoming festive season is likely to release a significant pent-up demand and further aid the company's revenue growth,” said the MD.
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