Himadri Buch
Moneycontrol News
Shoppers Stop is planning to open five more department stores and expand its presence to 41 cities, up from the current 38, said Rajiv Suri, Managing Director and Chief Executive Officer (CEO).
In a freewheeling interview with Moneycontrol, Suri said the company will focus more on revamping women's wardrobe than offer discounts. He added that the strategy of selling old merchandise at discounted rates may not be the right choice as fashion trends keep changing.
The company will embark on its Pujo festive offer, particularly in east India, from September 7.
The company will also focus more on artificial intelligence to understand consumer behaviour.
Excerpts from the interview:
Q) Amazon is planning to have an offline presence. You have tied up with them, so what is the kind of traction you are witnessing?
A: Our relationship with Amazon is quite new. Shoppers Stop's first step was to go online on the Amazon website, which is now complete. We have now 200-plus brands on the website.
We have got a micro site on their fashion page, which gives us a strategic advantage in terms of visibility, and some Amazon consumers are now coming to our stores. We have opened three kiosks with Amazon. The test period is on, the results are positive and we will open more of these by the end of the year. We hope to open around 12 kiosks by the end of the year.
Q) After the Amazon tie-up, how many pincodes have you reached?
A: Amazon reaches a lot of people, so we will benefit from that. We were earlier delivering from our warehouses and now we deliver from our stores . It has increased our speed, bringing us closer to the customer and we are able to offer better services.
Q) How many Shoppers Stop stores are you planning to open?
A: We are going to open five department stores. We are currently in 38 cities and planning to expand into 41 cities. We will open 10-12 beauty stores.
Q) In the last couple of weeks, Shoppers Stop shares have been fluctuating significantly. At one point, the stock was up around 10 percent. Is anything changing within the company in terms of strategy; are there any significant plans?
A: It is the market sentiment rather than any activity on our side. There is a lot of news about FDI investments in big companies here, and recent news of the Walmart purchase may have pushed up the share price. On top of everything, the good news is that there is strong GDP growth. Hence, a combination of all these factors is increasing growth in the consumption sector.
Q) Are you in talks with any global player?
A: We are not in talks with anyone.
Q) How is your expansion in Tier II and Tier III cities?
A: Our expansion in Tier II and Tier III cities is going quite well. Some of the results have been really good. We have opened in Jhansi, and have seen exceptional results there.
Each of our stores have a beauty section. In India, we are the number one retailer for beauty. We have got new brands in our department stores and are opening new stores ourselves. We have about 100 beauty stores with brands like Estee Lauder, Mac, Bobbi Brown, Smashbox, Clinique and we are also expanding our own department stores.
Q) What is the technology innovation that you are working on?
A: We did invest about Rs 60 crore in our omnichannel capabilities and digitisation, and that investment is paying off.
Now we are about 2x in terms of customer visits. This year, we should get about 80 million visits to our e-commerce website. We need to continue to focus on conversion and content in order to increase sales.
Q) In current times, planning is done by data. So how are you looking at artificial intelligence (AI) or machine learning to create your future strategy?
A: We are using analytics quite a lot. Around 75 percent of our sales come from First Citizen customers. So, we do have a lot of data on buying behaviour.
We focus on analytics to know what they like to buy, when they like to come and how often they come. So, analytics is super important and we are focusing more and more on that.
Layering on to that are two things — forecasting analysis or predictive analysis and next is AI. These are the two things we have started to look at and are working on how we can improve that.
It is important that each store has its own product mix, its own assortment. For example: If you go to the North, the size of the customer may be different, they like big logos on their clothing; if you go down South, they like small logos, and half-sleeve shirts. For us, every city is important. What we sell in Juhu is different from what we sell in Vashi in Mumbai. So, product mix must meet the consumer’s need.
Q) Are you looking at any more tie-ups with foreign brands for your department stores?
A: We always look to add brands. In fashion, we are planning to get some brands from abroad but that is during Spring '19 or Autumn '19.
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