Building Successful Retail Businesses: How retailers can create billion-dollar brands – India Retailing


In a bid to support retail employees and their families impacted by COVID-19, and Trust for Retailers and Retail Associates of India (TRRAIN) hosted Retail Panchayat, a first-ever, pan-India humanitarian campaign.

Building Successful Retail Businesses: How retailers can create billion-dollar brands

, Chairman and Managing Director, IMAGES Group, said, “Retail is people’s business. The retail sector employs 46 million employees and a majority of them come from middle-income and lower-income salary classes from across India’s urban, semi-urban and rural heartlands. Their livelihoods and futures are in the immediate peril as the retail business continues to be deeply damaged by the ongoing economic and COVID crisis. IMAGES Retail is working very closely with TRRAIN to support most vulnerable of our human resources, retail’s foot soldiers, through the Retail Panchayat – Intelligence with Charity.”

The Retail Panchayat platform was used to exchange ideas brand building, business models, role of advisors/ mentors and managing crisis at leadership level.

The second session was co-hosted by , Founder, TRRAIN, and Amitabh Taneja, Chairman and Managing Director, IMAGES Group. The guest speakers included:

, Managing Director, South Asia, Middle East & North Africa,
, Managing Director, Lifestyle International
– Vikram Bhatt, Founder & Director,

Building A Billion Dollar Brand in India

Taneja kickstarted the conversation by saying that it takes a different kind of person to build fashion business and brand. He wanted to know why no Indian company has been able to build a cult brand. “What is missing?” he asked. “Why we haven’t been able to build billion-dollar brands?”

“Like in the technology business, you need engineers and software coders to build a build a great product, I truly believe that if you are not passionate about the product which is the core and heart of the business, it is very difficult to get to the level of building a global juggernaut in terms of fashion. If you look at how products are built in technology or consumer durables segment, the heart of the product is built from consumer insights and therefore deep understanding of consumers. Sometimes, founders who build outstanding products, they have that uncanny ability to connect with the consumer and build that product. To build a great fashion company, you need to have both of these – passion towards the consumer and passion for the product,” explained Sanjeev Mohanty, Managing Director, South Asia, Middle East & North Africa, Levi Strauss and Company.

He illustrated this with an example. “I have been very passionate about the denim business. I bought a laser machine back when nobody had heard about laser, worked in a factory where I washed denim myself and thus really understood the entire process deeply. This is the way to understand and connect with the consumer. Also, if you do not understand the cultural nuances and don’t continue to build around it, then it’s very difficult to build something formidable and long term.”

“The denim industry came from humble beginnings. Let us take the example of Levi’s which has been around for almost 167 years. The penny dropped exactly 147 years back on May 20, 1873 when Levi Strauss and his partner, tailor Jacob Davis were given a patent to create work pants reinforced with metal rivets. The blue jeans were born and the iconic 501s were patented and sort of became a global juggernaut. Similarly, there are companies around the world that have really built a global platform, simply because they are thinking 50-100 years ahead of their time,” he explained.

“Another reason why we’re not able to build a billion-dollar company locally is because the market is small. In India, it is a very non-passionate business view sometimes and also very short term oriented in terms of investment. However, there is a large opportunity. We will see in India, just like in China, that once the per capita income crosses US$ 10,000 level, the first few Indian single large billion-dollar companies coming up. If you are running a very cool Gen-Z millennial consumer-centric apparel fashion brand, you have to listen to rock music, you have to embed into your brand what is happening globally in fashion, you need to understand why anyone would stand 10-hours in a queue to buy your product,” he added.

“And the most important thing is how you build an eco-system of the smartest talent, especially since retail is a peoples’ business. Today talent is not country-centric, it is basically hired from anywhere in the world. Our advantage is that we are not only a sourcing, innovation, and manufacturing hub but we have a large consumer hub. We are not thinking sustainability from a long-term point of view, we are not thinking what investment to do in terms of technology. We must concentrate on these along with catering to the consumer. With all the opportunities that are present in India, we should have been able to build a value brand like Primark by now. But, I am confident that over the next 10-20 years, we will see Indian brands emerging at a global scale of billions of dollars,” he further stated.

Building a Billion-Dollar Brand in the Post COVID Era

Nagesh furthered the discussion by asking how would someone, who knows the market and the product thoroughly and has the passion, set up a billion-dollar brand in 20 years keeping in mind the post-COVID era?

“In the post COVID-era, we are seeing major changes in human behaviour. There is a big trend for athleisure. The share price of Lululemon almost doubled in the last 30 days. Despite the fact that Yoga was invented in India, there is no yoga-wear brand in the country as yet. Now these are important things to note in consumer behaviour,” said Mohanty.

He said that there are three things that anyone who knows fashion, who has innovated on a product and who is a NIFT graduate and understands and has passion for fashion should do.
“Garner capital – capital is very easily available if you have a great idea. Secondly you need the willingness to basically stay on the course for a long haul and make personal sacrifices to really scale the business and test the model. The final thing is to bring on a personal board of advisors who can really raise the game for you,” explained Mohanty.

Landmark Group – Discovering the Uniqueness

“Landmark was founded by Chairman Micky Jagtiani, who had started the business 40 years ago as a one-shop retailer. He was concentrating only on retail, kept improvising 360-degree and learnt from the ups and downs. According to Vasanth Kumar, Managing Director, Lifestyle International (a part of the Landmark Group), globally a downturn comes in retail every 6 to 8 years and in the last 40 years, the company has seen 5-6 such cycles.

READ  How To Play Stock Splits For 3X Dividends, 200%+ Upside - Forbes

“As a company, we work with partners – brand partners, private label vendors or malls developers and we have a very strong relationship with both these partners as well as with our consumers. We study our target audience and their evolving needs, and we ensure that our employees as well as our partners understand our consumers as well as we do. As a team, we clearly demonstrate that we are there for the long-term and ensure that we continue to remain sustainable, viable while building even stronger relationships. A lot of patience is required for this,” Kumar explained.

According to Nagesh, “Landmark Group’s first Lifestyle store came as a competition to Shoppers Stop in Hyderabad and second store opened in Bengaluru. When Lifestyle came into the country, it came from understanding the product, the assortment and the placement. Shoppers Stop started with absolutely no understanding of the product, our whole concentration was around customer, customer experiences and modernising the way retail was being run in this country. This was the fundamental difference between these two and they have maintained it. Their investments are very high in product, so therefore their private labels are far ahead of Shoppers Stop and that is the core. Product and passion is extremely critical.”

Creating Ownership

Taneja then decided to steer the debate towards ownership of a brand. He said that the ownership lay in brand and the business and wondered how successful brands created ownership without giving shares but making every employee an owner.

Kumar explained this saying, “This is something that Landmark is known for. What we do at every level, be it store manager level or department manager level or at a design, concept, or buyer level, we ensure that they own their part of the business in how they run it. We understand their pain-points, we understand where they need empowerment, we make it easier for them to deliver it and we also go with the mentality of helping. We have very strict processes and guidelines for delivery. It does not mean that if they make mistake, we punish them. They are allowed to take risks and learn more as ownership and risk go hand-in-hand. You cannot demand ownership without allowing them to take risk and that is what Landmark is known for. We allow them to take those risks, learn from it and keep improving on it. This way innovation happens. They take these calls and keep moving while ensuring that both customer delight and operating efficiency are maintained. We need to have a balance and sense of ownership is a virtue which the Landmark Group was able to bring across all the levels.”

“Our leadership allows ownership at every level. If I am handling Lifestyle and HomeCentre, there is some ownership that is given to me to take calls. We do not expand because others are expanding, similarly, we do not keep quiet, because everybody else is keeping quiet. There is a steady growth, opportunity-led strategic expansion that keeps on happening in Landmark Group, so even in good times or bad times, we do not tipple. Balance is always maintained right throughout,” he added.

Franchise Business – Is It Worth It?

The discussion then turned towards the eternal question of franchise versus COCO stores. Taneja was of the opinion that most Indian brands should not have the right to run franchise stores simply because many of them hadn’t done well for their original stores and were not qualified to operate franchises.

“Many Indian brands – who haven’t sorted out their own retail business – are passing this very messy business on to somebody else to run and I do not think it works that way. Retail is a very passionate business. It is a very creative business, it needs to be held tight, have lots of systems and then only you can pass it on,” he explained.

Agreeing with him, Kumar said, “At the Landmark Group, we have the experience of being on both sides of the table. Apart from our own brands – Lifestyle, Max and EasyBuy – we also have Spar, where we are the licensor. Then we have Krispy Kreme where we have a franchise. One thing about Landmark is whether you are on the licensor side on the licensee side, the brand which you are handling is sacrosanct. You cannot mess around with the brand. Customers need to be serviced well and we need to triangulate the right product. One important quality of Landmark Group is obsession on the product. When we go for any new format or when we expand a format, we ensure that the product curation is at the heart of the business then target the customer whom we are connecting with and then get the stakeholders along the way. You have to get all the three on one frequency and then do it in a manner which is very efficient because retail is very similar to airline industry – high capex, high opex and low margins. You cannot have any inefficiencies built in, you have to give value to the customer whether you are franchisor or franchise, or licensor or licensee.”

“Take the case of Lifestyle, we do not do franchises. The brand is on the premium side of the market where we collaborate with 200 brands, get the right curation of these brands in the stores because customers not come to us because of Lifestyle, they come to us because of the brands which are curated there. It is a combination. We have to ensure that the right services are given. And at the premium side it made sense for us to do it rightly rather than giving it to a franchise. On the lower end of the business, we have EasyBuy – a brand which was launched 4 years ago for Tier III and IV markets – is a total franchised brand with 4,000-5,000 sq. ft. stores. It is a private label. We take care of the product. We take care of the operating systems but the entire front-end from the property to the staff, service, everything is handled by the franchisee and we chose the right partners and we are transparent about the whole business model, so that they understand it and we ensure that franchisees also run like an owner of it, so the customers see it as a Landmark brand very well delivered by the franchisee. In the middle, we have the largest value fashion brand – Max – where have a combination of own and franchise stores. 80 percent of Max stores are our own stores and 20 percent stores are franchise stores. Customers will not be able to make out the difference between the two – they will not know whether they are entering a franchise store or a company-owned store because the look-and-feel and the product, the freshness, the services, everything is the same. Just that we have partnership through a franchise in the city where he has a local crowd and this partner is able to deliver it well. In principle, philosophically, we do not differentiate the franchise format vis-a-vis our own format. If you are able to do that then customers come back to you again and again and you will be able to build the brand,” he added.

READ  French startup launches first high-tech transparent protective anti-covid mask - Yahoo Finance

Taneja then clarified saying that the franchise business was a proven successful model. It was only a failure for companies and brands who did not have all systems running smoothly in their main stores.

Understanding the Business of Fashion

Shifting tacks to the topic of fashion, Taneja said that fashion means anything that is adopted by many people and fashion changes very fast. “Since change is the soul of fashion, then clothes should not be expensive,” he opined.

Taking over from Taneja, Mohanty said, “Fashion is a way of self-expression through your clothing or accessories and put together in a cultural context. If you look at the streetwear movement in the US, it is a cultural movement driven by hip-hop and some of the underground movement. In a cultural context, if you go to a small town in Tamil Nadu, the way their saree will be very different from the way it is being wore in Maharashtra and in that context that is fashion. When we are talking about fashion to be cheap, I think, it is about the value delivered. Access and democratization of fashion is what we have really understood like if something happens at the Milan Fashion Week, it is adopted by serious top-end designers across the globe, then it trickles down to brands which do fast-fashion and brands which are doing sustainable fashion. I want to bring it to the context of what is going to happen post-COVID-19 is that consumers are going to become more deliberate about their purchase, they will understand that there is an impact which fashion has on the environment and on climate change. Sustainability is becoming fashionable and brands will have to embed that in their DNA. As leaders in the fashion industry it is important to build a brand that is profitable, sustainable and strong on the balance sheet.”

Shifting gears, Taneja asked the panel whether value fashion was the business model to follow in as far as fashion retail was concerned considering how brands like Primark, Zara, H&M and Uniqlo had done so well.

Answering this, Kumar said, “Being fashionable is essentially serving certain aspirational needs of the customers while staying up to date and that has nothing to do with the price-points. Between both ends of the spectrum – economy side or the premium side – fashion exists for the customer segment. The middle is the biggest. The value fashion segment exists across all categories and that is by far the biggest in any country. Aspirational fashion exists at the economy side, it exists at the premium side too, and it also exists at the middle which is the largest in terms of consumption. As long as the brands stay true to being fashionable, being aspirational and deliver continuous value and service to the customer, they will remain in vogue. In current times, things have changed, and sustainability is seen very seriously by customers at all income-strata. Is the company serious about the sustainability with respect to the product, employees, partners and that is being questioned now and that is going to be very important. Second trend is tech-enabling. Today, technology cannot be just an add-on, it has to be embedded in the company. Is the company tech-savvy, are they servicing the customer anytime, anywhere – all these things are being questioned and retailers are focusing on this ensuring that they are sustainable, tech-enabled and also understand the new moment of truth journey. Earlier, the way customers bought their products are no longer going to be the same. Today’s moment of truth journey has changed. As a retailer or a brand are you studying the correct moment of truth journey and are you going to stand up for your values, services with sustainability in mind, with technology and the curated product? We have to be very agile and ensure all the propositions are maintained at every price point to the target customer and if you do it continuously, you will be seen as a fashion brand, as a fashion company.”

Adding to this, Nagesh said, “Whoever is in the fashion business, needs to look at it very closely over the next few months. It is possible that there will be quite a change in human behaviour, and therefore retailers will have to alter the way in which they serve consumers. They will have to segment customers in different categories and serve each of them individually, in a personalised manner. Post COVID-19, we will see a new set of consumers. Retailers and experiences will evolve, and these experiences will not be either online or offline, they will be continuity of experience which can happen anytime, anywhere.”

The Salon Business – Innovating to Stay Relevant

The spread of Coronavirus and the resultant lockdown has had drastic financial ramifications on the beauty and wellness industry of India, which is by its nature, a contact profession. Even in Unlock 1.0, the salon business hasn’t received permission from the Government to operate at 100 percent capacity. In such a situation, is Enrich Salons innovating or changing the way business is done?

“In today’s situation, the salon business is risky, but so is commuting in a metro, visiting a supermarket or being on the road because COVID-19 is contagious. Our business is no different from any other business. Yes, we come in a close proximity while giving the services to the customers, so we need to be a little bit more careful. However, we have developed systems and processes over 10 years – like single use towel, single use kit for facial and manicure/ pedicure. Now in the current situation, we have added extra measures of safety after consulting with friends in medical field as well as the salon industry. We are ensuring that we have safe enough environment for our customer to come in. We have opened a few stores in Bengaluru and Gujarat. In Bengaluru, initially customers wanted to go digital and we also encouraged the same and we gave reward points to go digital but slowly and gradually customers are shifting to cash. Things are settling down and we are getting used to the new normal and after these 8-9 weeks of learning, even the fear is settling down. Now we are talking about being more cautious and being disciplined in our behaviour and these need to be incorporated in our daily routine,” stated Vikram Bhatt, Founder & Director, Enrich Salons & Academy.

READ  Seattle robotics company steps in to help after UW student’s startup dream is stalled by COVID-19 - GeekWire

“We have installed a pull mechanism to open doors with a foot peddle. Our sanitizers are inbuilt with touchless sensors. We have everything required to manage our business in a hygienic, low contact way. Today’s customer was missing out on shopping, entertainment, work, eating out and personal grooming. With the pahased unlocking of the economy, almost everything is coming back to life except personal grooming,” he further added.

Bhatt said that his organisation has long term goals.

“We are blessed with the best of teams which is full of energy, enthusiasm, positivity and that is something very important in our business. Since we come in close proximity with the consumer, we must remain positive for what is on the employees’ mind translates into how s/he works. We focus on the continuous learning and development of the team, not only in terms of technical learning for their work but also in terms of personal development, evolution and progression in life,” he said.

“We also try to create career path for our employees. Ours is not a structured business and there is always room for horizontal movement of employees. Employees need to look up, they need to learn and work hard to get to the next level, grow in their own roles. So, the investment which we have made for this great team of people is to take care of their well-being, their career journeys, helping them in learning and development and also bringing about a positivity in their way of thinking and enacting,” he added.

Finding Profitability in Salon Business

Taneja then wanted to know what the future of the salon business was. Is a salon model profitable when salon owners create private labels – much like in FMCG and fashion where private labels are a revenue generator model which lead to increased profitability.

Explaining this, Bhatt said, “We have redefined our business model with six blocks –
offline, online, service, products, home services and selling products at home. We need to manage this new business model with two important pillars of our business –
people and processes. Processes have been redefined and they keep evolving and we have to be relevant as we go along. Similarly, learning and training of people is very important.

“Going forward, we would like to see the share of product business increasing from 25 percent to 40 percent and in times to come, the share of product can also be more than the services, But so far, we have been so focused in our service business, experiences, getting these two right every time the customer comes in. We have seen that quite a few peer group players have tried increasing their sales of products, whereas we are at the conceptual level currently. However, for now I feel that the bouquet of products which we deal in is providing the consumer with more than enough choices,” he concluded.

ANGEL DONORS

IMAGES Retail is working closely with TRRAIN, which has set up a relief fund to offer and provide sustenance support to deserving retail associates and their families over the next three months until the COVID-19 situation settles down and there is some normalcy. TRRAIN will identify retail employees who have no means of income post April-May 2020 and provide them with an income bridge for three months until they are able to seek alternate employment. TRRAIN will also leverage government schemes by connecting the associates to them for short- & long-term relief. In order to ensure transparency towards the money collected by the relief fund (which has already reached up to Rs 2 crore), a five-member independent board has been set up.

The beneficiaries (retail employees) will also be on-boarded onto the TRRAIN Circle mobile app (an app to help and enable a better life for the frontline employees employed in retail & another sector) to have access to over the phone counseling services, additional financial services, and e-learning courses to develop skills & disbursement of financial aid.

Through the Relief Grant, TRRAIN will be offering to the beneficiaries:
– Rs 4,000 per beneficiaries over a period of 3 months
– Enrollment to Government of India’s relief schemes for grants starting from Rs 1,000

Retail Panchayat hopes to benefit over 5,000 families with much-needed financial support in these difficult times. Some of the angel donors towards this good cause are listed here:

Revenue Generation & Donation

, Country Manager, : Bogra is an enduring cyclist who cycled extensively in Indian Himalayas and Western Ghats on his mountain bike before he embarked on epic solo and supported 15,000 km cycling journey from Alaska to Peru. His new achievement is an adventure book ‘Away’ with maps and pictures that he wrote in 45 days during the lockdown period. It will leave you into the heart of the great wilderness of Himalayas and last 10 days which is in Alaska narrating fascinating adventures, many undertaken solo on the saddle of mountain bikes. He is selling this book on Amazon and he is going to donate all the revenue generated by selling this book on Amazon to TRRAIN.

Always Ready to Help

S.Raghunandan, President – Commercial, Bhartiya City said, “Once we open our centres, we will be happy to work with TRRAIN and IMAGES Group to help retail associates who have lost their jobs, create employment opportunities and also in any other way in which we can contribute.”

Learnings from Buddhism

Rishab Soni, Managing Director, SSIPL Retail LTD stated, “In the times of crisis that we are living in, everybody should try strengthening their spirituality in whichever they feel comfortable with. Apart from physical and emotional strengthening, spiritual strengthening is also important.”

Helping in More Ways Than One

said, “We have been doing a lot for migrant labour apart from our own retail employees and as we speak today, we have donated 6 million meals to them.”

Other angel donors who participated and donated included Abhay Kumat, CEO, and , CEO, Cityvibes.






READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here