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    Offline and Online Synergy

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    Operating through Infiniti Retail, is a national chain of multi-brand electronic stores and a wholly owned subsidiary of Tata Sons, a holding company of the . The chain follows large-format retailing of consumer electronics and durables and has also expanded into Croma Zip stores, Croma Kiosks and their own online vertical www.cromaretail.com. Today the brand has a total store count of 96, offering over 6,000 products from 5 categories that include entertainment, home appliance, IT products, digital imaging and communication. Ajith Joshi, MD and CEO, Infiniti Retail, talks to Images Retail about the company’s successful growth and synergy offline and online.

    The Company

    As the tag line says “We help you buy,” Croma believes in going out of their way to meet customer demands. Launched in 2006, Croma is present in 16 major cities namely Mumbai, Pune, Hyderabad, Bengaluru, Aurangabad, Nasik, Delhi-NCR, Chennai, Surat, Rajkot, Vadodara, Ahmedabad, Amritsar, Jalandhar, Ludhiana and Chandigarh. Targeting all age groups, the retail chain has customers who purchase both offline and online. Clocking `80 lakh to `1 crore of top line per week, Croma has grown at 100 percent year-on-year with an average sale price (ASP) of 4,000 to 5,000. “Our pre-paid order contribution is very high (close to 76 percent) compared to any other retailer,” informs Joshi. In 2008, Croma launched Croma Life Accessories with over 200 products across all categories with a market share of over 2 percent at select categories such as ACs, small appliances and accessories. It currently has a whole range of personal care products from hair dryers and body massagers to technology products and accessories including fl at panel TVs, tablets and mobile handsets, durables ranging from washing machines to air conditioners.

    For two consecutive years, Croma bagged the award for “Brand Excellence for Private Label” by the World Brand Congress. The company’s Portable Air Conditioner was also honoured with “Product of the Year” award.

    The Store

    Although Croma does not sell through shop-in-shop format, the brand’s retailoutlets are located both in malls and high streets, depending on the vicinity and catchment. The average store size of Croma is 8,000 sq.ft. and the chain also has multiple formats ranging between 150 and 15,000 sq.ft. The chain offers products across various price bands; however, the mid- to high-price bands are most popular. The average selling price in most categories is much higher than the industry norms because most of the premium or affl uent customers prefer Croma as they believe that the brand understands customers’ requirements and aspirations. The key categories are mobiles and computers followed by audio/video and appliances.

    Trends

    Today’s discerning consumers know what they want to buy before they even go out looking for it. Joshi explains: “According to various fi ndings in India, Internet is influencing consumer behaviour as 7 out of 10 buyers know the exact brand and model that they would want to buy with the help of online research before entering the store. As per Technopak, e-commerce is projected to expand at a compound annual growth rate of 45 percent to reach $200 bn by 2020.”

    Going Online

    Noticing the growth in consumer trends for online shopping, Croma launched its e-commerce portal www. cromaretail.com in 2012, which received a huge response as clients were already familiar with the fact that Croma is a Tata Enterprise. The core idea to venture into e-commerce was to extend the retail chain’s reach beyond the boundaries of brick and mortar stores. Says Joshi: “To leverage our portal, we have started with page post link ads on Facebook and Twitter to bring the latest in technology to enthusiasts. With Indian consumers no longer shy of spending on themselves, Croma has witnessed good sales on the personal care category, including foot spas and back massagers.” “We have grown 2.5 times since the launch of online portal in terms of number of visitors and four times in terms of number of orders per day. We receive 10,000 customers per day online, so we are positive with the response in the coming 2-3 years. We have serviced more than 500 smaller towns which our brick and mortar stores could not reach. Our online portal offers our customers a choice of shopping interface, and with the new website that provides features such as ‘Order Online, Pick from Store’, we have achieved online and offl ine synergies and are able to provide superior consumer experience,” he elaborates. Observing the consumer boom in tier I and II cities and with the increase of Internet penetration, Croma is looking for a broader audience. As per the market research, the total e-commerce market is currently pegged around USD 10 bn. Joshi further says: “The price range for online purchases is usually between Rs2,500 and Rs3,000. However, Croma has maintained an average selling price of Rs5,000 consistently. The fastest moving product online currently is the S7562.”

    Supply Chain

    Croma currently has seven warehouses across South, North and Western parts of the country. These warehouses take care of the store as well as e-commerce delivery requirements. For private label products, the one at Bhiwandi is the centralised warehouse. All other deliveries are sourced locally by a buying team based out of Mumbai. “Our supply chain works on ‘theory of constraints’, and inventory at front and back end is governed by the same. We do store replenishment and last mile customer deliveries from our DCs. In this process, once the systemgenerated orders are received, we pick the material and dispatch to stores on the same day in most of the cases. For last mile customer deliveries, we have a fleet, which is managed by third party, of about 90 dedicated trucks and an additional on requirement basis. Product deliveries are done as per the customer’s requirement. For customer returns, in case of defective or large damaged products, we do the pickup and for everything else, customers come to the stores and return the product. Post that RPA process takes over, which is handled by our service team,” he explains. Talking about the challenges, Joshi explains: “Some of the challenges faced by retailers in online shopping are preventing the websites security from professional hackers, managingback-end and logistics, ensuring secure financial transactions and settlement with the banks.

    Marketing Strategies

    Focussing mostly on consumer engagement, Croma believes in engaging customers in on-ground and in-store activities, along with regular promotions and discounts. Croma’s new “brick and click” model allows a consumer to select a store based on the his pin code mapping. Once the store is selected and the check out verifi ed, the order will be locked to the selected store and the product can be picked up by the consumer within 48 hours of placing the order. Consumers also receive a special coupon while using the delivery option for the their next online purchase, which speeds up the delivery process.

    Staff Training

    Croma extensively trains its staff so that they can gain in-depth knowledge of the products available at the store. “Employee training is another integral part of our success. We at Croma have special SMS-based training for executives who have small nuggets of information to upgrade staff knowledge. The initiative helps reach learners across regions instantly,” Joshi shares.

    Expansion Plan

    The company plans to open seven more stores during this fi nancial year and also expand their e-commerce platform. The seven large-format stores will be located in Chennai, Hyderabad, Mumbai and Delhi, and the online venture will reach out to 293 cities and towns. Croma plans to consolidate their presence in the cities they are already present in before stepping in other cities. Croma’s private label will be introducing more innovative personal care and IT products. “With close to 10 percent share of our top line, our in-house brands are doing extremely well and we like to introduce more innovative products across categories this year,” concludes Joshi.

    *This article was originally published in the Feb 2014 issue of IMAGES Retail.