Top Indian retailers talk about what it takes to make a brand of national reckoning and what to consider when assessing new markets for expanding to a national footprint.
Connecting with heterogeneous customers in the Indian market
Chairman, MD Retail (Soch), Manohar Chatlani says, “The first thing to do is decide how many cities you want to be in – what is the plan? You don’t just plunge into expansion mode a strategy. You may follow a cluster approach like us = study a city, population, scope, competition, infrastructure. Eg a city like Hyderabad, I can open 10 stores. I can afford a good area manager, warehouse and advertising. If I don’t have these, then I am at a disadvantage. In Tier II cities, we need to plan without these things.
“Everything that we do – especially in the bespoke tailoring section – is all in-house. We understood that to expand and to get out of our comfort zone, we would have to take care of backend details. Once that was done, we would then follow the hub-and-spoke model. We open one store in an area. Once that becomes a success, we then open other stores in the area, using the first main store as a hub, replicate that model,” he said.
Opening up new markets, connect with new consumers
Says MD Ripple Fragrances and Managing Partner N Ranga Rao & Sons, Kiran Ranga, “I am Managing Partner of N Ranga Rao & Sons, which is the custodian of Cycle brand agarbattis. Here the dynamics are completely different. We run on an FMCG model, where we prospect new markets and connect with different customers. This is very product category agnostic. At a macro level, one would need to understand the prospect of the total population index. You need to understand who you need to hire, plan your journey cycles as well as your systems and processes and your distributor network.”
“In our business cultural sensory perceptions in understanding what fragrances the consumer likes is very important in our business,” he adds.
CEO and Co-Founder Naturals Salon and Spa, CK Kumaravel says, “We have 460 stores in the south. We operate on a franchise model. Using other people’s time and money responsibility. We did suffer losses when we opened stores without proper research of an area.”
CEO and Founder YLG Salon and Spa, Rahul Bhalchandra, says, “We expanded pretty fast without proper market research and we had to shut down our stores in Mumbai and Pune. We are now back in Bangalore and Chennai and hopefully our second avatar will be quite different. We see that customer habits are different and we can’t fundamentally change our offerings across different markets. We are a services business, not a product business and so it’s hard for us to change our offerings across different markets.”
“The wellness industry is changing rapidly and there is need to use technology, aggressive discounting to bring in customers. There also needs to be a lot of money and muscle power to expand nationally. Since we are fully company-owned and operated – not franchise-operated like Naturals – we can’t expand rapidly,” he adds.
Using digital marketing intelligently
Says Manohar Chatlani,” Digital is the one medium where you can reach your consumer, economically, in a particular geography or gender or a specific age group. This can be done on social media, or by collaborating with banks and credit card companies. It’s really amazing what you can do with electronic media.”
Kiran Ranga adds, “For the Iris business we have employed social media and digital marketing extensively. We are educating people all the time about what fragrances can do. We engage them through the digital medium – talking about specific fragrances and their moods. As a category, we have a lot of scope for gifting and targeting the right audience online, we have found that we increase store footfalls.”
Expansion & Hiring in New Markets
Says Rahul Bhalchandra, “You need to be very clear as to the kind of culture you have in your organization and new teams in different markets need to be indoctrinated into that culture.”
The importance of catchment mapping is critical. Once you have finalized on a location, understanding the location, the customer profile, the economic background of the customers in the area is paramount, as is pretty much tailoring your entire approach in the area including marketing.