Hyderabad-based retailer Q-Mart has changed the retail landscape of the city by being the first to introduce gourmet, organic, imported and specialty food categories, way back in 2001. Its promoters have also brought in new concepts in merchandising and technology, in-store display and consumer engagement, all of which have helped the store build a large and loyal base of customers. Nibedita Roy of Progressive Grocer spoke to promoters B.V.K. Raju and B.H. Rao about the store’s retailing philosophy and its plans for the future.
How would you describe the journey of your store over the years and its growth until now?
B.V.K. Raju: The store commenced operations in 1997 when organized retailing was in a very nascent stage in India. The current promoters bought out the store in 2001 and turned it around into a modern trade outlet with innovation in technology, better merchandise display, enhanced in-store experience. Since we took over, Q-Mart has been consistently flourishing and has emerged as one of the leading supermarkets of Hyderabad. This is the 16th year and we continue to be the leader in gourmet, imported and specialty food retail in this region.
The business has grown very substantially from a humble turnover of Rs 30 million in 2001-02 to its current levels of about Rs 360 million annually. The year-on-year growth has been in double digits since 2001 and profits have been stable all through. The store services a premium niche in food and home needs retailing. Q-Mart has been one of the first stores in the country to introduce gourmet, organic, imported and specialty food categories, way back in 2001. Q-Mart was also one of the first to have introduced retail sale of bulk cheese in its delicatessen. Gourmet and imported food and health and organic food are significant contributors to the sales of Q-Mart.
What is the product portfolio at your store?
B.H. Rao: Q-Mart’s food product profile extends to gourmet and world foods, health and organic, delicatessen, frozen and chilled, fresh, ready to eat, confectionery and bakery, groceries, juices and beverages, etc. The non-food category includes specialty cookware, bake ware, crockery, cutlery, child care, personal care, plastics and other home needs.
What is the sales contribution from your major product categories?
Rao: Our maximum sales contribution comes from food, which is about 55 per cent and it covers gourmet, bakery, grocery, fruits and vegetables, RTE, etc. About 45 per cent of sales is from non-food categories like personal care, home care, child care, crockery, cutlery, etc.
Which are the fastest-moving product categories in your store?
Rao: Ready to eat, gourmet foods and world cuisine are the fastest growing categories. Organic and health foods, specialty foods and cookware and bakeware in the non-food category are also star performers.
Which are the new and emerging categories and what is your assessment of their market potential?
Raju: Organic, health foods, specialty tea, exotic vegetables and fruits, etc, are the few emerging categories. I feel there is immense market potential for these products and these will surely see a substantial growth in the years to come.
Tell us about the customer profile at your store.
Rao: Our customers are well-heeled and travelled Indians, NRIs, gourmet food lovers, health food patrons, high income individuals, aspirational individuals, connoisseurs, cooking enthusiasts, expats and the elite of the city. They are our core customer segments over the years.
What are the marked differentiators for your store that puts you apart from the other retail players?
Raju: Q-Mart offers a plethora of domestic and international brands. We are known for the quality of our products, variety and uniqueness of assortment. These are some elements that are the hallmarks of our store. Apart from that, we have some products that are exclusively available only at Q-Mart, as we own their selling rights. This has helped our store create a niche for itself.
Also, Q-Mart has a very customer-centric approach. With our service and presentation, we continue to form an emotional connect with the customer, therefore making him feel part of the Q-Mart community. The store is designed in a different way, which appeals to the desired target customers. Right from merchandise display to digital display, everything adds to a great in-store experience. Our well-trained staff and management take care of every customer by helping and guiding them. This has helped us develop a strong bond with our customers. This personalized approach has strengthened our consumer connect and it makes our customers want to shop exclusively with Q-Mart and keep coming back to us every time.
What are your other mechanisms for receiving customer feedback?
Raju: Apart from providing personalized help and service to customers, we also use social media and the Internet effectively to communicate on an individual level with the customers. This has resulted in an increased feedback from customers on service and product requirements, and in getting constructive suggestions, which have helped open up more avenues for growth and develop new categories. Putting all these mechanisms in place helps to get quick customer feedback through which we gain better understanding of our customer needs.
Any interesting concepts or innovations you have introduced at your stores?
Rao: We have prototyped a small format digital video signage – a unique display – that offers an interactive experience at the shelf and at the POS. We have totally revamped the look and feel of the store. Besides, our focus is to form an emotional connect with the buyer so as to make them feel part of the Q-Mart community. Besides, we have adopted some out-of-the-box concepts in category positioning, which has resulted in a significant increase in product awareness and sales.
What are the marketing and promotional activities do you take for pushing sales?
Rao: Q-Mart strongly endorses the principle that customer service means relating with the customers on a personal level. All our engagement strategies, promotions, etc, are built around this basic principle. Conventional concepts like EDLP, loss leader strategies, discounts etc., are totally avoided as they do not fit in with the core values of Q-Mart. We are committed to giving our customers a genuine experience of being served with the best assortment of quality products at the best value. Our marketing and promotions are restricted to in-store, BTL, word of mouth. We also make use of e-mails and social media, which have emerged as significant ways of reaching out to the target customers.
What are your plans for growing your online presence?
Raju: In the near future, we have plans to evolve Q-Mart into an integrated brick-and-mortar chain and create our own e-commerce portal. This Omnichannel retail plan will cater to the niche market of specialty food and home retail.
What’s in store for the future in terms of expansion?
Raju: We are planning to come up with two new Q-Mart stores. The second Q-Mart store is expected to open by Feb-Mar 2018, and the 3rd store is planned later that year. At present, we are focusing on Hyderabad and would be looking at Visakhapatnam, Chennai and Bangalore in the years to come.