Future Group, India’s largest organised retailer, is pioneering a new format of electronics retailing which is a hybrid of Futurebazaar.com —its e-commerce portal and e-Zone —its brick and mortar electronics retailing arm. Christened NewZone, the format, which is expected to launch in the next six months, consists of a kiosk with an electronic catalogue of consumer electronic products linked to a centralised warehouse from where products would be dispatched to customers.
“Vibha Paul Rishi, the group strategy and consumer director and a member of our executive board, has been appointed the CEO of this format,” said Kishore Biyani, managing director at NSE-listed Pantaloon Retail (India). Future Group has had issues trying to make e-Zone its multi-brand electronics retailer profitable thanks to the high lease rentals and distributed inventory across stores, which carries the risk of obsolescence.
NewZone hopes to cut out the high lease costs and the distribute inventory by being present in existing high traffic Future group formats and having an electronic catalogue that consumers can browse to choose products. The catalogues would have multiple views/shots of each product, which would allow consumers to zoom in etc. Inventory would be centrally managed at warehouse hubs.
“Most consumers buying a LCD/LED TV today for instance, know what they want. In many cases they have already done their research online and have finalised the brand they want to purchase. Using this format we can offer them a good price by sharing a part of their costs savings,” said Vivek Biyani, director at Future Group. NewZone, the retailer hopes will help it build significant volumes while controlling inventory risks and help it on the road to profitability that’s been elusive in the consumer durables retail business.
Unlike an e-commerce only company, NewZone will offer customers the opportunity to come to physical stores to return/get after sales service for items purchased through the retailer. Top Future Group officials said the rollout of this format is around six months away.
The NewZone format is part of the new digital strategy drawn up by the group which already operates across 73 cities and 65 rural locations pan India. “We want to be present on all screens whether its online, mobile or devices such as iPad. Already online sales are expected to triple from less than one per cent to three per cent. We therefore believe the time to build a digital commerce business is here and now,” said Vivek Biyani.
As part of the digital plans, the groups’ electronic marketplace futurebazaar.com is expanding its portfolio of products from electronics to fashion apparel, food and general merchandise such as luggage and footwear for homes etc. “We now deliver to 16,000 pin codes across India and even offer cash on delivery in several products. So far we have focussed on electronics which accounts for between 55-60 per cent of our sales but now we will push other categories too,” said Vivek Biyani.
One of the plans being worked upon in the low margin foods and grocery business is for consumers to order online or via the telephone and pay online or on delivery and collect the goods themselves from a nearby Food bazaar or Big Bazaar at an agreed time.
“Millions of consumers are already online. Like the early days when malls came up but there was hesitation in purchases, appointment shopping on the Internet is still limited. The opportunity for us is to create compelling product propositions that stoke the desire and entice people to shop online,” said Rishi.
Source : Financial Chronicle