Luxury brand Address Home plans to open 70 company-owned stores in the country by 2015 across various formats with an expected investment of Rs 40 crore. The retailer also plans to come up with its own online retail platform by the end of this year.
Elaborating on the future plans, Rajat Singhi, Founder and Creative Director, Address Home, said: “For 2013, three ‘concept stores’ are in the pipeline, which will be large-format stores with a much wider product offering. These will be truly unique in terms of the in-store experience, taking lifestyle shopping to another level. The brand also plans to open 12 new company-owned stores by the end of 2012-13 in Pune, Ludhiana, Chandigarh, Chennai, Bangalore, and Delhi-NCR.”
Address Home is currently focussing on opening company-owned retail stores, having matured that concept, it will look at franchise stores in somewhere around 2013. “Having said that the primary focus will be to ensure that each store (company owned or franchise) offers the same brand experience and level of customer service,” Singhi said.
The brand considers various factors before choosing any location to open outlets. Singhi added: “We research the area thoroughly before making a final decision. A few important factors considered include competition and brand neighbourhood, location costs, accessibility, visibility, and traffic.”
According to Singhi, Address Home is also tapping the potential for luxury goods in tier-II cities as there is a lot of customer demand for its brand/products from these cities. “The product offerings might be tweaked slightly to better cater to specific tastes depending on the location; however, the brand experience will remain the same across our stores,” he quipped.
Highlighting the key challenge faced in India as a luxury retailer, he added: “The home improvement sector in India is largely dominated by unorganised players which poses a key challenge for us. We are here to bridge the gap between luxury and mass premium in this category. Address Home aims at providing affordable luxury products to its customers.”
The minimum store size of the brand falls somewhere between 1,500 and 3,000 sq.ft. Address Home has three formats, each varying in terms of store size and merchandise selection. However, a common design philosophy runs through each format.
Sharing the marketing and distribution strategy of the brand, Singhi said: “We focus on CRM activities and relationships to strengthen our business. In order to maintain and sustain our positioning as an affordable luxury brand, we do not generally go for discount oriented activities. But we initiate CRM activities to increase awareness and build brand loyalty. Advertising in premium print and online media help strengthen brand identity and recall.”
Singhi claims that with new product launches each week and new collections every month, the company conducts quality checks from sourcing to final production for ensuring the quality of the products.
Commenting on the emerging trends in the Indian luxury market, Singhi said that the luxury market in India is constantly evolving and growing at a steady pace. Since markets in the West are more or less saturated, most international luxury brands and home-grown Indian luxury brands are expanding their presence in India. The well-heeled Indian consumer is also travelling frequently to overseas destinations and is more aware of luxury brands than before; he has become more aspirational over the past few years. High levels of disposable income allow a consumer to pursue a more premium lifestyle.
Addressing the issue of retail space availability for luxury retail in India, Singhi added: “It is a well-known fact that retail space for luxury retail is short in supply in India due to the lack of luxury retail malls and high streets dedicated to luxury brands. However, the retail landscape is evolving rapidly and soon you shall see more luxury retail destinations being developed across the country.”
Talking about the competition that foreign luxury brands bring for the segment that Address Home operates in, Singhi said that the company is not afraid of the competition from the entry of international brands as it will help mature the market.”
The brand conducted an extensive research before deciding to foray into the overseas luxury markets of Dubai and Kuwait. Singhi said that contrary to the Indian market, where organised retail is only 7 percent of the market itself, the retail industry is highly evolved in the West and certain parts of Asia. “In these countries the competition is much higher even in the luxury retail segment. While entering such markets, Address Home had to make an intensive research about the local culture and customer preferences. We also need to develop a high understanding in customer service to maintain the product differentiation and the positioning of the brand,” Singhi added.
Dubai and Kuwait were chosen for the international foray as Singhi believes that not only from India consumers from all over South East Asia and Europe go to shop in Dubai and Kuwait as these are great shopping destination for affordable luxury.