A report by Deloitte titled ‘India Matters: Winning in Growth Markets’ highlights that India is likely to emerge as the world’s largest middle-class consumer market with an aggregated consumer spend of nearly US $13 trillion (Rs 13 lakh crore) by 2030. In this fast changing world of technology staying relevant is the formidable task.
A company that has emerged as one of the fastest growing retail markets in India owing to continuous inflow of disposable income and the advancement of technology is Tata-operated Croma.
Its retail arm, Infiniti Retail operates the chain Croma – the nation’s first large format specialist retail chain for consumer electronics and durables. Croma has successfully expaned into Croma Zip stores, Croma Kiosks as well as an online vertical, www.croma.com.
The retail chain was launched with the intent to help consumers in their buying process. The promise was delivered through knowledgeable and helpful staff, a wide range of brands and products, post sale service assurance and an international shopping experience.
The Brand’s Journey
Croma entered the modern retail market with sourcing and a backend tie-up with Australian retailer, Woolworths. Subsequently, Croma bought the India wholesale arm of Woolworths. This partnership gave Croma a strong footing in sourcing, offering a wide variety of products and price advantage vis-à-vis others, and also helped them in private label development.
Croma launched its first store in October 2006 at Mumbai, which is spread across 20.000 sq.ft and has more than 6,000 products on display.
Presently, the brand has 96 stores across the India, among these eight are zip stores.
CMO, Infiniti Retail, Ritesh Ghosal says, “Depending on the category, modern retail stands somewhere between 10-20 per cent. Another 10 per cent would be for e-commerce Croma would share the 1/5 of the organised market. Although, there are many important markets where Croma is not present as of now.”
Currently, Croma retails over 6,000 products in four lead categories namely, mobile phones, laptops, home and entertainment (including television and sound) and home appliances. Over 200 world class brands offering more than 3,000 gadgets are on display and continuously updated to meet trending business and lifestyle requirements. The brand is continuously looking to upgrade its existing categories instead of introducing the new ones.
Helping India Buy
Croma is the destination for CDIT (Consumer Durables and IT) buying in the country. Its zip stores are around 1,000-2,000 sq.ft. in size, and full format stores are usually spread across 8,000 sq.ft.
For store location, the brand prefers malls over high streets owing to the catchment which is more on the side of affluent people due to big ticket size. However, for zip stores – which are of the pick and go category – Croma bets big on airport locations.
Its exclusive strategy – offering fresh stock in brick-and-mortar stores.
“We do not keep a lot of old stock. The key difference between us and other retailers is that we order as per sale numbers. Whenever a new product is launched, a store will get one display device and two units. When these two units are sold, then we place an order for fresh stock again. So, we do not sit on old stock. And, display units get liquidated within the certain period ranging from 60 to 180 days depending upon the categories,” says Ghosal.
The brand’s leadership can be credited to an engaging international store experience where customers can touch, feel and try a wide range of live devices before they buy, to get a real-life product experience. A detailed customer handling process, GUEST (Greet, Understand, Evaluate, Suggest, Thank) and a customer promise ‘Main Hoon Na’ have been designed to ensure complete customer satisfaction. The promise stands on three pillars of Great Experience, Great Products and Great Affordability.
Another highlight is the knowledgeable, well-informed advisors who patiently sieve through perceptions and misconceptions to help customers make informed buying decisions. Delightful deals on popular brands and products are also regularly offered.
On Tier II Expansion
Croma enjoys a nationwide presence of 96 stores across 19 major cities across the country including Bengaluru, Hyderabad, Chennai, Secunderabad, Aurangabad, Nasik, Pune, Mumbai, Thane, Ahmedabad, Baroda, Surat, Rajkot, Delhi, Chandigarh, Noida, Gurugram, Faridabad and Ghaziabad.
The company plans focus on its existing markets to open stores and would consider to foray into Tier II & III places once the GST is rolled out. The company plans to add 10 more full format stores by the end of current financial year. The location of these new stores will be the same where Croma is operating presently.
Ghosal says, “Once the GST will come in place we will explore Tier II markets as well. Actually, the current scenario does not support same inventory model in Tier II cities. To replenish the product, we need the hub and spoke distribution system. There should be one distribution centre which caters to all stores within a certain radius. If a city can afford just one store then our current business model will not work, hence survival will be difficult for us. With revised GST, we will be able to move cross border with our current inventory. Then, it will be a totally different ball game.”
Croma, which is in its tenth year of business, follows the Omnichannel system and has integrated its offline brick-and-mortar stores with its online e-commerce portal.
“E-commerce sales are less than 5 per cent of the overall sales. This may not be a bad thing since I feel that e-commerce as a channel restricts opportunity for us, as compared to store walk-ins”, Ghosal says.
However, he does acknowledge the fact that e-commerce helps increase traction.
“These days e-commerce serves as the best platform for window shopping of all sorts of items, including electronics. In fact, our category display on our e-commerce portal is far better than any leading marketplace. E-marketplace platforms need to do justice with all available categories including fashion, beauty, sports and so on, putting a restriction on them. Our entire user experience, on the other hand, is designed around our category – only consumer durables and electronics, and we offer better opportunities to customers to compare features,” he adds.
“95 per cent of our sales in the store are hugely affected by the user engagement that we offer on our website. Consumers window shop our products online, compare them and then come to the store to buy them. Once we touch base with them online, we invite them to visit our nearest offline store.”
With over 85 per cent of Croma shoppers being Omnichannel customers, it is only obvious that the company launches campaigns across all media with digital playing a key role in the media mix.
Unique Marketing Initiative
Croma says that it offers the same visibility to all other brands which are displayed inside the store.
Ghosal says, “We do not market the brand. The brands market themselves. For us, the store is the best display platform. When a new product is launched, we run a pre-registration campaign on Croma.com. We also make sure to make the product available in the store on the day of launch. That’s one way to market a brand that’s not Croma – like for example the iPhone 7.”