French bridge-to-luxury, lifestyle brand, Lacoste, popular for its polo T-shirts is steadily working its India expansion plans. With premium retail developments coming up at an even pace in India, on an average, Lacoste opens six to eight new stores every year. The brand even launched its highly anticipated online store, www.lacoste.in the year 2016.
Lacoste – known for its strict clean-cut design codes and aesthetic – continues to work towards creating a luxurious shopping environment, allowing the quality of product and design to take centerstage.
The brand currently has 48 PoS in India, including its website, and is present in 18 cities in the country with its physical stores. Most of its stores are company-owned, but franchise stores have started contributing to a decent percentage of sales in recent times.
In an exclusive interview with IMAGES Retail Bureau, Rajesh Jain, MD & CEO, Sports and Leisure Apparel Ltd. (Lacoste Licensee in India) talks about the brand journey in India, the importance of in-store experiences, Lacoste’s India Omnichannel strategy and the challenges of the fashion retail industry as a whole.
Excerpts from the chat…
Tell us about any in-store innovative experiences that Lacoste has introduced for its customers?
We believe in innovation from the word go. The first innovation that we do is on our products. Every six months or so, we launch new products to keep the store looking fresh. Apart from that, as far as technology is concerned, it’s certainly the way forward, the demand of today’s times. We have started a CRM platform which is technology driven. Secondly, we have started using ERPs and PoS systems which are also technology driven. Here, we are also working towards innovation like how to map inventories to try and give our customers the best Omnichannel experience.
How do you as a brand work towards shortening the supply chain in as far as the customer goes?
Our supply chain works wonderfully. We have two methods for supply chain. One is when we launch new products, they are carefully allocated to every PoS that we have. The second supply chain is when we do auto replenishments – there is minimal human intervention here. The moment a product is sold, an automatic trigger is sent to the ‘Mother warehouse’ that this product needs to be replenished in this particular store. The product goes through our logistics partner and reaches that particular store within a day in Delhi-NCR and within 3-5 days beyond the capital city.
Since you’re a bridge-to-luxury, lifestyle clothing brand, what’s your pricing strategy in India?
Lacoste is an accessible luxury brand. By definition we are then accessible in areas where we determine we have a target audience. Our pricing strategy is in sync with the fact that we are a bridge-to-luxury brand and are meant for people who aspire towards living comfortable and well-appointed lifestyles.
Due to this strategy, Lacoste naturally gets most of its customers from Metros and Tier I cities. On the other hand, our online business is booming in Tier II cities as well for those customers who don’t have access to the products offline. As far as Tier II cities are concerned, we plan to explore them through our online channel instead of physically going there. Again, the reason is premium retail development which is currently not present in Tier II cities in an offline model. We reach out to those customers through our e-commerce website and it has proved to be very effective because we get a lot of online consumers.
How do you face competition from brands like Zara and H&M who have come into India with their smart casuals and low prices?
The consumer today is an aspirational consumer. They want good quality products, the promise of a brand. I’m very happy to say that once they experience Lacoste products, a large percentage of them stay with us. We are fortunate to have a large base of repeat customers – they understand the brand and appreciate it.
Also, 90 percent of our customers are registered for Club Lacoste, the CRM program that we run and out of this 90 percent, 50 percent make repeat purchases in our stores. This tells us that our customers love our products. We of course love our customers.
Do you have a specific location strategy? Do you prefer malls or high-streets?
Whether we go in for a high-street or a mall, our locations are chosen very carefully. It has to be a premium environment, even our adjacencies have to be premium. At the same time, we also look at the customer profile in that territory, so that we don’t keep on opening too many doors. We are very selective.
Now, coming to differentiation between malls and high-streets – in India, the weather conditions are not very conducive to relaxed shopping, so we have started opening most stores in malls, keeping consumer comfort in mind. Another reason for opening stores in premium malls is that we are already present in almost all high-streets which are in tune with our brand profile.
What are the challenges – as per you – that the Indian fashion retail industry is facing today?
One of the biggest challenges that we are facing in fashion retail has remained the same for the last decade or so. It is the non-availability of premium retail development at the right cost. The costing – per square meter occupation cost – in India is as high as in any other part of the world, then be it Paris, USA or China. However, the throughput is not the same. This is a big challenge for the fashion retailer.
The second big challenge – which mostly cropped up in the last three years or so – is discounting by online players. This percolated down to traditional retailers who then had to come up with similar discounts to combat the e-commerce threat. This impacts retailers who do not compromise on the quality and positioning of the brand. We hope this will stabilize in the near future, because at the end of the day, heavy discounts don’t make great business for anybody. In my view, it is customer delight that matters. We have to win customers through exceptional service and products and not through discounting.
What is your Omnichannel strategy? What are you doing to woo Millennials?
Omnichannel is a fascinating word, a very nice word – something we would love to do, but honestly speaking, I am yet to come across a good brand which has actually, successfully implemented it in the country. It’s in very nascent stages. If I de-mystify Omnichannel, it very simply means mapping all your inventories – then be it in the warehouse or in any store across the country. Wherever the customer chooses to shop, online or offline, he should be exposed to the entire inventory that a brand has on offer.
Earlier, it was a very common phenomenon that a customer would like a product but not get his size, or colour preference. With Omnichannel, the ability to service a customer – give him doorstep service – from anywhere in the country becomes very easy. We would love to implement Omnichannel as soon as possible and we are working towards it. There are lots of things in the pipeline in as far as Lacoste goes. Let’s see how things pan out.
What are Lacoste India’s expansion plans?
Our strategy is to open six to eight new points of sale every year and we’re well on target every year.