Established in 1905, Nilgiris is one of the pioneers of organised retail in India and a heritage brand with a storied legacy of delivering quality customer service. Operating under the banner of Future Group, Nilgiris spawns 215 F&G outlets across Tamil Nadu, Karnataka and Kerala with a total retail area spanning 4.45 lakh sq.ft. The supermarket chain is positioned as a neighborhood store that guarantees assortment, range and freshness.
“Nilgiris operates on the foundation of personal connect that translates into quality service and continues to build on its product range in order to respond to its customer’s evolving needs,” says CEO Venkateshwar Kumar in a chat with Progressive Grocer during which he outlines his plans to propel future growth of Nilgiris by going for a more contemporary look, by building on its existing infrastructure and with the help of more updated technology.
Describe your personal journey as a retailer. How has it translated into the monumental success of Nilgiris’ retail operation?
I started my retail journey with the Future Group in 2005 and I operate on the group’s core belief that retail is our religion, stores are our temples and customers are no less than God. This philosophy has helped me spearhead Future Group’s operations in South India through an aggressive expansion initiative that encompasses all states and population strata in the southern region. While I was heading the large-format hypermarket Big Bazaar in the initial phase of my retail career, I have expanded into Future Group’s FBB (fashion format) and supermarket business through the Nilgiris brand over the past few years. While retail is my passion and has been a significant part of my career, I began my professional journey in FMCG after completing my MBA from T.A. Pai Management Institute (Manipal) in 1991. After a 12-year successful stint of working with various national and multinational FMCG and tele-com companies, I ventured into retail. As Head of the South Zone at Future Group, I am now overseeing 70 hypermarkets, 15 FBB stores and more than 200 Nilgiris supermarkets with over 5,000 employees, and am on a single-minded mission to delight millions of customers walking through the aisles of Future Group retail stores.
What are Niligiris’ marked differentiators that set it apart from other F&B retail players?
Nilgiris, a heritage brand that is one of the pioneers in organized retail in India, epitomizes excellence in ethical and professional practices. Established in 1905, this national brand firmly rests on a strong foundation of core Indian values that translate into quality customer service through personal connect and experience. Nilgiris’ loyal customers over the generations have returned to this store solely because of the great quality and freshness that the brand promises and delivers consistently. Its customer-friendly practices that are reflected in its overall operations make Nilgiris a hallmark for retail excellence. The relentless effort to provide our customers with “whatever, whenever” through a catchment-curated assortment is another feather in our cap. We are also proud of our high productive stores and their unstinted commitment to deliver on our service promise.
How is Nilgiris positioned in the domain of F&G retail and what is the customer proposition offered?
The customer proposition of the Nilgiris store is reflected in the voice of its customer that says: “I get everything I want every time and I know it will be fresh.” Therefore, the supermarket chain is positioned as a neighborhood store which guarantees assortment, range and freshness.
What are the major categories and range of merchandise you specialize in as a retailer?
Nilgiris stores offer a wide range of products to customers ranging from a regional, local and international variety in grocery and food segments. Our customers find a distinct variety of products like powdered flax seeds, ajinomoto, fresh yeast, palm jaggery, hill garlic, aapam mix, ragi dosa mix, frozen foods and many international food products, all under one roof. With new and emerging categories in the food, home and personal care segment, the store continues to build on its product range in order to respond to its customers’ evolving needs.
Tell us about the new and emerging categories in your stores. How do you see their market potential growing?
The emerging categories in our stores are predominantly in the ready-to-eat and ready-to-cook segments. Our customers are gradually transiting from slow to instant cooking and we are reaching out with some innovative products, which will be valued immensely for simplifying meal preparations while still being delicious. Millets, dairy beverages, value-added dry fruits and health foods are also showing disproportionate off -take trends off late. Over the past years, we have seen a rise in the awareness and aspirations of customers who are now willing to spend on healthier options and try newer food products and preparations. For instance, dry fruits is no longer regarded as a luxury snack and has occupied a more meaningful place in a consumer’s daily eating habits. A lot of people are now switching to healthier grains and new spices. Nilgiris stores cater to these evolving trends by selling items that now define ‘Centre of Plate’ for modern India.
What is the typical customer profile of shoppers that frequent your stores?
A quintessential Nilgiris customer is someone who strongly opts for quality, range and freshness over value and discounts. Customers who yearn for a convenient shopping experience with a sense of personal touch return to this store. Shoppers from SEC B, B+ and above shop at Nilgiris stores and belong to all age groups.
While targeting newer markets, which store locations do you prefer and why?
Traditionally, we have looked at catchments and locations with a high affluence index, besides looking into locations like apartments, clubs, offices and high streets. However, our current strategy is to be present in every pin code of south India and also in metro stations. In addition to this, we are training our staff to be more intuitive in their communication with their customers so that they are able to engage with them at an emotional level and understand what their needs are. This will empower them to serve the store’s customers in a more meaningful way.
What interesting concepts or strategies have you incorporated into your business model to especially attract the young generation – the millennial shopper?
We are working towards attracting Millennial customers on multiple fronts. Nilgiris is active on new-age media and is constantly engaging with the youth through spearheading campaigns during World Milk Day, Valentine’s Day and other youth centric events. Simultaneously, we are introducing several modern-day products like cold coffee, greek yogurt, flavoured milk, almond shots etc. Our emphasis has been on engaging and attracting the young generation. Our stores are also undergoing a face-lift and will sport a more contemporary look.
Which brands are most popular across various categories?
The best sellers in our stores are our own private label brands, with more than 40 percent of the sales coming in from Nilgiris and Golden Harvest brands. Our own in-house dairy, staples and bakery categories make for substantial contributors too.
What is your private label strategy? Which categories do you service with your brands?
Our core strength lies in our home-brands in the dairy, bakery and staples category. The loyalty for our stores, over the years, has been built through the Nilgiris range of products. While 60 percent of our business relies on food products, a substantial chunk of more than 40 percent comes from the Nilgiris brand alone. Therefore, our strategy continues to revolve around strengthening our own brands. Our recent launches include products like flavoured milk, which come in six unique flavours, cold coffee, butter milk, laasi, Indian cookies and bar cakes. Adding to the existing Nilgiris portfolio, Future Consumer brands like Tasty Treat Namkeens, Poof, Sanghi’s kitchen, Mingles, etc., further strengthen our brand’s own portfolio and cut across every category in the store.
What marketing and promotional activities do you employ in order to connect with your target customers?
The brand’s efforts to ensure better customer engagement focus on creating a human connect with its customers, especially during special occasions, through its own “made, not manufactured” products, unlike the run-of-the-mill product discount strategies used by the regular retailers. The brand’s communication through media channels and advertisements revolves around re-establishing a stronger connect between the community and our high-quality home-brand products. A good example would be our Christmas campaign that reads “A Christmas isn’t Christmas without Nilgiris”. The jingle aptly captured the festive mood while it celebrated the range of delicious Niligris cakes. Similarly, for Pongal and Sankranti celebrations, the store sets the right mood to encourage customers to make their seasonal purchases. Its range of dairy and confectionery items take centre stage during campaigns like World Milk Day, Yoga Day, Valentine’s Day, and Women’s Day. In fact, Nilgiris becomes the preferred destination during Diwali and Dussehra season for its food gifting options like Nilgiris soan papdi, gulab jamoon, Mysore pack, etc. We offer an integrated mix of gifting items on festive occasions and ensure consumer sentiment is catered to and looked after.
Describe the mix-and-match bundling and cross-promotional activities conducted within your stores.
Stepping beyond the commonly-followed philosophy in modern retail – of 20 percent SKU contributing to 80 percent business – Nilgiris believes in fulfilling every need of its customer at all times through its extensive range, variety and ‘whenever, whatever’ attitude. In fact, the emphasis has never been on promotions alone but on delivering quantity and quality. However, cross promotions and certain bundling offers are run across stores during special occasions and festivities to promote gift-hampers and new products from categories like dairy, bakery and staples. The sincerest testimonial for the brand’s efforts is when shoppers, while leaving the store after shopping, announce: “We’ve got everything we wanted!” That is of greatest satisfaction.
How do you utilize product demonstration and sampling tools to showcase your product ranges across different categories?
Sampling and demo initiatives are great differentiating tools that allow us to create better customer engagement in our stores and build long-term credibility and loyalty too. Our stores follow a rigorous sampling calendar helping shoppers discover new products and food trends. Our sampling involves wet as well as dry sampling, depending upon infrastructure at stores. However, creative efforts beyond direct sampling and tasting are concurrently made in order to reach out to a much bigger customer group. Cross bundling across categories is a powerful way of earning the customer’s attention, where items like wafer-biscuits and snacking items, etc. can be given off as a freebee or a ‘trial pack’ with another snacking item. We also rely on our extensive membership database to reach out to target customers with the right offers, samples and freebies.
What initiatives have been adopted to strengthen your supply chain – back-end and front-end?
Building on our existing infrastructure and updated technology, new distribution centres have been planned in Kochi, Hubli, Salem, Trichy and across south India to strengthen our replenishment process across the country.