'Our lifestyle retailing has amazing price points' – VP, Spencer's

11 Apr '09

9 min read

“However, with the standalone stores, the approach towards creating awareness and subsequent trial would require focused and aggressive brand-building initiatives. We have a robust marketing outlay for the brand and hope to make a success out of the standalone stores”, he explained and speaking about the expansion plans, he added, “For this fiscal, we are concentrating only on Delhi–NCR”.

To another question as to what potential he foresees for retail industry in India in the current times, when consumer sentiments are at the lowest point, he elaborated by saying, “Indian retail industry is on a robust growth path and is witnessing a confluence of several favorable factors such as steady economic growth, favorable demographics, investments in infrastructure creation, and supply of real estate and malls”.

He continued, “This, coupled with low penetration (since organized retail is just about 4–5 % of total retail market in India), creates a base for the next big leap of growth for the organized retailing industry. However, in order to be successful, organized retailers in India will need far more than prime locations and competitive prices in order to succeed, in what is shaping up to be a fast growing but extremely competitive retail market”.

In the same vein he said, “Retailers have the opportunity to develop a competitive advantage by gaining a deep understanding of their customers using robust data analytics. Organized retailers need to build their data collection, storage, and analysis capabilities if they hope to win in the burgeoning Indian market. They should leverage data-driven analytics to acquire new customers, build loyal long-term customers, and maximize customer value”.

Encouraging him to speak about Spencer's targeted growth of 25 percent, we asked him as to what determinants he envisages in helping the company achieve them in the current fiscal despite the slowdown, to which he replied by saying, “Growing by 25 per cent during this downturn is an achievement, considering consumer discretionary spends are down by 20-25 per cent. Our strategy of 'not investing ahead of the curve' during the earlier boom period is now paying off”.

Explaining further he said, “The additional retail space (we are planning to add 400 more stores over the next two years) would give us enough leverage to target a turnover of approximately Rs 15 billion in the next fiscal, irrespective of how the economy turns out to be and we plan to manage our profitability in three ways - by managing inventories better, rationalizing rentals, product assembly and boosting people productivity”.

Continuing he said, “We are investing in improving processes and corporate governance. We are leveraging the benefits of technology to ensure a shelf-centric supply chain process so that inventories are managed better and stores don't suffer from stock-outs. In retail, consumers buy what they see hence, ensuring that the products are available at the right place, right time and in the right quantity is crucial for successful conversion.

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