Shoppers Stop junks 'one-size-fits-all' strategy; readies new plan to boost growth

The store segmentation approach that Shoppers Stop is taking is intended to improve its hit rate at a time when local and international fashion retailers are crowding the market with new merchandise across price points.

Shoppers Stop, the country’s oldest department chain, has launched two more store formats, even as it taps well-heeled consumers with luxury outlets.

The two new stores are aimed at the mid-market and economy retail segments, allowing the three-decade-old chain to play across the price pyramid.

The luxury stores, for instance, will sit at the top and will be located in affluent areas of a city.

The second retail format will target middle-class localities within a city while the third format will eye consumers on the outskirts of a city.

The Delhi-NCR is the first place where Shoppers Stop is test-marketing this three-tier retail structure.

The company has launched its store for mid-priced apparel and non-apparel brands in Vasant Kunj, New Delhi.

A separate store carrying an affordable range has been unveiled at Gaur City, Noida.

The luxury store from Shoppers Stop was launched last month at Golf Course Road, Gurugram.

The retailer will take a similar approach in Mumbai and some other top metros, Rajiv Suri, managing director and chief executive officer, Shoppers Stop, said.

“The strategy of one-size-fits-all for store launches will not work with affluence levels varying across different parts of a city,” he said, adding, “The profile of the customer in the surrounding area of a store will have to reflect in the product mix and ambience. We are keeping this in mind when setting up our outlets.”

Typically, the average selling price of products in a Shopper Stop luxury store will be nothing less than Rs 4,000-5,000 per unit, depending on the category.

High-end labels such as Michael Kors, Kate Spade, and Coach in handbags, Jo Malone and Tom Ford in beauty and Armani Exchange and Jones New York in apparels will be available here, Suri said.

The store targeted at the mid-market segment would have an average selling price of Rs 1,600-2,000 per unit, with some of Shoppers Stop’s private brands available at these locations.

The entry-level stores will see products priced below Rs 1,000 per unit.

In some categories, the average selling price (for affordable products) could vary between Rs 1,300 and Rs 1,500 per unit.

Shoppers Stop has also hired two separate design companies to work on its store formats.

The luxury stores, for instance, have been designed by the London-based company Dalziel and Pow.

The mid-priced and economy range stores have been conceptualised by the Dusseldorf-based design firm Schwitzke.

According to experts, the store segmentation approach that Shoppers Stop is taking is intended to improve its hit rate at a time when local and international fashion retailers are crowding the market with new merchandise across price points.

In the past two months, global brands such as Uniqlo have entered India, joining the likes of H&M, Zara and Marks and Spencer.

Local majors such as Reliance Retail, which has a tie-up with Marks and Spencer and other international labels, as well as Trent (which has a joint venture with Zara), Aditya Birla Fashion and Retail (runs Pantaloons chain) and Future group (Central and Brand Factory) are all getting aggressive.

Suri said the three-tier retail model was devised after studying the fashion and lifestyle market carefully.

“The domestic retail market is evolving fast,” he said.

“The premium consumer is travelling across the world and wants the best-in-class product.

"The middle-class consumer, on the other hand, is aspirational. We have to ensure that we give each what they want,” he said.

Shoppers Stop’s luxury store in Gurugram, for instance, houses a Starbucks outlet, a Hamley’s toy store, a Crossword book store and an exclusive section for beauty products.

This is in addition to apparels and accessories for men, women and children.

However, the mid-priced and economy formats will be devoid of these trappings, said Suri, with the emphasis on enriching the value of a purchase for the consumer.