Written By Sagar Malviya, ET Bureau

MUMBAI: SoftBank-funded Grofers is converting dozens of grocery stores into its own branded outlets as the online retail firm looks to broaden its distribution and push own label products to earn better margins. It has changed nearly 100 such kirana and supermarket outlets to Grofers discount stores in the Delhi NCR region where it will manage back-end sourcing, inventory management and technology support on a revenue sharing model.

Source: economictimes

Written By Deepti Chaudhary

Amar Nagaram, head, Myntra-Jabong.

BENGALURU : From battling for the largest product catalogues to the lowest prices, the focus in online retail now seems to be shifting to fastest deliveries, after-sales services such as alterations, and reduction in the number of returns.

A case in point is that of India’s largest online fashion retailer, Myntra, which is set to launch 30 experience centres or kiosks across India by August, where customers can pick the products they ordered when convenient, return merchandise and get alterations done on the spot. Its first such centre in Bengaluru’s Manyata Tech Park, which is home to multinational companies such as Ikea, Philips and Nokia, has seen a reduction of 7% in returns since it was launched as a pilot in December.

“All of this is digitally tracked so we know what happened to the product, how the customer responded to our product delivery. If you take the lens of business view to it, there is an efficiency coming in. We are not doing multiple deliveries because the user was unavailable; our shipments are going to one kiosk and returns are faster,” said Amar Nagaram, head, Myntra-Jabong in an interview.

It is also piloting what it has christened as the “try and buy open box” initiative. While several versions are being tested, Nagaram said under one such initiative, a customer is believed to have ordered three or four products. These products will come in a box for a customer to try them. A delivery agent will later come at a designated time to take away the box and a customer can chose to keep what they liked and return the others.

Industry insiders say fashion is a “touch-and-feel” category unlike books and mobile phones. Hence, it has become critical to provide as many options to customers as possible to make the shopping experience similar to that is offered by physical stores.

“They don’t have a choice. Some products require touch and feel—it’s an intrinsic part of the shopping experience. We cannot digitize everything. Hence, having a physical point is important,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

“In e-commerce, from processing order to delivery to returns, there are costs involved,” he said.

In the meantime, Myntra is looking to enter the US market with both ethnic and western wear offerings. “We are looking at not just ethnic wear but also Western wear. We are strong in this category. There is a product market fit that is being studied right now. And we want to address the segment, through Walmart,” said Nagaram.

In the meantime, acquiring new customers continues to be an area of focus for Myntra. The company believes with its sales event, called the End of Reason Sale, over 550,000 customers will shop on Myntra for the first time.

Source: livemint

Written By Deepti Chaudhary

A retail consultant says Amazon Flex will help the company handle demand peaks and improve service performance (Photo: Aniruddha Chowdhury/Mint)

Bengaluru: Amazon India is set to offer students, homemakers and retired professionals part-time jobs, thus killing two birds with one stone—ensuring faster deliveries during peak season and creating Uber-style flexible jobs.

Fast and reliable delivery is the most important part of the e-commerce business, along with the right product assortment. Over the years, Amazon India has introduced several ways of offering definitive and faster deliveries, including one-day, two-day and scheduled deliveries. Prime offers assured next-day delivery on certain products and Prime Now provides two-hour delivery for groceries.

Now, with Amazon Flex, as the initiative is called, Amazon India expects to create job opportunities for thousands, giving them the chance to make some extra money during their free time.

The person needs to work for four hours a day and can earn ₹120-140 an hour delivering packages. The “part time delivery partner” will be paid every Wednesday.

“While we continue to scale our existing delivery capabilities across the country, Amazon Flex will enable Amazon to continue growing our capacity to serve more customers and speed up deliveries,” said Akhil Saxena, vice-president (Asia Customer Fulfilment) at Amazon. The company ran a pilot for two weeks before launching it in Bengaluru, Mumbai and Delhi, with more cities planned to be included later this year.

India is the seventh country where Amazon has launched Amazon Flex. It has been operational in North America, Germany, Spain, Japan, Singapore and the UK, where it grew delivery capacity and sped up deliveries for customers.

Amazon entered India in 2013 and delivers to over 99.9% PIN codes. Its catalogue offers nearly 170 million products from over 400,000 sellers. Last year, it boosted its infrastructure (fulfilment centres) by 1.5 times in storage volume to more than 20 million cubic feet over that of 2017.

“There is a stickiness that comes with faster, reliable deliveries. It’s not important that it comes in 1-2 hours (barring groceries and medicines),” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight. “The competition here is (with) malls and shops that give instant gratification. Hence, the earlier the product comes, the better it is. It takes away the desire to check out alternatives.”

According to Dutta, Amazon Flex will help the company handle demand peaks and improve service performance. “In retail, particularly during peak seasons, brands hire part-time workers as there are more transactions and footfalls. Amazon India is doing the same, it’s not seasonal, though. There are days in a week when deliveries are high, which can stress the current network of an e-tailer.”

Since 2013, Amazon has invested nearly $5 billion in India, mostly on innovation, infrastructure and technology.

Source: livemint

To turn around the loss-making Godrej enterprise, its new owners, Spencer’s Retail, have to get their strategy and execution right

Written By SALIL PANCHAL

Though Nature’s Basket grew from a single food store in 2005 to 35 stores in Mumbai, Pune and Bengaluru, it never made a profit in 14 years of operation Image: Ramesh Sharma / India Today Group / Getty Images

Nature’s Basket: Goenka’s New Hot Potato To turn around the loss-making Godrej enterprise, its new owners, Spencer’s Retail, have to get their strategy and execution right

Shashwat Goenka, the scion of the RP-Sanjiv Goenka Group, faces possibly the toughest challenge of his career. Six years after taking charge of the business of family-led premium(ish) multi-format retailer Spencer’s Retail, which he heads, he turned it profitable in FY2019. He will now need to turn on the magic, once again, for the loss-making—and once rival—gourmet retail chain Nature’s Basket, which Spencer’s bought out from Godrej Industries.

Spencer’s Retail, following shareholders’ approval, is to buy Nature’s Basket in an all-cash ₹300 crore deal, announced in May. Nature’s Basket, which redesigned its stores in 2017-18, houses products such as Spanish Toast Ham, Parmigiano Reggiano cheese, Olea Europaea’s sun-dried tomatoes and imported wines.

But the gourmet retail foods business, where Nature’s Basket competes with Future Group’s Foodhall and also grocery delivery service Big Basket, is an extremely difficult segment to operate in, characterised by high costs, long inventories, niche consumer tastes, and high real estate rentals.

What then can Goenka do differently from Godrej? Firstly, it is the intent. Though Nature’s Basket grew from a single food store in 2005 to 35 stores in Mumbai, Pune and Bengaluru, it never made a profit in 14 years of operation. In FY18 it reported a net loss of ₹62.24 crore, down from ₹95.37 crore in FY17. FY19 revenues were at ₹338.38 crore.

Nature’s Basket never became a strategic or core part of the Godrej group portfolio. “It suffered from lack of scale and lack of positive cash flow,” says Devangshu Dutta, CEO of retail consultancy firm Third Eyesight.

Announced in 2016, GNB [Godrej Nature’s Basket] Refresh 2020 strategy targeted ₹1,000 crore revenues by 2020; omni-channel expansion in the medium term and a deeper presence in southern and western India. Not much of these was achieved.

Tanya Dubash, executive director and chief brand officer, Godrej Group said in a press release announcing the sale, “Looking forward, we realised that to further unlock the immense potential of this brand and to grow it to even greater heights, we need to pass on the torch to owners who have prioritised retail in their portfolio strategy and have the relevant ecosystems to take the business to the next level.”

Nature’s Basket’s CEO Avani Davda said she was travelling and declined to speak about the sale to Spencer’s.

NO DILUTION OR RE-BRANDING
“We wanted to expand our footprint inorganically. Nature’s Basket has a strong base in western India, which we don’t. Both the brands are aspirational compared to Big Basket and cater to high-end customers,” says Goenka.

There are no plans to dilute, dissolve or re-brand Nature’s Basket, Goenka adds. “It [Nature’s Basket] is a very strong brand. As I continue to understand this business fully, I will explore whether we can have more stores and expand to those places where required.” He says he will evaluate which markets are expanding, and which of its stores are breaking even. But analysts say some stores could turn unviable and shut, or be converted into Spencer’s stores.

Goenka will also need to rethink a few issues for Nature’s Basket:

Rethink NCR: Nature’s Basket exited the NCR—considered a key market for premium gourmet foods—by 2017, where at one time it had eight stores. High rent and operating costs and logistical issues could have led to these exits. Goenka cannot afford to ignore the region. Spencer’s already has over 10 hyper stores and neighbourhood stores in this region. “NCR cannot be missing from Nature’s Basket’s map; it is a vital growth market, alongside Mumbai,” says Abneesh Roy, senior vice president (institutional equities), Edelweiss Securities. Spencer predicts that retail spending in the NCR will grow at 12.5 percent CAGR between FY17 and FY21.

Cross-selling: Goenka will be banking on cross-selling products and private labels to boost revenues for both brands. Nature’s Basket has Healthy Alternatives, L’exclusif, and Natures, while Spencer’s has Smart Choice and Tasty Wonders in the foods category, and 2Bme, Care & Esentialz, Clean Home, Maroon in non-foods; 63 percent of its revenues come from foods. Spencer’s Retail became profitable (it reported a consolidated net profit of ₹7.94 crore for the full year in FY19) as Goenka focussed on improving margins and cross-selling in specific categories. The company, which was listed in 2018, is now debt free, and has taken a cautious approach to opening new stores.

Investing more: Goenka will need to consider pumping more money into the loss-making venture. Godrej Industries was in a phase to control Nature’s Basket’s losses and cut marketing, technology and system imperative costs. These, and other costs, could resurface for Goenka. Godrej Industries’ investment at cost in Nature’s Basket was ₹200 crore.

Online strategy: Another need would be to create a new, robust online strategy for Nature’s Basket and Spencer’s Retail to boost earnings. There is scope to expand stores across geographies and even raise the topline for Nature’s Basket. But, as seen with seasoned retailers such as DMart, Spencer’s Retail will need to maintain the Nature’s Basket—or even their own—brands, understand customer choices and requirements.

Turning this venture profitable is a distance away, at least 3 to 5 years away, experts say. With execution being be critical, will Spencer’s rediscover its mojo?

Source: forbesindia

Written By Varuni Khosla, ET Bureau

The seven-year-old specialised online beauty retail venture has added fashion to their forte.

Source: economictimes