admin
April 10, 2013
Raghavendra
Kamath, Business Standard
April
10, 2013
The
newly opened 23,000-square-feet-standalone flagship store of UK’s
department store chain Marks & Spencer (M&S) at Koramangala
in Bangalore has a different look from the existing stores of
the chain in the city.
Each of the eight brands of the British retailer are clearly segmented and displayed using props and visual merchandising. For instance, its brand ‘Limited Collection’ has been given a fashion-focused feel with an illuminated catwalk, while women’s casual-wear brand ‘Indigo Collection’ has been displayed with trestle tables and denim mannequins. Another women’s wear brand ‘per una’ is presented with white-washed wooden wardrobes and chandeliers.
"The new format is a part of our global strategy of upgraded stores. Sub-brands have been relaunched with clearer differentiation so that navigation becomes easier," says Venu Nair, managing director, Marks & Spencer Reliance India.
In fact, the £600 million-revamp, involving 800 stores, started in its home market UK in September 2011 after a study that reflected the difficulty faced by customers in moving around in the stores.
M&S, which has a 51:49 joint venture with Mukesh Ambani’s Reliance Retail, has opened half-a-dozen new format stores like the one in Bangalore with an average size of 20,000 sq ft to 23,000 sq ft. The chain wants to open five more in the next couple of months. Currently, it has 29 stores.
Consultants say the government allowing foreign direct investment (FDI) in multi brand retail has partly played a role in M&S focusing on sub-brands.
"Earlier, under the single brand regime, the rule was that besides having your brand name on the store, every product should have the brand name of the company. With FDI allowed, it would be easier for foreign retailers to launch sub-brands here," says Devangshu Dutta, chief executive, Third Eyesight, a retail consultant.
However, M&S’s Nair says it wants customers to have the same store experience as they would have seen in its stores in international destinations.
But, will this strategy work?
Dutta says sub-brands help target more specific segments (by age, gender, usage occasion etc.), if they are handled well. "This can help fine tune not just product needs, but also create specific or limited promotions without it being carried over to other parts of the store or other sub-brands," he adds.
Even home grown fashion retailers such as Shoppers Stop, Future Group are focusing on their sub-brands to drive sales. For instance, Shoppers Stop has run specific activations around its apparel brand Haute Curry and extended that to jewellery and footwear. But that can’t be strictly compared with M&S, as unlike them, M&S only sells brands that are owned by it.
Such revamps are crucial for established brands such as M&S given that the Indian fashion scene is changing fast with the entry of fast fashion brands such as Zara and Mango, and the expected foray of fashion brands such as H&M, Uniqlo and others.
For M&S, the revamp is the second such major experiment in its 12-odd year presence in India. In 2007, it cut prices of its merchandise by 35 per cent to reposition itself as a mid-market retailer. It also introduced more lines as customers perceived its prices to be too high and designs limited and not suitable for Indian context
While its rivals say M&S was stuck between premium department stores such as Shoppers Stop and mass market retailer such as Big Bazaar, executives at M&S Reliance say that the strategy was well thought out. "If you are a premium retailer, and have prices more than Rs 3,000 apiece, the volumes are going to be low. We thought it is better to be a mid-market player here," an executive adds.
M&S has also increased sourcing from India and south Asia significantly. It sources around 61 per cent of its merchandise from the region which helped it to offer lower prices here.
Marks & Spencer Reliance made losses of Rs 18.66 crore and Rs 9.13 crore in FY 2010, FY 2011 respectively, and the company is still making losses. But same-store sales growth is good at all stores. Nair says many of the chain’s categories are doing very well. For instance, men’swear sales jumped 31 per cent during the December quarter and lingerie went up 28 per cent.
While the chain is reportedly set to bring its food section here, its peers and ad consultants say this could be challenging given that food is normally associated with hypermarkets.
(With inputs from Sounak Mitra)
