Private labels drive Lifestyle’s digital push
Themulti-brandretailerlookstobolsteritsomnichannelcredentialsasitgets moreaggressivewiththebrand’sdigitalpresence
With the growing dominance of online players in the business of fashion, multi-brand retailer, Lifestyle, is sharpening the focus on its apparel and footwear private labels and shoring up its online stores while pushing up digital branding and advertising spends. With well stocked digital storefronts, over 30 per cent of its advertising budget set aside for online and increased attention on homegrown labels, the retail brand expects to hold its ground against the relatively newly minted e-commerce players and single-brand stores. However, carving out a unique identity in a discounted and fickle marketplace is an uphill climb for multi brand stores and they have to find new ways of staying relevant every day, say experts.
“We are focusing extensively on our private label brands. We have endorsements and digital activation to support these brands,” Srinivasa Rao, senior vice president, marketing, Lifestyle said. The company has exclusive rights over four international brands and six private labels at present. The focus is on Ginger, Melange, Kappa and Forca brands added Rao. However he made it clear that the focus on private labels is not at the expense of the global and Indian brands it stocks. Nor does its digital thrust signal moving away from the brick-and-mortar experience.
At present around 70 per cent of the space in a store is reserved for other brands, private labels get the rest. Their share will go up in the coming months, but the company is quick to point out that there is no change in the business model. All efforts are geared towards making Brand Lifestyle accessible and appealing to young and millennial shoppers in the metros and outside; to that end the retailer says it is pursuing a more aggressive digital marketing strategy and an omnichannel existence.
According to a recent report on digital spending by BCG- Google, digital transactions in India could triple from around $40 billion to $100 billion by 2020. “Online users will also accordingly grow 2-3x across sectors; significant part of new users will come from non-tier-1 cities, women and older consumers,” the report said.
For stores such as Lifestyle, these numbers are compelling. Owned by the Dubai-based Landmark Group, Lifestyle says that its branding activities have had more of a digital skew in the last 18 months and the trend will continue in the months to come. At the same time, it is also stocking its online stores with a wider assortment of fashion and lifestyle products, a category that has seen significant response from online shoppers.
There are 70 Lifestyle outlets across the country at present and plans are to expand to around 84 stores by the end of this year. Over the last two years, it added 8-10 stores a year, and this year it is expecting to open 12-14 stores. Lifestyle stores are large format and usually located inside malls, the average store size is around 40,000-42,000 square feet. Can large format stores survive, given the hike in property rates and the growing digital influence on the sector?
Given the vast portfolio of brands that Lifestyle is home to, there is not really a choice when it comes to store sizes. stronger brand for the store “We have around 250 brands and for the private labels. across apparel, watches, fragrance, “Combining digital, currently shoes, beauty products, we spend between 2.5-3.5 per footwear, handbags and cent of sales for branding. accessories for women, men Before we launched our digital and kids at affordable prices. store, only about five per cent We pick the merchandise that of total advertising budgets we believe is good for our customers,” went to digital. Currently said Rao. almost 30 per cent goes to digital
Despite the and we see that costs and digital going up,” said Rao. dominators, Rao Lifestyle’s believes that multibrand, growth in spends affordable on digital advertising retail store brands is in line with have a chance. The industry trends. key, he says, is to Digital advertising keep products and is expected to continue brands that are relevant SRINIVASA RAO at a CAGR and accessible Senior VP-Marketing, (compound annual to buyers across Lifestyle growth rate) of 30 budgets. The target per cent to touch audience is the young consumer, ~12,046 crore by December he added, and the 2018, according to latest findings stores and the digital marketing of the ‘Digital Advertising initiatives are being in India 2017’ report, jointly designed to appeal to this segment. published by the Internet and And in terms of the Mobile Association of India stocking policy, the focus is on (IAMAI) and Kantar IMRB. value for money rather than According to the report, digital luxury products. advertising spend is about 16
At present the sales from its per cent of total advertising digital channels is around 1.5-2 spends in the country. per cent of its offline sales and The store is also going all Rao said that the numbers are out to create a uniform experience set to grow hereon. In the next between its online and three to four years Lifestyle targets offline platforms. The aim is to 10 per cent of total sales create an endless aisle where will come from online stores— buyers can select their purchases its own as well as other marketplaces. online, step into a store For this, the company for a knows purchase it has and to vice build versa. a
“We are focusing extensively on our private label brands. We have endorsements and digital activation to support these brands”