Pep­per­fry to Dou­ble Off­line Stu­dios by 2019

The com­pany’s off­line stores, Stu­dio Pep­per­fry, have emerged as key touch­points for con­sumer en­gage­ment. The in­crease in pop­u­lar­ity led the com­pany to adopt a fran­chise model in 2017 with an aim to ex­pand its reach in line with its strat­egy to build the l

Images Retail - - CONTENTS - – By Charu Lamba

Pep­per­fry, the brain­child of Am­ba­reesh Murty and Ashish Shah, is aim­ing to be the coun­try’s largest Om­nichan­nel fur­ni­ture re­tailer. In 2014, the brand pi­o­neered the Om­nichan­nel home and fur­ni­ture business by es­tab­lish­ing its first Stu­dio in Mum­bai. Cur­rently, with its large prod­uct port­fo­lio and the largest big-box sup­ply chain, the brand caters to 500+ cities across In­dia. Stu­dio Pep­per­fry are one-of-its-kind con­cept stores that show­case a cu­rated range of fur­ni­ture from its on­line port­fo­lio and serve as a de­sign inspiration. Here, one can ex­pe­ri­ence cut­ting-edge de­sign fur­ni­ture, look at di­verse wood fin­ishes used by the brand, while getting an idea of the over­all fur­ni­ture qual­ity. In­te­rior de­sign con­sul­tants as­sist in brows­ing the en­tire range and also of­fer free in-store de­sign con­sul­tancy that are both as­pi­ra­tional and re­flect the lat­est and best in home de­sign trends.

Ac­cord­ing to Hus­saine Kesury, Chief Cat­e­gory Of­fi­cer, Pep­per­fry, “Cur­rently, we have 32 Stu­dios (owned and fran­chise) across 16 cities and aim to raise this num­ber to 70 by April 2019. The aver­age size of our stu­dios ranges from 2,500 to 3,000 sq. ft., which is typ­i­cally 1/10th of a nor­mal off­line fur­ni­ture store.”

“We don’t sell prod­ucts from the Stu­dio be­cause the idea is to show­case the large va­ri­ety of – more than 1,00,000 – prod­ucts from our on­line cat­a­logue to cus­tomers. The Stu­dio helps in build­ing our spe­cial­ist cre­den­tials with cus­tomers through rel­e­vant and spe­cific ad­vi­sory, while driv­ing our Chan­nel Part­ner Pro­grams, in­volv­ing ar­chi­tects and de­sign­ers. This in turn helps us ben­e­fit from net­work ef­fects, while not hav­ing to deal with the is­sues that con­ven­tional re­tail busi­nesses face

like high in­ven­tory and high re­lated capex,” he adds.

Since th­ese Stu­dios have emerged as key touch­points for con­sumer en­gage­ment the brand adopted the fran­chise model in 2017 to ex­pand its reach in line with its strat­egy to build the largest Om­nichan­nel net­work in the coun­try.

“Cus­tomers who visit our Stu­dios have a 150 per­cent higher aver­age or­der value and buy 80 per­cent more times on Pep­per­fry. To en­hance cus­tomer ex­pe­ri­ence fur­ther, we have plans to in­tro­duce highly en­gag­ing VR ex­pe­ri­ences in the next few months,” adds Kesury. Oper­at­ing Model

The com­pany’s fran­chise model is an op­por­tu­nity for the brand to ex­pand its reach by align­ing with en­trepreneurs across In­dia.

“Our fran­chise model of­fers the ad­van­tages of low capex and zero in­ven­tory in­vest­ments and fo­cuses the en­er­gies of the fran­chisee en­trepreneurs to­wards mar­ket ex­pan­sion. It’s a win-win for all in­volved,” says Kesury.

“The Stu­dios turn prof­itable in about 10-12 months’ time, de­pend­ing on the lo­ca­tion, size and mar­ket rentals. Those lo­cated on high streets and in prime spots typ­i­cally turn prof­itable ear­lier (in 8-12 months) while lo­ca­tions in malls and air­ports typ­i­cally take 12-14 months. A happy con­se­quence of our Om­nichan­nel ap­proach is that all Stu­dios are mar­ket­ing bea­cons that even­tu­ally pay for them­selves,” he ex­plains.

A point to note is that on­line drives net­work ef­fect for Pep­per­fry and pro­vides the brand with the abil­ity to achieve cen­tralised dis­tri­bu­tion with an as­set­light model at scale. It also low­ers cus­tomer ac­qui­si­tion costs. Cour­tesy th­ese ben­e­fits, the brand’s on­line business has grown faster than oth­ers.

“The com­bined ef­fect of all th­ese ap­proaches is that we ex­pand reach, gain from net­work ef­fects, and ben­e­fit from part­ner­ing with the en­tre­pre­neur­ial ecosys­tem while con­tin­u­ing to lever­age the ben­e­fits of a low-cost on­line business,” says Kesury, adding that Pep­per­fry has grown 116 per­cent CAGR over the last four years.

The com­pany presently caters to 500+ cities across In­dia with an aim to dou­ble its foot­print by en­ter­ing Tier III and IV mar­kets.

Man­ag­ing Dif­fer­ent Cat­e­gories

Pep­per­fry of­fers a highly dif­fer­en­ti­ated port­fo­lio of more than 1.2 lakh prod­ucts across cat­e­gories like fur­ni­ture, home dé­cor, lamps and light­ing, fur­nish­ing, kitchen and din­ing, house­keep­ing, and hard­ware and elec­tri­cals.

In the fur­ni­ture seg­ment, bed, coffee ta­ble and shoe racks are a pop­u­lar choice and in the non-fur­ni­ture seg­ment, lamps and light­ing is the largest cat­e­gory fol­lowed by mat­tresses, din­ing and bak­ing, and hard­ware and elec­tri­cals. The aver­age ticket size for fur­ni­ture is be­tween ₹17,000 - ₹20,000 and for other home prod­ucts, it is ₹4,000.

The brand’s fur­ni­ture sales cur­rently con­trib­utes 80 per­cent of the to­tal rev­enue while the dé­cor and util­ity business con­trib­utes about 20 per­cent of the sale and 70 per­cent of the trans­ac­tions.

“We work with more than 200 fur­ni­ture mer­chants and 10,000 mer­chants over­all across var­i­ous sourc­ing hubs. Hav­ing recog­nised the var­ied re­quire­ments and de­sign needs of our cus­tomers, we have es­tab­lished 10 house brands that cater to a wide range of style spec­i­fi­ca­tions of con­sumers. We are aim­ing to in­vest be­hind ex­pand­ing our house brands thereby in turn ex­pand­ing our prod­uct port­fo­lio,” says Kesury.

En­hanc­ing Cus­tomer Ex­pe­ri­ence

Ac­cord­ing to Kesury,

“We be­lieve that AR/ VR tech­nol­ogy is a game changer in the on­line fur­ni­ture seg­ment. Cus­tomers shop­ping on­line face is­sues like how the prod­uct will look or fit in their space, both phys­i­cally and aes­thet­i­cally. We ad­dress this spe­cific cus­tomer need through an en­hanced Aug­mented Re­al­ity fea­ture on our app, which al­lows them to zoom into prod­ucts, drag and place them against their room setup, or their walls giv­ing them a choice to eas­ily mix and match the prod­ucts with their home in­te­ri­ors. With high def­i­ni­tion im­agery, clut­ter­free lay­out and user-friendly op­tions, the fea­ture sim­pli­fies the process of buy­ing fur­ni­ture on­line.”

The brand is cur­rently fo­cus­ing on de­vel­op­ing in­no­va­tive and cut­tingedge tech­nol­ogy, which will pro­vide the best in class on­line fur­ni­ture shop­ping ex­pe­ri­ence to the cus­tomers.

To add to the over­all con­sumer ex­pe­ri­ence, Pep­per­fry, through its own last mile de­liv­ery, en­sures prod­ucts reach a cus­tomer’s doorstep dam­age-free. It also pro­vides free assem­bly for fur­ther convenience.

Ex­pan­sion Plans

Pep­per­fry has set out a mis­sion to be in 20 mil­lion beau­ti­ful homes by 2020 and hence is build­ing mul­ti­ple en­gage­ment touch-points for con­sumers.

“We will ex­tend our Stu­dio cov­er­age into Tier II and III towns, and in keep­ing with Pep­per­fry’s sharp fo­cus on cus­tomer ex­pe­ri­ence, sig­nif­i­cant in­vest­ments will be made in ar­eas like sup­ply chain au­toma­tion and ex­pand­ing the big box lo­gis­tics net­work to 1,000+ cities,” says Kesury.

Some of the new cities the brand is look­ing to en­ter through its off­line net­work in­clude Lucknow, Silig­uri, Hubli, Vizag, Im­phal, Mysore, Coim­bat­ore, Vi­jayawada, Nag­pur, Guwa­hati and Jaipur. The in­vest­ments in Stu­dios vary de­pend­ing on the lo­ca­tion, size of the Stu­dio and mar­ket rentals.

“The aver­age ini­tial in­vest­ment made on each Stu­dio is be­tween ₹40 to 60 lakhs, with Stu­dios con­tribut­ing 20 per­cent to the over­all business. Our top 15 cities ac­count for al­most 90 per­cent of our business and our eight met­ros con­trib­ute to al­most 80 per­cent of the business,” says Kesury.

The brand is grow­ing at a CAGR of 83 per­cent cour­tesy

a ro­bust fi­nan­cial ar­chi­tec­ture and the ef­fi­cient business pro­cesses de­ployed dur­ing the last 6.5 years.

“We make 45 per­cent gross mar­gin and are al­ready prof­itable at the pre-mar­ket­ing level with the goal of turn­ing prof­itable in the next 12-18 months,” con­cludes Kesury.

In­house Brands

In fur­ni­ture, Pep­per­fry has the largest col­lec­tion of de­signs sourced from 150+ na­tional brands in­clud­ing Home­town, Space­wood and Evok, and it has or­gan­ised the non-branded fur­ni­ture un­der its very own in­house brands. In­house brands also cater to a wide range of de­sign and style spec­i­fi­ca­tions of con­sumers and con­trib­ute to 50 per­cent of the over­all business.


Woodsworth is char­ac­ter­ized by a time­less, classic range of fur­ni­ture. Re­flect­ing de­signs that are sleek, con­tem­po­rary and func­tional. It aims to de­liver a blend of style and value, aes­thet­ics and func­tion­al­ity as well as com­fort and un­com­pro­mised qual­ity.

MINTWUD: Mintwud is con­cep­tu­al­ized for modern and com­pact homes - a rare com­bi­na­tion of style and func­tion­al­ity. It fol­lows a very min­i­mal­is­tic de­sign lan­guage op­ti­miz­ing the ma­te­rial and cut­ting down ex­cess to make sure the fur­ni­ture is pleas­ing to the eye and easy on the pocket.

CASACRAFT: The modern de­signs in the Casacraft range rep­re­sent the ideals of prac­ti­cal­ity, cut­ting ex­cess and ab­sence of dec­o­ra­tion. This brand re­flects the de­sign phi­los­o­phy of ‘form fol­lows func­tion’ preva­lent in mod­ernism. Re­plete in unique fin­ishes and min­i­mal­ist yet strik­ing ac­cents the unique range of fur­ni­ture adapts per­fectly to modern liv­ing.

AMBERVILLE: Amberville is syn­ony­mous to a stately and gra­cious liv­ing. Tak­ing inspiration from the classic colo­nial style of fur­ni­ture preva­lent dur­ing the

1,800’s, the Amberville Colo­nial prod­uct line re­flects a de­sign sen­si­bil­ity de­ter­mined by the very gen­teel and cul­ti­vated Euro­pean Queen Anne and Ge­or­gian style epit­o­mis­ing the deep dark woods and warm spice colour pol­ishes. BOHEMIANA:

Bohemiana is a range of fur­ni­ture that blends the free spirit of the eclec­tic with the rigid frame of the in­dus­trial pieces. They com­ple­ment each other to have the right bal­ance to add to home in­te­ri­ors. Th­ese ‘one of a kind’ quirky ac­cent pieces add a splash of colour in dull spa­ces.

MUDRAMARK: Mudramark is care­fully crafted fur­ni­ture which is in­flu­enced by eth­nic In­dian art, ar­chi­tec­ture and cul­ture. The Mudramark range of prod­ucts are in­spired from or­ganic and or­nate In­dian forms; in­tri­cate paint­ings and dis­tinc­tive mo­tifs. The beau­ti­ful crafts­man­ship and de­tails makes the house be­come a home with fur­ni­ture that tran­scends gen­er­a­tions.

MOLLYCODDLE: This brand aims to turn the four walls in the child’s room into their dream­land/ fan­tasy land. Mollycoddle is a ver­sa­tile range of modern chil­dren’s fur­ni­ture with a punch of vi­brant and cheer­ful colours. Each piece by Mollycoddle is child safe, care­fully de­signed, con­structed and cu­rated.

CLOUDDIO: Clouddio has qual­ity mat­tresses and of­fers pil­lows, mat­tress pro­tec­tors at com­pet­i­tive price-points for con­sumers. Stra­tus, Cu­mu­lus, Nim­bus, Al­tus and Cir­rus are the sub brand.

PRIMORATI: Th­ese are modular wardrobes that are func­tional and unique with a sleek fac­tory fin­ish. With best qual­ity raw ma­te­rial, this brand of­fers a wide va­ri­ety of fin­ishes and colours. One can se­lect shut­ter styles, in­ter­nal con­fig­u­ra­tions and fit­tings to cre­ate the ul­ti­mate co­or­di­nated look.

MANGIAMO: Mangiamo is a modular kitchen brand that is cus­tomised, er­gonom­i­cally de­signed with high qual­ity fin­ish. It is a fu­sion of func­tion­al­ity and aes­thet­ics that lends an in­ter­na­tional look.

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