Best­seller In­dia

“On­line re­tail­ing is here to stay. Glob­ally, we have in­vested heav­ily into our on­line busi­ness and we see it as a big op­por­tu­nity to help us reach out to a greater num­ber of cus­tomers. How­ever, go­ing for­ward, just the on­line chan­nel will not be enough and

Shoes & Accessories - - Research -

BEST­SELLER is a Euro­pean, fash­ion com­pany, with a global range of more than 15 in­di­vid­ual fash­ion brands. BEST­SELLER pro­vides fash­ion cloth­ing and ac­ces­sories for women, men, teenagers and chil­dren. In In­dia, BEST­SELLER prod­ucts are mar­keted and sold un­der brands such as JACK & JONES, VERO MODA, ONLY and SE­LECTED HOMME. Their brands are fast fash­ion and al­ways in tune with the global trends. The com­pany has po­si­tioned it­self in the as­pi­ra­tional, pre­mium cat­e­gory. At the time of their en­try in the In­dian mar­ket, there were no fash­ion brands in the ap­parel cat­e­gory. There were a num­ber of in­ter­na­tional brands, which were sell­ing ap­parel; BEST­SELLER was amongst the first few to bring in the con­cept of fash­ion in In­dia. The ma­jor­ity of BEST­SELLER stores are lo­cated in malls, they also have a pres­ence in high-street re­tail, es­pe­cially since their flag­ship stores are in the big-box for­mat. The size of the stores for in­di­vid­ual brands range from 1,800-2,000 sq ft, which al­lows the cus­tomer to ex­pe­ri­ence the brand. As they are an in­ter­na­tion­ally renowned fash­ion brand and a leader in set­ting global fash­ion trends, the num­ber of op­tions on dis­play are al­ways quite high. Ad­di­tion­ally, they keep adding new styles ev­ery week to the store. The brand started with brick-and-mor­tar stores in malls and over time the avail­abil­ity of space in the malls be­came a chal­lenge. More­over, to in­crease their cus­tomer reach, they started col­lab­o­rat­ing with mul­ti­ple brand out­lets (MBOS), large for­mat stores (LFS) and also lo­cal/re­gional stores, which gave them a far greater reach, e.g. Kap­sons and Jade­blue. BEST­SELLER has wit­nessed a sub­stan­tial growth in the num­ber of shop-in-shop stores in the past few years; they now have nearly 553 such stores with their part­ners across 75 cities in the coun­try. The com­pany’s as­pi­ra­tions kept grow­ing with the suc­cess they achieved over the years and grad­u­ally this for­mat was also not enough to sup­port the growth ob­jec­tives They felt a need to en­ter Tier III and Tier IV cities, where it was not pos­si­ble to have a 1,800 sq ft store. for each brand; thus a new for­mat ‘The Danish Rack’ was in­vented. This al­lowed BEST­SELLER to open multi-brand out­lets with a fran­chis­ing model that has all three brands – JACK & JONES, VERO MODA, ONLY and SE­LECTED HOMME. The com­pany soon ex­panded in cities like Silig­uri, Nasik, Hald­wani, Al­lah­bad and Jodhpur with a sim­i­lar model.

The next wave of growth came with the on­line en­try; BEST­SELLER In­dia sells its prod­ucts on its own web­site and has also part­nered with other e-com­merce shop­ping por­tals like Myn­tra, Jabong, Ama­zon, PAYTM, Ajio, Snapdeal, Tata CLIQ, Koovs and Flip­kart. This on­line pres­ence has helped them reach nearly 20,000 pin codes, which is a big op­por­tu­nity for BEST­SELLER. The growth in e-tail is an im­por­tant part of the com­pany’s strat­egy for the fu­ture, yet, it is only go­ing to work in con­junc­tion with the omni-chan­nel ap­proach.

The cus­tomer is at the cen­tre stage for ev­ery omni-chan­nel strat­egy and it is no dif­fer­ent for BEST­SELLER. In fact, the most im­por­tant driver of all their strate­gies is cus­tomer out­reach. There is a per­cep­ti­ble shift in con­sumer be­hav­iour – with an in­creas­ing Gen Y pop­u­la­tion and the ad­vent of In­ter­net-pow­ered de­vices – shop­pers to­day want to en­gage with the brand at any point of time through mul­ti­ple me­dia. BEST­SELLER’S omni-chan­nel strat­egy is de­signed to cater to the needs of to­day’s con­sumer. Their fo­cus is to give con­sumers the com­fort they need to shop any­where and ev­ery­where with min­i­mum ef­forts. The part­ner­ship with Tata CLIQ is one of their strate­gic al­liances in the omni-chan­nel ap­proach, their in­ven­tory is live on the Tata CLIQ web­site, and the cus­tomers have an op­tion of ei­ther get­ting the prod­ucts de­liv­ered within six hours to their home or or­der on­line and col­lect the prod­uct from the store. The fo­cus is to be as close to the con­sumers as pos­si­ble; they are also col­lab­o­rat­ing with Myn­tra to make their in­ven­tory live on their web­site.

In the short term, de­mon­eti­sa­tion is a chal­lenge for the com­pany, as con­sumer spend­ing on ap­parel is dis­cre­tionary and not a ne­ces­sity. Although the im­pact is re­duc­ing with each pass­ing month, this is ex­pected to limit the growth in rev­enues for the next one year. The av­er­age ticket size has re­duced, also the num­ber of bigticket trans­ac­tions have come down.

In the medium to long term, e-com­merce is ex­pected to sta­bilise, which will pose a chal­lenge for the over­all rev­enue growth. Lim­ited avail­abil­ity of qual­ity re­tail spa­ces is go­ing to be another de­ter­rent for the fu­ture. All good malls have lim­ited va­cancy and there is no vis­i­bil­ity of new malls in the near fu­ture, es­pe­cially in the Tier I cities. A well-thought dis­count­ing pol­icy, which is uni­form across all plat­forms, is very cru­cial for the suc­cess of the brands in the omni-chan­nel world. Fur­ther­more, im­ple­men­ta­tion of the Goods and Ser­vices Tax (GST) is ex­pected to have an in­fla­tion­ary im­pact on ap­parel pric­ing, as­sum­ing tex­tiles come un­der the merit list of GST. Once GST comes into play and de­pend­ing on the tax slabs of 12 and 18% on tex­tile, the prices for fin­ished prod­ucts may get im­pacted.•••

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