“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
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.•••