Fabindia looks to reward the faithful, enhance purchase experience

In what is one of the fastest growing segments in the fashion category, ethnic wear, Fabindia was once the only big brand with a pan-Indian presence. However in the age of e-commerce and social media marketing, it has been caught in a storm of home-grown brands and private labels from big retailers. So, in its quest for relevance and appeal, the brand is taking a close look at its relationship with customers, offering them loyalty benefits and a better in-store experience.

It has to start with set up experience centres in some stores. This includes a café and a design studio, in addition to the regular fare of clothes, organic food and furniture. Viney Singh, managing director, Fabindia said, “The aim is to provide a highly engaging experience that builds a lasting relationship with our customers.” In this way, he hopes to increase the number of opportunities that the brand and customer have, to engage with each other.

Driving the huge focus on the customer is a sharp increase in the perceived potential of the category. Ethnic wear (including sarees and traditional suits/fusion wear) accounts for a dominant 74 per cent share of the women’s apparel market and is valued at $14–16 billion. It is growing at a CAGR (compound annual growth rate) of 8 per cent and is expected to reach $27 billion by 2025 according to a PricewaterhouseCoopers (PwC) report in 2018. The market is still highly unorganised but organised ethnic wear penetration is expected to reach 33 per cent by 2020, the report said.

Given the gold rush, Fabindia is keen to leverage the brand’s long association with the market (it turns 60 next year) and ride the expected upswing in favour of branded ethnic wear. One step is expanding the circle of experience stores—it has just launched its ninth in New Delhi-NCR and by the end of this fiscal is planning to open 12 such stores, said Karan Kumar, chief brand and marketing officer, Fabindia. Currently the company has around 300 stores across 100 cities.

By doing this, Kumar believes, the brand is building on its core strength and that lies in brick-and-mortar. However he hastily points out, this is not to say that the brand is not paying attention to the digital marketplace. Nearly four per cent of its revenue currently comes from this channel currently. But Singh added, for a brand to get high recall in a crowded marketplace, the store experience is critical. 

Brand consultant, CEO Bijoor Consults Harish Bijoor said that the company is clearly looking to revive the joy of physical shopping. “It is also a way of saying that e-commerce is not experiential while physical stores are.”

While the physical experience is important, the brand believes that it is also time to offer its old faithfuls the benefits of a long association. Its newly launched loyalty programme. Program Fabfamily offers incentives on purchases (discounts, special offers, exclusive events and so on) offline and online.

This is its first loyalty programme. Unlike its rivals, Fabindia has never had a rewards or incentive scheme for shoppers. Do loyalty programmes really keep customers coming back for more? Does it create brand stickiness? Not so much said Bijoor. “But the point is that it could keep 6-8 per cent of the clientele coming back. It is a hygiene factor today,” he added. Loyalty programmes serve another purpose too. It helps keep a close watch on the customer through the data she gives up to the store. And if Fabindia wants to serve the customer better, it has to know what she wants.