Shoppers Stop pulls up its socks

How the retail chain is getting shoppers, both loyalty members and walk-ins, buy into assortments

Consumer industries have felt the pinch of decreased spending by customers. However, a few retailers have bucked the trend as their same-store sales went up in the quarter ended June. Mumbai-based multi-brand retailer Shoppers Stop is one of them: it clocked growth of 12 per cent from stores operational for over a year. Growth in sales in existing stores (indicated as same-store sales growth) is the holy grail for retailers, as it shows their ability to make good of their business, more than the incremental sales from new stores.

While one reason contributing to the retailer's growth was seasonal, Shoppers took a few measures that were more than quarterly triggers. This financial year's first quarter was choc-a-bloc with wedding dates, leading to a frenzied shopping of gifts, shoes, accessories, make-up and apparel. So, though Shoppers does not stock bridal wear, the complementary wedding shopping that is immune to a downturn boosted sales.

Managing Director Govind Shrikhande says growth for the chain has also been fuelled by a few changes that didn't depend on such external factors. For one, Shoppers has seen its supply partners lend a helping hand and pull up their socks. "There has been a strong assortment of brands. By the last week of March, we had the new stocks finding their way into our stores. In terms of colours and fabrics, both womenswear and menswear were distinctly different," says Shrikhande. For example, Louis Philippe put on offer a new trouser fit, while the differentiating factor for Van Heusen was an adjustable waistband in trousers.

Some cut slack from their supply chains such as Benetton, cutting on time to replenish stocks. Zodiac increased the availability of its different clothing items and beefed its range. Some of these brands, according to Shrikhande, have seen like-to-like sales go up 23 per cent.

Shrikhande explains, "When the markets are tough, the brands want their stock to work harder for them and increase the sales throughput." Abneesh Roy, associate director at Edelweiss Securities, says, "Shoppers has also been able to rotate its own inventory well, say, by rotating non-moving items from larger towns to places where they could get sold. It has customised merchandise in the smaller towns as well."

Roy says the downturn has also seen retailers step up activations. For Shoppers, that has meant tapping its three million-strong loyalty card-holders. They contribute no less than 73 per cent of the chain's sale. "We launched a strong scheme for our First Citizens (loyalty customers) which was more tangible than earlier. If earlier we allowed them to triple their points with purchases, from June onwards, we have offered discount vouchers which are more 'here and now'," says Shrikhande.

Shoppers has used its extensive data on card-holders to decipher insights on their habits. Vinay Bhatia, customer care associate and vice-president, marketing and loyalty, says, "We need to make the customer buy into assortments from time to time, rather than single items of clothing or accessories." Based on shopper information from its member base, the retailer sends reminders in the form of 'how-tos' or suggestions on accessorising a recent (two and a half weeks later) purchase of a trouser or a jacket with belts, ties, shoes, etc. He says this contributed Rs 40-50 lakh in incremental sale.

If earlier, Shoppers had used the data to decide on what merchandise to stock in a new store, now it is using it to segment inactive members and offer them targeted vouchers. The chain would send direct mailers to get back members who had not come to the stores for over 13 months.

Shoppers would need such methods to maintain the sales momentum, especially since it is not stalling its expansion. It had opened five stores by June, and the count could go up to 10, according to Shrikhande. "The realty pipeline is drying up for malls. So, it makes sense to buy now in the better developments coming up now to sustain in the long term. The impact on costs would be felt only in the short term as in the next three-four years, there might not be enough new ones to accommodate expansion plans," reasons Shrikhande.

With second quarter results coming up, it has to be seen whether the chain has made its internal tweaks work for it or not.