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Hero Cycles is pedalling along to tap into its nationwide distribution footprint and push sales of e-cycles at a time there is a growing thrust from industry and government for clean mobility and green commute. And as the Ludhiana-based manufacturer looks to expand its store count to facilitate this, its mantra is delivery of “experience”.
The company’s distribution footprint consists of 5,000-plus traditional multi-branded cycle stores and a growing network of franchisee-led futuristic cycle stores called Sprint. It has 120 Sprint stores in 85 cities. The cycle manufacturer dubs these e-connected stores as a young and refreshed version of its classic retail outlets where its products share space with those of competitors. Targeting youngsters and cycling enthusiasts, the Sprint network is an ideal distribution channel for Hero Cycles to push its e-cycles. However, to enjoy a wider reach, the company now continues to make its e-cycles available through traditional multi-brand stores as well.
Pankaj M Munjal, chairman and managing director, Hero Motors Company, says, “We need new retailing formats in line with modern trade practices which offer superior shopping experience particularly to the top-end lifestyle buyers. We have created state-of-the-art Sprint stores that are equipped to entertain new generation intenders for e-cycles.”
The company plans to have more than 400 Sprint stores in place by the end of 2018-19 with a reasonable reach across the country. With “customer delight” being the key theme running through store design and layout, Sprint stores offer a host of features including wide-cycle portfolio, accessories, bike spa, product demo and rides. Essentially, these stores aren’t merely looking at selling a product “cycle” but they are also delivering “experiences”.
Built from the ground up, Sprint stores are fully equipped to meet the 3S of retail business, namely sales, service and spares.
Each store has a team of cycling enthusiasts, all under 26, who have been educated about product features and benefits. The team is equipped with tablets where customers can experience Hero products just as people experience music and other services in Apple store.
Commenting on Hero Cycles’ leveraging its nationwide retail for e-cycles, Anil Pillai, director, Terragni Consulting, says, “e-cycles are an product and transport innovation. Any innovation that you launch in the marketplace cannot be done through multi-brand outlets. The better approach would be franchisee or within the franchisee if a player goes for shop-in-shop concept. The fact that Hero has its own large franchisee chain can prove to be an advantage.”
The new-age stores are typically spread across 300 to 500 square feet. Sprint stores have been designed as experiential zones that use technology to help dedicated product champ teams to better understand customer needs and assist them in their purchase decision. These stores are a clear departure from multi-brand traditional stores where sellers depend on a catalogue to show products to buyers. Typically, traditional sales channel only stock 50 to 100 stock keeping units. In comparison, Sprint stores house 130 to 200 Hero Cycles models. They offer wider choices to buyers.
So far, the benefit of e-cycles to consumer is well known. It is a green mode of transport and appeals to the socially conscious. However, Pillai says Hero Cycles needs to allay fears in the consumer’s mind. It needs to answer questions like “can I get replacement parts and how to use the product optimally”. Therefore, the franchisee store does not have to be just a point of sale but also serve as a point of experience where the customer is put through the experience of owning and driving the product. That’s the shift that needs to come in the cycle manufacturer’s strategy. Also, since the e-cycle buyer is not going to be a repeat purchaser, in order to create value, the company has to create multiple points of engagement for buyers on the lines of riding trips planned by Harley Davidson.
Hero Cycles stores can afford to try and move beyond serving as experience zones. The stores could be used to deliver an immersive consumer experience to customers through virtual reality. It can take buyers on a virtual tour to popular trails like Leh and Ladakh for delivering a stimulated yet real cycle riding experience. Pillai says the manufacturer can also look to go beyond the pull strategy that involves drawing customers to distribution points. Rather, it can move closer to buyers at places where they congregate.
“To promote e-cycle adoption, we need to create consumer awareness and promote experiential test riding to build trust. The product also needs a lot of after sales service. Our understanding of the market and our relationship management skills combined will help the company form a new bond with the dealers to offer the right solution to buyers of e-cycles.”
