Shoppers Stop changes strategy, brings focus back to premium segment

Three-decade-old Shoppers Stop is fine-tuning its strategy to bring focus back on the premium segment as global and local fashion retailers up the ante.
 
Last month, Japanese fashion major Uniqlo launched its first store in Delhi, joining the likes of H&M, Zara, and Marks and Spencer, which have been in India for a while. Reliance Retail, who has a tie-up with Marks and Spencer and other international labels, has been aggressive in fashion and lifestyle over the past few years, much like Trent (which has a joint venture with Zara), Aditya Birla Fashion and Retail (promoters of Pantaloons), and Future group.
 
It’s not the first time Shoppers Stop is changing its strategy.When the country’s oldest department store chain started as a premium fashion and lifestyle destination in the 1990s, Shoppers Stop soon realised it would have to widen footprint, targeting more consumers across cities as modern trade gained currency.
 
In the past few years, Shoppers Stop expanded aggressively into smaller cities, launching and shutting unprofitable outlets. The chain has 84 department stores in 40 cities and an online presence (via its website and marketplaces such as Amazon) that services 25,000 pin codes.
 
But, to keep up with rapid urbanisation and affluent metro markets, Shoppers Stop will now launch mainly premium and luxury stores in top cities. Managing Director and Chief Executive Officer Rajiv Suri says the retailer has identified catchments where demand for premium brands is high. “We want to meet the aspirations of these consumers, who are seeking latest trends and fashion.
 
At the core, we retail leading brands. And we continue to add the latest trends, fashion, and experiences, which form the creamy layer of our offering,” he says.
 
While some analysts have questioned the frequent strategy changes at Shoppers Stop, some say retailers have to be relevant to consumers all the time.
 

“World over, retailers constantly change their business models. There is no harm in it but you need to define your position in the current market context accurately. The domestic retail market has evolved over the years and Shoppers Stop is going back to its roots, which is addressing the needs of the premium consumer,” says Devangshu Dutta, chief executive offer, Third Eyesight, a Gurugram-based management and retail firm.
 
According to a report by consultancy firm BCG, more than 60 per cent of those surveyed by it for a study on consumer behaviour said they shopped to stay trendy.

“Many felt they wanted to upgrade to the latest product to stay in vogue and not because there was a pressing need for a replacement. This is interesting because it points to where shopping behaviour is headed and what retail brands can do to tap this consumer,” says Kanika Sanghi, partner and associate director at BCG’s India Centre for Customer Insight.
 
Sanghi has co-authored the BCG report along with managing director and partner Nimisha Jain.
 
The report also says 57 per cent of people surveyed wanted services that were time-saving and located at one place.
 
Shoppers Stop appears to have picked up these cues. Suri says the chain has launched a “top-end beauty store” called Arcelia in Hyderabad, which has luxury brands such as Guerlain and Dior and high-end fragrances such as Tom Ford under one roof.
 
Existing department stores, he says, are being refurbished and stacked with premium merchandise to woo the well-heeled. The Shoppers Stop outlet in Vasant Kunj in Delhi, for instance, has an enhanced beauty hall and the latest in fashion and beauty, aimed at making it as convenient as possible for shoppers in that locality. The chain has also launched its first luxury store at Golf Course Road in Gurugram and will roll out more such outlets in the coming months.