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BW Businessworld

Retailing Needs All Channels

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Bangalore-based women's ethnic fashion retailer Soch is making big moves. In its 12th year of operations, the Rs 250-crore company has begun to think innovative ways of retailing. The brand believes that people will visit a brick and mortar store, but they would like to be engaged on the mobile platform more often. At present, the company’s headcount is up to 1,400 people and has 52 stores. Growing at a CAGR of 46 per cent, the company feels it must understand catchment because supply chains can be tweaked to suit regions rather than just stocking all designs. This is even more relevant in online space since one can have data that can tell the company what the customer’s habits and preferences are. Vinay Chatlani, the founder of Soch, spoke with BW | Businessworld’s  Vishal Krishna about the millennial shopper and explained that retail was on the upward curve because India was still underserved with quality retail: Excerpts
 
How has retail performed over the years and what does it take to thrive in retail?
In our business, you need to have new styles in every two weeks. Retail is about managing the supply chain and scaling up catalogues. The catalogue also changes by season. Around 45 per cent of our sales come from the catalogue. 

We follow a centralised design model and we procure fabrics and give it to our manufacturers. We have 25 core manufacturers and other 60 who manufacture for us based on demand. The catalogue itself cannot have more than two months of shelf life. It took us time to build clout in the market. Be it with malls or with the consumer, building a brand takes a lot of time. 

How do you read your consumer and market?
Certainly, the purchasing power of women has gone up. Our data suggests that over a period of five years, there has been a spike in salwars and kurtis. Sarees sales also dipped from 50 per cent to 35 per cent. 

Our core audience is women in the age group of 25 to 35. The ticket size for the younger woman is Rs 1,200 and the frequency of buying is monthly. These people order from our online channels such as Flipkart and Myntra. Housewives shop once in three months and spend around Rs 4,000 or more in our stores. The bulk of this change has happened in the last three years with 65 per cent of the women shopping with credit and debit cards. Data also indicates that the newlyweds or younger women have their own income and shop on a monthly basis.  There is a lot of mix and match of styles going on. Women do not wear ethnic for any special occasion anymore. These are our consumers and if you look at our sales channels, we see the malls bringing in more sales for us across Mumbai, Delhi and Bangalore. In smaller cities you can have not more than two stores.

We have 48 company owned stores and four franchise stores. The mix, as I said, is based on consumer buying habits.  We are building an aspiration brand.
 
It must be a dynamic channel out there with e-commerce
E-commerce has seen phenomenal growth. Seven per cent of our sales come from online, including Amazon and others. We spend 25 per cent of our marketing budget on social channels. We have an app which leads the consumer to our mobile site. The app is extremely important to showcase and catalogue. It is important to integrate brick and mortar stores with the online sales channel. 
 
I can use my inventory across stores to deliver to the nearest region or the customer can pick it up in the store. The online model is here to stay and we are also going to increase our shop in multibrand retail outlets. The franchise model is good and we will open stores abroad as well. There are four franchise stores in India. Through the Franchise route we may look at opening stores in Dubai, Qatar, south east Asian countries and maybe even the USA and Australia. The plan is to cater overseas Indians, too. We will eventually open 30 stores in the country and add more than 15 franchisees. For our stores we will invest roughly Rs 70 lakh for a 2,000 square feet store. The money will be raised through internal accruals and debt. The money will also be used to consolidate supply chain and technology. 
 
You keep talking about technology, is it the single most important thing for a retailer to own these days?
We started off as a small retailer. But technology becomes vital for several things as you grow into a large organisation. For a retailer it is about winning customers and managing supply chains. The data generated needs to be used intelligently and using good customer management systems. The loyalty programme will become more robust.  You have to invest in it and it has taken a large customer angle these days. Anything that improves the bottom line is good.
 
We are hiring people who can take us to the next phase. In the apparel retailing world buying is an art and you have to use consumers’ data create product. It is always about marrying science with the art.


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