Are we ready for retail?
ZARA’s impending retail space is truly an incredible thing. The Spanish clothing giant has leased 50,000 of a heritage building smack in the centre of Mumbai 400 001—Fort—the address that was historically meant to be tonier than others. News reports reveal the retailer will cough out Rs 3 crore a month in rent. This figure is tickling sexy, as one can only imagine the store’s profit margins.
But this news is also good news on another front. India’s reputation as a consumer country has been poor to laggard. The luxury labels here are holding on to a wing and a prayer, while the high street shops have had several bugbears holding back their expansion plans. For one, rentals have been unrealistically high. Two: a quota maintained for backend ops has eaten into the quality of several brands and diluted their image. Three: Indian franchise holders have sought to make their own profits by keeping racks of a cheaper range that’s made in India, right opposite a rack of made in China with international prices (Converse, US Polo and several others do this). How’s that for undercutting the hand that feeds you?
But finally, the Indian consumer is the hardest nut to crack. When you think she will zig, she zags. Her penchant for seeking a good price needs to be accepted as a challenge. European companies had to do with the USA too. Finally, the right balance between product and quality must be maintained. Retailers in India (and this is especially true of luxury labels) invest excessively on branding — advertisements, events, eyeball-grabbing billboards, instead of the product itself. This eats up the profit which should probably be spent on better training of staff.
Insiders will agree that Zara did bungle up with its prices, but fixed them within six months of its arrival. Zara had to chop down its price tags by about 20 per cent, but it at least doubled its sales. From then on, it only grew and grew. Inditex, the parent company that owns Zara, even delayed the opening of its posher label, Massimo Dutti, for a few years so it wouldn’t eat into Zara’s space.
Another high street brand that is showing great numbers in India is Marks & Spencer. The British highstreet magnate opened a fourstoried mega store in Bandra’s buzzing Hill Road two years ago. It also continues to occupy among the largest spaces in malls today. Marks & Spencer made its mark by its product alone—a good quality, high wearability item that never really goes out of style. M&S’s classic style is hugely popular with an older generation and the working woman’s wardrobe. Its children’s range, mightily popular elsewhere in the world, suffers from poor merchandising in India.
And finally there is Ikea. The Swedish flat-pack giant is arguably the shop this country has waited for too long. Of course we wish it was here 15 years ago, but its large-scale investments needed a better welcome by both the governments in office in as many years. Ikea (that opens in Hyderabad first and in Thane next) has excited the retail world more than anything else, especially because it promises to invest Rs, 1000 crore in India alone, and open 25 mega stores in less than ten years. Ikea will bring to Indian homes a much needed makeover— something affordable and modern at the same time. It also fills the gap between the cheap rubbish offered by home décor stores and overpriced lifestyle boutiques. Ikea will do for our homes what Zara and M&S did for our wardrobes.
The wonderful thing about these brands is their ears are closer to the ground that the others. They are fuelled by the high street and feed off it too. It is this symbiotic relationship that spells out their success.
But this news is also good news on another front. India’s reputation as a consumer country has been poor to laggard. The luxury labels here are holding on to a wing and a prayer, while the high street shops have had several bugbears holding back their expansion plans. For one, rentals have been unrealistically high. Two: a quota maintained for backend ops has eaten into the quality of several brands and diluted their image. Three: Indian franchise holders have sought to make their own profits by keeping racks of a cheaper range that’s made in India, right opposite a rack of made in China with international prices (Converse, US Polo and several others do this). How’s that for undercutting the hand that feeds you?
But finally, the Indian consumer is the hardest nut to crack. When you think she will zig, she zags. Her penchant for seeking a good price needs to be accepted as a challenge. European companies had to do with the USA too. Finally, the right balance between product and quality must be maintained. Retailers in India (and this is especially true of luxury labels) invest excessively on branding — advertisements, events, eyeball-grabbing billboards, instead of the product itself. This eats up the profit which should probably be spent on better training of staff.
But then there is Zara. The clothing-maker we all love to hate (since it practically invented fast fashion, and also pretty much owns the space), is suddenly the hero of nation. Its gargantuan success in India boggles every consumer study. How did it do it? It simply found a gap and filled it. Indians were desperately looking for uptown-looking, trendy clothes. Zara gave them that.
Insiders will agree that Zara did bungle up with its prices, but fixed them within six months of its arrival. Zara had to chop down its price tags by about 20 per cent, but it at least doubled its sales. From then on, it only grew and grew. Inditex, the parent company that owns Zara, even delayed the opening of its posher label, Massimo Dutti, for a few years so it wouldn’t eat into Zara’s space.
Another high street brand that is showing great numbers in India is Marks & Spencer. The British highstreet magnate opened a fourstoried mega store in Bandra’s buzzing Hill Road two years ago. It also continues to occupy among the largest spaces in malls today. Marks & Spencer made its mark by its product alone—a good quality, high wearability item that never really goes out of style. M&S’s classic style is hugely popular with an older generation and the working woman’s wardrobe. Its children’s range, mightily popular elsewhere in the world, suffers from poor merchandising in India.
And finally there is Ikea. The Swedish flat-pack giant is arguably the shop this country has waited for too long. Of course we wish it was here 15 years ago, but its large-scale investments needed a better welcome by both the governments in office in as many years. Ikea (that opens in Hyderabad first and in Thane next) has excited the retail world more than anything else, especially because it promises to invest Rs, 1000 crore in India alone, and open 25 mega stores in less than ten years. Ikea will bring to Indian homes a much needed makeover— something affordable and modern at the same time. It also fills the gap between the cheap rubbish offered by home décor stores and overpriced lifestyle boutiques. Ikea will do for our homes what Zara and M&S did for our wardrobes.
The wonderful thing about these brands is their ears are closer to the ground that the others. They are fuelled by the high street and feed off it too. It is this symbiotic relationship that spells out their success.
Disclaimer: The views expressed here are the author's own. The opinions and facts expressed here do not reflect the views of Mirror and Mirror does not assume any responsibility or liability for the same.
