We are a renowned retailer in India and a subsidiary of the K Raheja Corp Group (Chandru L Raheja Group), a prominent real estate development and hotelier group in the country. Our company has been instrumental in establishing and efficiently managing a nationwide network of large format department stores, playing a crucial role in the growth of organized retail in India. Through the incorporation of international best practices into our retail operations and providing customers with an unmatched shopping experience, we have emerged as industry leaders.
Shoppers Stop, established on October 27, 1991, by K. Raheja Corp group of Companies, began its journey in Andheri, a suburb of Mumbai. Initially specializing in menswear, Shoppers Stop expanded its product range to include ladieswear, cosmetics, and jewelry. Renowned for its affordable prices and superior quality products, Shoppers Stop has gained household recognition. Moreover, it proudly holds the distinction of being the first Indian retailer to join the prestigious Intercontinental Group of Departmental Stores. With a net turnover of Rs 12.8 billion, Shoppers Stop is India’s largest departmental store chain. It operates 24 stores across eleven cities, with the original store located in Andheri. Under one roof, shoppers can find a wide array of international and domestic brands in its 1.3 million square feet of retail space. The company’s portfolio also includes Homestop for lifestyle retailing, Crossword and Brio for speciality retailing, and Hypercity for value retailing.
Shoppers Stop is a well-regarded brand known for its affordable, high-quality products. It was the first Indian retailer to join the prestigious Intercontinental Group of Departmental Stores. India’s retail industry has experienced significant changes with the rise of scalable and profitable retail models in different categories and formats. Traditional markets are being replaced by departmental stores, hypermarkets, supermarkets, and specialty stores. Modern malls provide comprehensive destinations where shopping, entertainment, and dining experiences are all available in one place.
The retail industry in India is experiencing significant growth, with the country projected to have almost 50 million square feet of high-quality retail space by the end of 2007. This represents a growth rate more than ten times higher than four years ago. The total value of the Indian retail market is estimated at approximately Rs. 14,100 billion, with organized retail accounting for about 4% or Rs. 511 billion. Several factors contribute to the expansion of organized retail in India. One factor is the changing demographic profile, as a larger proportion of individuals aged between 20-60 years old now possess greater purchasing power and willingness to spend. Compared to countries like the USA, China, Japan, and the UK, India’s younger population significantly contributes to increased consumption that directly benefits the retail industry. Additionally, there has been an increase in mall space throughout India due to a surge in real estate development.
The real estate industry in India is experiencing a boom due to positive growth in various sectors. The focus of development is primarily on retail and residential areas. Over the span of four years, mall space has significantly increased from 2 million square feet in 2002 to 28 million square feet in 2006. According to a study by ICICI, malls are predicted to be worth Rs.384,470 million by 2010.
In addition, there has been an increase in high-income households according to NCAER. In 2006, there were 6 million households with an annual income of Rs.215,000 or more and 90.9 million households with an annual income ranging between Rs.45,000 and Rs.215,000.However, it is expected that the number of lower-income households like Aspirants (annual income of Rs.16,000 to Rs22 ,000) and Destitute (annual income less than Rs16 ,000) will decrease significantly.
Furthermore, the middle-class population is growing rapidly which has led to a substantial increase in consumption of durables such as cars, cable television subscriptions and cellular subscribership in India.This growth can be attributed to changing demographics related to income levels and age profiles along with macro-environmental factors within the country.Currently,the Indian retail sector ranks second largest globally with the top six cities representing 66% of the industry’s presence.
Indian consumers have a growing preference for malls over retail shops due to improved facilities and emphasis on customer satisfactionIt is estimated that India will have around 600 operational malls by the end of 2009. Shoppers Stop stands out from other competitors due to its inclusion of various in-house brands, which significantly contribute to their overall revenue.
Shoppers Stop offers a variety of brands that cater to different consumer preferences. One of these brands is Life, which provides casual wear and accessories inspired by international fashion trends, targeting younger consumers. Another brand, Kashish, specializes in traditional clothing. The presence of diverse brands at Shoppers Stop enhances customer satisfaction. Vettorio Fratini focuses on sophisticated formal attire, while Insense exclusively caters to women’s casual clothing for social events.
On the other hand, Mario Zegnoti is a perfect blend of formality and flamboyance, catering to romantic and stylish men. Indi-visual is a t-shirt brand that aims to depict the diverse aspects of India through vibrant and meaningful images. Stop is a brand under Shoppers Stop, specializing in casual and simple t-shirts for everyday wear. What makes it highly sought-after is its offering of affordable casual clothing. Shoppers Stop offers a wide range of in-house brands, surpassing its competitors in terms of variety.
The various brands offered by Shoppers Stop are not only differentiated by their numbers, but also by their unique qualities and target audience. As a result, Shoppers Stop caters to all customer segments in the Indian market, ensuring high levels of customer satisfaction. Regardless of whether they are students, working professionals, or housewives, all Indian customers can expect to find their preferred clothing options at Shoppers Stop. Moreover, apart from clothing, Shoppers Stop now offers a wide range of products including cosmetics, jewelry, and perfumes. This expansion into different product categories has greatly benefited the company’s growth and success.
Shoppers Stop’s revenue comes from a variety of products, including non-apparel items like watches and eye-gear. They offer a wide selection of popular watch brands such as Tagheur, Swatch, and Giordano to satisfy both global customers and those looking for affordable options. Alongside international styles, the company also provides a range of Titan watches that offer good value for money. We see potential for significant growth in India’s department store industry due to shifting consumer aspirations and the desire for an improved lifestyle. With a younger population having more disposable income and a willingness to try new things, we are primarily focused on expanding in Indian department stores but also exploring other formats for further growth opportunities.
We are constantly evaluating different opportunities and may consider exploring new delivery formats or product categories, as well as expanding within our current offerings if they prove appealing or can enhance our existing format. The retail industry in India is experiencing significant growth, with the construction of numerous malls expected to be finished by the end of 2009. This expansion is not limited to major cities but also includes tier two and tier three cities. It is estimated that approximately 600 malls will be operational in India within the next two years. As the hub of this retail boom, it is expected that the capital city will have around 150 malls.
The increase in the number of malls is attributed to a shift in customer mindset. Indian shoppers now prefer malls over local retailers, which has greatly benefited the retail sector. This shift has also positioned the retail industry as the next major wave in India. Despite its rapid 20% growth, the retail industry is still considered to be in its early stages, indicating the immense opportunities available. This explains why even major business houses have entered the retail industry without any prior experience.
Pantaloons was one of the first to join the retail boom in India, having confidence in the sector’s long-term potential even when others were uncertain about its sustainability. Our strategy involves expanding our presence within current cities and nationwide. This includes opening more stores, particularly larger ones, in existing cities to access untapped areas and optimize our infrastructure.
Expanding our presence to include more of the top 50 cities in the country allows us to connect with a larger audience and establish ourselves as a preferred shopping destination. This expansion provides an opportunity for domestic and international brands to engage with customers who fit our customer profile. Additionally, as we expand our loyal customer base, there has been a noticeable increase in First Citizens from 632,086 on March 31, 2006, to 781,951 on March 31, 2007.
In the year ending March 31, 2007, the majority of our sales were driven by First Citizens, who accounted for 62% of our total sales. By December 31, 2007, there were a total of 971,537 First Citizens and they contributed to our sales between April 1 and December 31, 2007 with a percentage of 61%. Increasing the number of First Citizens who experience Shoppers’ Stop would enhance customer loyalty. To achieve this objective, we believe that our new software called Business Objects will provide us with a profound understanding of individual customers so that we can generate more profitable sales and effectively cater to their specific needs.
To expand our customer base, we have a plan in place. We will open new stores and introduce new initiatives. This strategy will attract different brands to collaborate with us and utilize our stores as a way to connect with these customers. Our aim is to bring in new brands and create private labels for a wider range of products in each category. We are constantly working on improving the variety and quantity of our merchandise. Our program for private label and private brands is crucial in setting us apart from competitors and increasing profit margins.
We are the official representative for Austin Reed (UK) in India, offering their men’s outerwear collection which includes tailored clothing such as suits, jackets, trousers, shirts, and ties. We also provide smart casual wear like trousers, jackets, shirts, and knitwear. Furthermore, we have a wide range of women’s clothing available. Our goal is to collaborate with both domestic and international brands and introduce them to the Indian market through our retail outlets. If circumstances allow in the future, we may expand our own chain of stores to directly offer these brands to customers.
We have signed an exclusive franchise agreement with Mother Care UK Limited to distribute their products in India. Mother Care specializes in clothing and accessories for children and expectant mothers. India has the largest young population globally, which is a key driver of growth in the retail industry. The country has a total of 890 million people below the age of 45. Additionally, there are about 300 million individuals who belong to the Indian middle class, with approximately 70 million earning around 8,00,000 Rs per year. On April 24, 2008, Shopper’s Stop Ltd., one of India’s oldest retail chains, unveiled its new logo as part of a rebranding strategy. The chain aimed to position itself as a “bridge to luxury” store rather than simply being a premium retailer.
B. S. Nagesh, Customer Care Associate and Managing Director of Shopper’s Stop, commented on the change, stating that change is necessary due to the evolving preferences of their consumers. He noted that their consumers are getting younger, necessitating change in their identity. This change in identity is just the beginning of various strategic movements within Shopper’s Stop, including changes in people, practices, the introduction of new shopping methods, technology investment in customer relationship management, and analytics. Analysts point out that Shopper’s Stop began losing market value in the mid-2000s as it failed to keep up with changing customer preferences. It faced competition from other retailers like Globus, Westside, Lifestyle, etc., who also catered to the same customer segment. The changing consumer behavior and the demand for trendy products from young consumers led Shopper’s Stop to consider rebranding itself.
Shoppper’s Stop conducted a series of workshops called ‘Trial Room’ to understand consumer preferences. These workshops revealed that a change in the brand’s look and feel was needed. Rebranding for Shopper’s Stop involved not only changing the logo but also implementing new business strategies while keeping the core principles intact. The brand needed to connect with younger individuals, and rebranding would also help change how people perceive the brand. As part of the rebranding efforts, Shopper’s Stop introduced a new rectangular logo designed by Ray Keshavan.
Although the logo was altered, the black & white color scheme remained unchanged as it had a strong brand recognition. The tagline was also modified from ‘Shopping. And Beyond’ to ‘Start Something New,’ suggesting that customers should venture into new and unique experiences and adapt to the evolving world. As part of their new approach to delivering an enhanced shopping experience, Shopper’s Stop introduced various initiatives, including a plan to expand the per store area from approximately 40,000-45,000 sq. feet to 75,000-85,000 sq. feet.
Shoppers’ Stop introduced innovative ideas in the retail industry, such as trial rooms with day and night lighting options for customers to assess how garments would appear in different lighting conditions. They also implemented a new dress code for employees and conducted training sessions to better serve customers with diverse preferences. In December, they adopted the theme “Party On” for their promotion, distancing themselves from the traditional focus on Christmas and Santa Claus. This initiative was based on the insight that people strongly associate the term “party time” with the month of December. To cultivate a festive atmosphere at the store, they hosted live bands, Disc Jockeys, bartending classes, and Salsa dancing workshops. Additionally, they organized local festivals across various regions, including the Shoppers’ Stop Sananda Pujor Bazar festival during Durga Puja in Kolkata, as well as Akshay Trithiya and Onam in South India and Sankranthi and Dhanteras in North India. Shoppers’ Stop also implemented loyalty programs to reward their customers.
Shoppers Stop is one of the few Indian organizations that prioritize customer satisfaction and consider the customer as the king. The company aims to maximize customer satisfaction by focusing on their needs and requirements and responding positively to customer complaints. Shoppers Stop believes in building strong customer relationships that foster loyalty. It was one of the pioneers in introducing a loyalty program to reward its consumers, starting with the First Citizen plan. This initiative has successfully built a strong bond with customers. Here are the various First Citizen Cards: 1.
Gold Card
Silver Card
Executive Card
The First Citizen members were able to enjoy the following facilities:
- Free parking
- Collection of points on every purchase
- Special area for entertainment
- Redeeming points on every purchase
- Invitation during festive season
- Greeting cards, gifts, etc were sent on special occasions
- A special day was reserved only for First Citizens when only they were allowed to shop for the entire day.
The immense success of this initiative is clearly visible in the rising contribution of first citizen customer in its total sales.
In 2007, First Citizen accounted for 66% of Shoppers Stop’s total sales, making it the country’s largest loyalty program.
Shoppers Stop launched its online store, ShoppersStop.com, on 18 September 2008. The e-store offers delivery across major cities in India and retails all products including apparel, cosmetics, and accessories.
As part of its CSR efforts, Shoppers Stop has initiated the “Think Green” campaign.
Under the Think Green campaign, the first initiative is focused on the Neem Tree. To promote awareness and support for this cause, the exclusive brand ‘Life’ merchandise now comes with sachets of Neem seeds. The company aims to plant 1.5 lakh Neem plants within the next three months. Additionally, the company has replaced plastic bags with eco-friendly bags. The operational indicator of customer entry has consistently increased, reaching 6.5 million in the year 2001-02.
The number of customer entries at Shoppers Stop has been continuously increasing for 5 years. In the year 2006-07, the customer entry reached 19.9 million, which indicates a significant increase of 13.4 million over this 5-year period. This translates to a Cumulative Average Growth Rate (CAGR) of 27% for Shoppers Stop during these years. The highest increase in customer walk-ins occurred between the years 2002-03 and 2003-04. The Conversion Ratio is a measure of the ratio between the number of transactions and the total customer entry into the store. This analysis method helps the company assess the productivity of its front-end employees.
In this manner, the conversion ratio aids the company in comprehending the degree of satisfaction among customers who visit its stores and interact with company employees. Such insights can help motivate employees to enhance their performance. Additionally, it facilitates analysis to determine whether a decline in sales is due to product issues or the salesperson. The conversion ratio for shoppers stop was 33% in the initial year of 2001-02, gradually decreasing to 27% in the most recent year of 2006-07. Consequently, the conversion ratio has witnessed a percentage decline over the past five years.
The conversion ratio for shoppers stop has seen a significant decline of 8% in the year 2003-04, marking the largest decrease in one year. Over the past five years, there has been an increase in customer entry, but the conversion ratio has dropped. However, if we focus on the last two years alone, we observe that the number of customers converted has actually increased. This indicates that despite the overall decrease in conversion ratio throughout the past five years, the substantial growth in customer walkins has not affected the total number of customers converted. This information is part of the Shopper’s Stop sales analysis discussed in an interview with B. S., a human resource representative.
Nagesh, Customer Care Associate & Managing Director and CEO, Shopper’s Stop Ltd by Elizabeth Howard , fellow in retailing, Templeton College, University of Oxford. “We hire fresh undergraduates for sales positions. We do not hire anyone with experience. For managerial positions, we did not hire anyone from retail or textile backgrounds until recently. I did not want anyone with the belief that we could not succeed. Once we had five stores, we began focusing on improving merchandising and started hiring buyers from fashion and similar industries. However, we still primarily employ young individuals.”
The average age of the company is 28, with a front-end average age of 23. I am proud of our “Kangaroo” programme, which offers training for advancement. The programme follows the idea that individuals must first be proficient in their current roles before they can progress further. Through these programmes, customer care associates have the opportunity to become supervisors, and from there, they can participate in another programme that assists them in becoming department managers and beyond. While we have talented individuals at our headquarters, there is a significant gap that needs to be filled as we continue to grow. How will we address this challenge? As our company doubles in size, we will be in a favorable position to attract and recruit the best talent. People will correctly perceive us as a top-notch company.
Shoppers’ Stop, a chain of retail stores in India, plans to deploy a next-generation Business Intelligence (BI) technology stack. They also aim to venture into e-commerce. The company performs customer and employee satisfaction surveys every 6 months, with the goal of linking them. Store managers’ bonuses depend on the store’s EBITDA, which is subject to achieving increasing customer and employee satisfaction scores. At the department level, the manager’s responsibility is to ensure that feedback takes place.
The chain encompasses various types of data including employee data managed by the Human Resources Management System (HRMS) application, merchandise data handled by a separate application, and financial data managed by the Financial Application. The HRMS application takes charge of the employee’s journey from job application to selection. It incorporates resource management data and builds approval metrics before issuing the necessary resources for the employee’s work. The company has a workforce of approximately 4,500 individuals.
Shoppers’ Stop has partnered with Professor Douglas Tigert, an esteemed expert in retail marketing. “Training is essential for a retail company,” states Tigert. He acknowledges that Shoppers’ Stop conducts various training programs for employees across all categories. The constant competitiveness in the industry necessitates ongoing training at the company. Shoppers’ Stop, a member of the International Group of Department Stores (IGDS), will participate in the fifth IGDS Executive Seminar held in Mumbai.
Participants in the course will be 40 managers from various functions who are involved in key decision making areas. The course focuses on implementing strategy-level decisions through competitive assessment, financial and productivity analysis, assortment planning, merchandising management, and creating an effective corporate culture. Shoppers’ Stop is strategizing an employee retention scheme by partnering with B-schools like Symbiosis and Manipal Institute to provide professional degrees to its ground level staff.
The retailer is investigating ways to finance its employees’ degrees at the shop floor level in order to provide career development opportunities. While the company has previously offered enhancement programs, they now plan to expand these offerings. They are currently in discussions with universities and B-schools, including Symbiosis and Manipal, to establish the curriculum and financing options for two-year MBA programs. Additionally, Shoppers’ Stop is addressing high attrition rates in the retail industry by making adjustments to salaries in order to retain staff.
There has been a salary increase of 20 to 35 percent for employees, but it has been realized that retaining employees is dependent on career development, salary, and working environment. To address this, the performance bonus for deserving employees has been doubled. Shoppers’ Stop plans to invest between Rs 60,000 and Rs 80,000 for a three-year graduation program, and an MBA program would cost the retailer between Rs 1.5 lakh and Rs 1.7 lakh. Currently, Shoppers’ Stop has hired 400 managerial staff members and faces a retention challenge with the majority of its 2,200 floor level employees.
They plan to increase the non-managerial staff to nearly 10,000, but it’s challenging to retain talent due to competition from other industries like BPOs. As an incentive, the leading retailer is offering additional degrees to its customer care associates. This includes onsite classes that can be downloaded on their computers, and extra hours to complete assignments. The financing options for these courses vary, from full financing to fee adjustments over time using employees’ salaries, all aimed at keeping employees with the retailing chain for longer.
