Shoppers Stop accelerates its omnichannel strategy
In February 2020, Shoppers Stop retail business got 2% of its sales from “omnichannel”. After the pandemic took hold, the omnichannel contribution increased to 6% of sales in fiscal 2021.
During the quarter ended June 2021, omnichannel contributed 18% of Shoppers Stop salesaccording to its senior management.
“We have made significant investments in UI/UX, analytics and personalization, which are our primary focus areas,” said Venugopal Nair, CEO and Managing Director of Shoppers Stopin an earnings call on July 30.
“These developments will lead to more fluid discovery, smooth paymenta focus on distinct categories, clear brand strengths and more,” he added.
The company reported a loss of Rs 104.9 crore in the first quarter of FY2022 on a top line of Rs 269.5 crore. While revenue was approximately 67% higher year over year, it fell more than 60% sequentially due to lockdowns in Maharashtra and Kerala apart from COVID-19 restrictions in other parts of the country.
The company’s stores operated on 28% of qualifying days in the first quarter. It has 244 stores in 47 cities and generated approximately Rs 44 crore in e-commerce revenue in Q1 FY2022. Nair said 75% of this e-commerce activity comes from its website and apps.
Against this backdrop, Shoppers Stop’s omnichannel push is helping the company grow its business. “As the physical stores were closed, we engaged our customers through our omnichannel business“, Nair told analysts on the earnings call. “We have continued to benefit our customers, and our business has benefited from this process in the move to omnichannel.”
He invested Rs 10 crore towards omni channel in the first quarter and made two key management appointments. Sreekanth Chetlur joined Shoppers Stop as eCommerce Director in July and will also see its operations omnichannel, while Sandeep Narain is Retail Director the company.
Narain’s previous stint in retail was in Kuala Lumpur, Malaysia, while Chetlur was Head of Digital at PT Matahari in Jakarta, Indonesia. Before that, Chetlur led omnichannel at Landmark Group after stints at Limeroad.com and Yebhi.com. “These are extremely talented people with a proven track record,” Nair told analysts.
With omnichannel, Shoppers Stop gives customers the ability to shop and engage with its brands online, and the experience of trying on clothing or beauty products in a physical store. “The opportunity to engage with us through our stores and online gives us an added advantage in terms of being able to serve our customers,” Nair said.
While much of the activity will take place in its stores, Nair said orders and intent usually come from its website or through an app.. And vice versa: customers can try the products in store and buy them online. Transactions like these will account for up to 25% of Shoppers Stop sales by fiscal year 2024, he added.
“The rise in omnichannel and beauty sales is quite encouraging, with an improving share and a goal to significantly increase its reach and product portfolio,” said Aliasgar Shakir, research analyst at Motilal Oswal in a report dated July 30.
“But a greater presence in shopping malls, drop in attendanceand regular closings of underperforming stores raise concerns about store profitability“, Shakir added.
While the company regularly seeks to build more than 20 stores and increase its presence in emerging cities, we must prepare for confinements. Thus, omnichannel growth will be vital in the coming quarters.
Shoppers Stop supports the strategy with Jarvis project, a data and analytics lake project, to maximize its understanding of customer behavior and preferences. “This (will allow us) to personalize offers for them, with products according to their preferences,” Nair said.