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Will Pantaloon’s retail innovations help replicate success?

Big Bazaar, Food Bazaar, Gold Bazaar and soon to debut Shoe Bazaar. Pantaloon Retail India is looking at all possible avenues to grab as what Mr Kishore Biyani, managing director, Pantaloon Retail India puts it - the maximum share of the consumer’s wallet. While formats like Big Bazaar which is a hypermarket discount store and Food Bazaar, which is a food retail format gets acceptance given the nature of products they sell, the question is whether formats like Gold Bazaar and Shoe Bazaar will also find such success.

Grocery and food businesses ensure that the consumers purchase not one product but buy their monthly requirements, but purchases like shoes and gold are purchases, which are not regular in nature. So what does Pantaloon need to do to ensure retail formats like Gold and Shoe ensure footfalls throughout the year? Mr Ambrish Chheda, chief - business development, Pantaloon Retail, was not ready to divulge the game plan which he is readying for Shoe Bazaar. Neither was Mr Biyani willing to talk about it.

But the launch of the co-branded credit card with ICICI Bank provides interesting insights to what could be the gameplan: a wide array of product offering and services to entice the consumers. The credit card which offers credit facility to Big Bazaar consumers will be rolled on to Food Bazaar and then possibly to Shoe Bazaar consumers, revealed Mr Biyani. There is a facility for the co-branded credit card users to order through telephone, which in due course will be rolled out to all the customers frequenting Big Bazaar. Mr Biyani said the company is working on a online ordering system where consumers can log onto the Net and order online. So in effect Pantaloon is looking at all possible avenues to service the consumers, be it telephone, the Internet or the on floor shopping experience. “Services becomes an integral part of the retail venture of Pantaloon as they will be the differentiator along with the product range which the retail formats have to offer,” said an analyst at a consulting firm in Mumbai.

Traditionally gold is purchased by Indians during festivals or occasions and its a one time investment by them. The buyers (read consumers) have a budget in mind and they will stick to that and very rarely buy on impulse. So in this scenario how does Gold Bazaar ensure that there is a steady stream of footfalls which convert into sales thereby realising the investments made in such a venture. Mr Biyani countered this by saying that the products on offer cater to consumers having varied purchasing power. “The price ranges from the low to the high priced products. Therefore we are covering the entire consumer pie through this enabling us to keep the momentum,” said Mr Biyani. The challenges howver comes in making the customers switch their loyalties to Gold Bazaar and that’s where the service and the quality element comes into play. Because families in India who purchase gold do so from jewellers with whom they have built a relationship spanning years. Therefore in order to start building a relationship, services like ensuring the quality through ‘Karatmeter’, insurance of the gold purchased through ICICI Lombard, fixed making charges, free cleaning and maintenance warranty and cash back guarantee within 15 days are being offered. And to get the crowd to Gold Bazaar, the company is looking to strategically position these outlets at Malls and shopping arcades in tandem with Big Bazaar instead of establishing stand alones right at the onset. The rationale is people who stream into the malls or Big Bazaar would definitely be interested in taking a look at the wares on display at Gold Bazaar.

Shoe Bazaar would be the latest retail format in the repertoire of Pantaloon. While the top brass at Knowledge house are tightlipped about the strategy which Shoe Bazaar will follow, one can definitely guess that it will be a large format store with a range of offering from the lowest to the high priced footwear. However even here, Pantaloon will have to fight the competition from the local retailers as well the outlets of footwear companies. The positioning of the Shoe Bazaar will also be in tandem with Big Bazaar and Gold Bazaar in the shopping malls. Agreed R Jayakumar, director - ratings, Fitch Ratings India, who said that the going could be difficult for Shoe Bazaar given the wide spread of shoe retail in India, where more than the brand loyalty, it is comfort and quality at a reasonable price which matters for consumers. “The positioning will be important and herein Pantaloon will look to have all formats under one roof to rake in the maximum footfalls,” said Mr Jayakumar. One strategy to attract the crowds could be make Shoe Bazaar a one stop shop for major footwear manufacturers to sell their wares. Individual companies could be invited to set up shops in the Shoe Bazaar outlets. “Pantaloon could sell the space to footwear manufacturers just like shop-in-shops. Also private label programme in footwear which Pantaloon could consider, given the fact that if they can offer consumers quality products at competitive prices, the customers definitely would be interested. Of course, the kind of services which is different will also be a key determinant. At the end of it shoe retail is a high volume low margin business. That’s what Pantaloon will have to keep in mind,” said Mr Jayakumar. Thus a plethora of offering is being readied by Pantaloon. The rapid expansion is now being backed up with services to keep the consumers loyal. Only time will tell which arrow from the quiver will find the mark and which will fail.