<FONT COLOR="#FF0033"><B>Franchise & Retail Opportunities 2007:</B></FONT> The ‘speciality retail’ way of addressing specific consumer needs

With the retail sector experiencing a boom, the 4th edition of Franchise & Retail Opportunities highlighted clear insights and the growing importance of retailing and franchising. The session on Speciality Retail emphasised the opportunities for retailing and franchising in the speciality sector. It also stressed the idea of acknowledging consumer preferences and attracting a large base of customers who have specialised needs for specific products and services.

The speakers for the session were Ajay Mehra, chief executive officer, Times Retail; Alok Banerjee, chief executive officer, Carmichael House; Atul Jain, chief operating officer, Twenty-Four Seven Retail Stores; Gautam Sahni, executive director, US Dollar Store; and Vishal Lohia, executive director, Office1Superstore.

He said that the acid test for any specialised retail chain is to maintain a common identity across all its stores so that the consumers are not able to differentiate between franchised stores and company owned stores. Planet M has 67 stores across 36 cities in the country and they share a common identity. Of these 67 stores, 50 are company owned and 17 are franchise based.

Planet M’s franchising model is based on the sharing method. It ensures that there is equal partnership with the entrepreneur who owns the franchise. This equal partnership is based on shared risks, shared investment and shared knowledge. In addition, Planet M provides support to entrepreneurs with respect to promotions, training and inventory management.

Alok Banerjee, chief executive officer, Carmichael House, talked about opportunities in home-fashion retailing. Carmichael House is a speciality retail store that deals in home fashion goods. Home fashion includes soft elements required to decorate a home.

He stated that the home textile market in India is growing at a rate of 6-8 per cent and is currently estimated at Rs 8,000 crore. It is also estimated that the housing sector, which will see the setting up of 1.5 million housing units in the next year, will directly create further opportunities worth Rs 500-700 crore for the home textile market.

Banerjee pointed out that there has been a reduction in the home ownership age from 45 to 30 years in the last decade, and that consumers have become more fashion conscious. To cater to such consumers, there is a need to have organised home fashion formats. The existing retailers have become outdated because they still follow the traditional way of opening and showing bedsheets.

Carmichael House stocks goods in a way that allows customers to select what they like without having to open it. It targets consumers in the mid to premium segment and has 30 operational stores in 15 top markets in the country. The brand is being endorsed by Indian film actress Sushmita Sen.

Atul Jain, chief operating officer, Twenty-Four Seven Retail Stores, voiced the need to have 24-hour convenience stores because of the hectic schedules of city lives. He said that people are extremely busy with work and do not get the time to buy items of daily requirement. By the time they get back from work, it’s already closing time for most shops and stores.

The model of Twenty-Four Seven Retail Stores is based on the convenience of customers, as they are located in areas close to housing societies. Unlike a supermarket, customers don’t have to park their car half a kilometre away and walk down. Without wasting time, they can merely hop out of their cars and quickly buy the required things in five minutes.

Twenty-Four Seven Retail Stores target consumers in SEC A and B in the age group of 21-35 years. They stock goods such as ready to eat foods, beverages, personal care products, packaged goods, magazines and stationery. The stores also provide the convenience of booking theatre and movie tickets, paying mobile bills, courier service and pharmacy. Some other examples of 24x7 stores are 7-Eleven in the US and am/pm Japan.

Gautam Sahni, executive director, US Dollar Store, discussed the scope of single price stores in India. The rate of sales in such stores is determined by the number of footfalls. The stores are targeted at middle income people and follow a single price, Rs 99, for all their products.

Sahni adds that not all brands and products are fit for this kind of model. However, shopping is like a minor treasure hunt for the consumer, who is always looking out for the best deal at the price of Rs 99. In India, there are 12 Dollar Stores at present.

Vishal Lohia, executive director, Office1Superstore, concluded by giving the example of speciality retail in office supply material. Office1Superstore is based on the B2B format and has a product range ranging from pins to paper to printer cartridges. Office supply is a little organised category, but is expected to be more structured by 2010, when the organised retail market will have a share of 15-20 per cent. Office1Superstore is not a stationery store, but a comprehensive office supply store. It has close to 600 stores in 40 countries across the world. It was launched in India in 2006 and five outlets are operational now.

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