Chief Marketing Officer | 08 Jul 2009
There will be more players in future and the share of organised retail will go up. My personal view is that there will be consolidation in the industry and only strong players with good international experience and financial clout will survive. Retailing is a high cost business, because apart from high rentals, there is monies involved in advertising and to engage consumer 36 weeks a year. This could be in any form, be it promotions, consumer convenience, loyalty programmes, etc. Hence, a strategic approach to marketing is required rather than a calendar led marketing.
Shankar Suryanarayan is the Chief Marketing Officer for the entire Landmark Group, comprising – Lifestyle, Home Centre, Max Fashion and City Max. In this capacity, he provides strategic direction to the marketing and brand-building initiatives of all brands of Landmark Group.
Prior to this, Suryanarayan was General Manager - Sales and Marketing at Lotte (formerly Parry’s Confectionery), where he had played a pivotal role in the turnaround of Murugappa Group’s Parry’s Confectionery and the subsequent disinvestment to Lotte, Korea. He has also held a host of high-profile responsibilities at Perfetti, Cadbury’s and BPL India.
Suryanarayan holds a Management degree as well as a Management Development Program from IIM, Bangalore.
In conversation with exchange4media’s Tuhina Anand, Suryanarayan speaks at length of the growth of Brand Lifestyle in India and the various initiatives taken to build the brand into a formidable player in the departmental format.
Q. How would you define brand Lifestyle?
There are various formats in the retail business defined by different people in different ways. Brand Lifestyle is in the departmental format. Basically, we classify the retail business into three or four major categories, including Super market/ Hyper market format, where primarily food and grocery are retailed; departmental format, where only four or five categories are retailed; then there are discount stores or smaller format stores; and then there are exclusive brand outlets. We are in the departmental format, where we retail five product categories – apparel, personal grooming, footwear, home section where we deal with furniture and furnishing and home décor. In terms of competition, we would compare ourselves to Shoppers Stop or Central as we address a segment that is slightly upper mid-market, while formats like Big Bazaar, Westside or our own Max Fashion from Landmark Group address the value segment.
Q. What is the positioning of the brand?
Brand Lifestyle in India is about 10 years old. We started off as a very flamboyant, colourful, vivid and chic kind of brand. Over a period of time, we have realised that while the upper mid-segment is important, we need to move on. We started by positioning the brand with ‘Spice it up’ and then moved on to ‘Don’t blend in’ to ‘Guide to gorgeous’. These are more of creating personalities to Brand Lifestyle. In retail, unlike other categories like FMCG, durables or services, it is difficult to create brands. The reason being that product differentiation is extremely low as we buy from manufactures and sell on MRP, either under their brand or under our brand. Hence, we need to tell consumers that we sell many brands, thus choice is much more under one roof. Positioning the brand is extremely critical.
Q. So how would you say the positioning of Lifestyle has evolved over the years?
Once we managed to convey that Brand Lifestyle was in the departmental format, we then wanted to have more clarity in our advertising and positioning to convey this. We wanted to tell our consumers that we sell five categories, including kids wear, apparel, home furniture, furnishing and personal grooming, and tell them direct upfront. Most people assume that bigger the store, the more expensive it would be. Secondly, the store was led by apparel, hence for more penetration and not be restricted to being seen as an apparel store, we moved to tell people that we sold five categories. Since product differentiation is low, we needed to work out a strategy to make consumers buy more. One way of achieving this is getting consumers to buy all categories. Having created awareness for Brand Lifestyle, we then changed the tagline to ‘Your Style, Your Store’ almost a year and a half back. This was done to build affinity with the consumers.
Q. Do you feel that retail is mainly seen as buying apparel and that getting people to buy all categories is difficult?
Consumers understood the departmental format in a narrow sense of just retailing apparel, which we had to break. Retail is all about store, location, convenience, to build and maintain loyalty with the consumers so that they keep coming back and buy all categories. Our task was to first build Brand Lifestyle and then create trials. We wanted consumers to visit the stores and also visit all our floors. If one walks into any of our stores, there is personal grooming category that leads, which then moves to ladies, men’s, kids, footwear and household categories. Our store size varies from 40,000 sq ft to 1.25 lakh sq ft, which will take 2-3 hours for any serious shopper to explore. The challenge is to create value for the customers so that they come and buy more. This is where we brought in the consumer engagement programme – The Inner Circle – that would constantly tell consumers to buy and also give them value for their money.
Q. Tell us more about The Inner Circle and how it has helped in maintaining a loyal customer base for Lifestyle?
Our loyalty club, The Inner Circle, contributes significantly to our revenue. Almost 60-70 per cent of our members are loyal. The ticket size of our loyal members is also large as they spend much more than the average buyers. We learnt that for our loyal members, the basic premise is not to earn points, but that they shop at our stores as we sell good merchandise. Hence, we redefined our loyalty programme, where the basic premise was to earn points, but we brought in a laddering process. Hence, we brought in tiers and made consumers preferred and then first among equals. We have shoppers who spend Rs 1 lakh in a year and then those who spend Rs 5 lakh, and while both are important to us, it will be unfair if we equated both in terms of rewards.
Apart from rewards, exclusive privileges were built into the loyalty programme, which could range from a diamond ring, holiday, sponsoring children’s education and preparation for some entrance exam, or just about anything, as these are feature led. We have dynamic and powerful features for our loyal consumers, wherein their high-value purchase can be converted into an EMI. So, the central idea that we work upon is a consumer laddering process, where the more you buy, the more you benefit.
Q. How do you inform your loyal customers about the various offers?
We have our contact database and we send direct mailers, SMSes and in-store communication to reach our consumers. We hold exclusive previews for our loyal customers, who can avail the offers exclusively and be the first to avail the offers. The idea is to create differentiation from plain vanilla to more competitive loyalty programme.
Q. How has your communication changed over the years?
Earlier, our communication centered on apparels, but now we have moved to include various categories. We wanted to retain our core personality of being youthful and appealing to the upper mid-base, thus reiterating by our tagline ‘Your style, Your store’. Our visual merchandising, too, changed and we focused on category drivers and showed the outside of the store to represent what is displayed inside. We have moved from being just a fashion brand to being trendy but with mass appeal.
We also made a shift towards adopting an integrated communications approach. While retail industry thrives on print, which is exorbitantly expensive, we moved to TVC. It was considered foolish as TV was considered to be a medium for FMCG or services. We broke that myth and for our entire consumer engagement programme, which runs almost 36 weeks in a year, we have been using an integrated approach equally supported by TV. This helped in improving our conversion ratio. While awareness for Brand Lifestyle was high, the number of people converting in-store was low. In retail, where product differentiation is low, high conversion is critical, and this was achieved by our rejigged communications approach.
Q. But isn't TV expensive?
Not if you look at cost per thousand, which is low and gives immense reach. However, we can’t forget print as it gives immediacy. We invested in the electronic medium and found results.
Q. This year, when everyone is talking about cutting costs, what is your take?
We are not looking at any cost cutting. We are looking at a long term strategy and at establishing our footprint across the country. We have 14 stores and are looking at taking the number of Lifestyle stores to 35 in the next three years, including in Tier I and top 10 Tier II cities. We have seven Home Center stores, which we would take to 20 in the next two years. We will be crossing the 50-stores mark, which in itself will be an achievement.
We want to create reason for consumers to come to Lifestyle and also get trials. Our marketing is different and our approach consistent. We have retained our core brand value, but tried to appeal to a larger audience. We ensure that our store layout is at par with international stores and go into great detail to achieve this. Every aspect of consumer convenience is taken care of, be it the baggage counter, The Inner Circle Lounge or the restroom, everything is done to give consumers an international shopping experience. We don’t want to portray ourselves as discount store. We want to be world class – aspirational yet affordable.
Q. How do you view the retail segment in the future in India?
There will be more players in future and the share of organised retail will go up. My personal view is that there will be consolidation in the industry and only strong players with good international experience and financial clout will survive. Retailing is a high cost business, because apart from high rentals, there is monies involved in advertising and to engage consumer 36 weeks a year. This could be in any form, be it promotions, consumer convenience, loyalty programmes, etc. Hence, a strategic approach to marketing is required rather than a calendar led marketing. For us, everything that we do is linked to revenue, more penetrations, footfalls and conversions. In the last three years, we have grown and done well for ourselves, which shows that we are on the right track.