‘That online retailers are unbeatable in terms of price is not a fact’

BK Shankaranarayan, CEO, Viveks, talks about service-centric approach in their latest initiative, Home Serve App

e4m by Simran Sabherwal
Published: Dec 23, 2020 9:09 AM  | 6 min read

Started as Vivek & Co. in 1965 with a single store in Chennai, and selling fans, radios & other small appliances, Viveks today has evolved as a major consumer electronics and home appliances retail chain that operates more than 25 showrooms spread across six cities in Tamil Nadu. Currently, the company has four retail brands, namely: Viveks, Home Serve, Jainson, and Viveks Locker.

However, the retail sector and Viveks was hit hard during the lockdown, on account of the ongoing pandemic, with the stores remained shut from the last week of March till early May. When the stores re-opened, there were apprehensions among both - the retail players as well as consumers. In addition to new safety and hygiene guidelines, the retail sector was also impacted by restricted shopping hours heading into the festive season. What helped Viveks was the demand for durables. According to BK Shankaranarayan, CEO, Viveks, “In May, sales were down by 25% (YoY), in June, we were down by 10% (YoY). Post that, we have seen a growth. Air conditioners and air coolers contribute to a large part of our business and the summer months of April and May account for 50% of our annual air conditioner sales. While these two products were hit, the other durable products saw high demand and with the arrival of the festive season, we were back to last year levels.” What also helped in driving buyers to Viveks’ was the month-long ‘Anbudan Viveks’ Festive Sale during Navaratri and Deepavali.

Commenting on the consumer trends that took precedent during this period, Vishal BS, Vice President - Marketing, Viveks, says, “Consumers have become value conscious. With money being a concern for many, what really helped were NBFCs and the credit card schemes. The EMIs offering encouraged customers to come back and invest in better products.”

With work-from-home becoming the norm, consumers looked for products that guaranteed convenience and blended with the change in lifestyle. A key consumer insight was the rise in the value of purchases, not the number of buyers - resulted in the purchase of bigger TVs, fridges, washing machines, etc, and a rise in new product segments - dishwashers and robot vacuum cleaners, OTGs, etc. Viveks saw sales of dishwashers and OTGs increase by more than 300%. The retail player stocked products from Philips and Panasonic in the personal care/grooming segment. Soon, Viveks realized this wasn’t enough to meet the demand, and took up Havells and Vega products. The company now offers consumers about 50 SKUs in this category as against 20 SKUs earlier. Kettles and blenders also did very well.

Building The Consumer Connect

Traditionally, Viveks marketing efforts were skewed to Print, but the pandemic resulted in Viveks adopting digital in a big way with the focus being on the consumer buying the product on the platform they are present. Says Vishal, “In the first few months, we adopted a one-on-one communication strategy through SMS, Whatsapp, social media and offered on-call support. Though consumers wanted to purchase products, many were hesitant to visit the stores, so we provided the option of video calling on Whatsapp and Zoom and many transactions were processed through these mediums.”

Looking at spends, the share of ad-spends on Digital has increased from 10%-12% to 30% - 35%. Adds Shankaranarayan, “Print publications have come back with the best deals ever in the last five years. We will maintain Print and with the savings accommodate the other channels. If Print had not reduced prices, we might have reduced spends here to spend more on digital.”

Taking on Online Retail

Over the years, Viveks has built its brand on quality, trust and customer satisfaction. In February, the company also revamped its website, viveks.com, which was e-commerce enabled. This move proved to be beneficial as Vishal states, “We started seeing traffic on viveks.com in May. Our traffic has grown by at least 200%-300% and the number of inquiries has shot up. We launched Whatsapp shopping facility in July and on an average we are conversing with about 5,000 customers in a month.”

However, even though online retail is eating into offline retail space, Shankaranarayan says that barring some products on-ground retailers can match the rates offered online. He says, “Consumers feel that online is the best place to go to as you have an unlimited range and get the best in price. In reality, online beats offline on price only on the models they advertise which they offer at rock bottom prices. Online retailers have created a perception and imagery that they are unbeatable on price. That's not the fact. Street player retailers can match most product prices, it's not difficult at all.”

Service-centric Approach

Viveks latest initiative is the Home Serve APP, part of Home Serve - a one-stop solution for all home maintenance needs. With competition like Sulekha and Urban Company firmly entrenched in this space, the retailer is banking on consumer’s trust and comfort level with the brand, and is looking at targeting its existing database to promote its new offering. Currently, Home Serve caters to 2,000 service requests on a monthly basis and this is expected to see a spike. Shankaranarayan says, “We will be launching with specific discounts. Every service currently has a fixed price which is the market rate and we are launching with the best-discounted prices to gain traction.

Gearing Up for New Year and Pongal

Viveks has been a pioneer in India when it comes to retail innovation, be it the New Year Super Sale in 1977, Rush Hour Sale, Viveks Warehouse Sale amongst others. Viveks is optimistic as it gears up for the New Year Sale followed by the harvest festival, Pongal. Shankaranarayan says, “At the moment, we expect sales to be at the same level for the next one to two months. I don’t believe that Covid-19 has had a negative impact on business. If you look at the electronic segment, it is the only business that has come back to last year's level. In fact, compared to other businesses, Electronic was the best-placed business to have come back to last year levels, and achieving last year levels is fantastic for all of us.”

Looking ahead, Viveks' focus will be on Chennai and the company is looking to double its store strength in the city from the current 15 over the next couple of years. On a final note, Shankaranarayan says, “On-ground retail, particularly electronics has come back. We can see it from supply-side issues; earlier vendors would chase us, today we are chasing vendors”.

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