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Pantaloon sees value, lifestyle retailing focus spurring further growth

MUMBAI: India's retail market is burgeoning and leading manufacturer-retailer Pantaloon is riding the wave, confident that its already impressive growth trajectory will pick up even more pace.

 

 

PRIL marketing head Sanjeev Agrawal

Pantaloon Retail has been in the forefront of the retail growth in the country since it opened its first Pantaloon store in 1997 in Kolkata followed by first Big Bazaar in 2001. In a short span of three and a half years, Pantaloon Retail India Limited (PRIL) has opened 13 Big Bazaar hypermarkets. Today, the chain also boasts 13 Pantaloon stores, 23 Food Bazaars, and two central operational point across the country.

Says PRIL marketing head Sanjeev Agrawal, "The pace of growth that we have taken is very strong and we are working on a situation where we are able to consolidate on our achievements in a rapid manner. Now we have got the requisite learning and understanding of the Indian consumer and the retail environment, so we want to capitalise on that and grow faster."



PRIL's Central in Bangalore

The company's core focus is lifestyle retailing and value retailing. In the lifestyle retailing segment there is Pantaloons and Central and in value retailing there is Big Bazaar and Food Bazaar. Agrawal says, "Each of these has different business segments and customer segments. One of the thing that links all of them is the focus on the customer. We try and understand the needs and expectations of the customer in each of our outlets and fulfill them in each of our formats."

 

 

'Sophisticated response modeling' won it for Carat

Elaborating on the company's recent shift in its media agency from Insight to Carat, Agrawal says, "We are spending almost Rs 300 million on media and that spend is growing at a rapid pace. What we needed is a far stronger ownership of the media spends. Obviously, we have a strong ownership within the organisation but outside the organisation our partner (media agency) has to have as much of ownership in terms of the return that we are getting from the money that we spend."

 

 

Big Bazaar

What clinched the deal for Carat was its pitch on return on investment (ROI) and response modeling. As far as ROI in the retail sector is concerned, it can be in two ways - either top line growth or the number of footfalls. "It is quite easy for us to get confused between what the creative is delivering and what the media agency is delivering. However, as professional managers we need to be able to differentiate between the deliveries of the two and get the best results. It's really in that space that Carat on their own initiative showed a fair amount of sensitivity and did some work, which we found very good to take it forward," says Agrawal.

What Carat tried to do was link the advertising expenditure to the footfalls through the 'sophisticated response modeling' to be able to say what works well and what doesn't. If one takes the creative as a constant factor, the variation in the footfalls would be because of the media activities or because of the festival seasons. "When we have data over a period of time, we can nullify the effect of the festivals and holidays and what is really left is the media weight and to be able to say which media vehicles are delivering in terms of footfalls and business is what matters at the end of the day," says Agrawal.

Talking about the effectiveness of media agencies today, Agrawal mused that as an industry, media agencies in India do not have very high levels of accountability. "Whenever the question of accountability comes in, it is raised only towards the creative agency, whereas the media agency is only questioned on rates. This is really incorrect because what the media agency also needs to deliver is business results. Today the whole industry is focused on cost efficiency. While there is a certain amount of shift in terms of qualitative aspects, accountability of media decisions is still very low in the industry."

As far as new format launches are concerned, the company will not be expanding as it already has a gamut of formats under its umbrella. However, apart from rapid expansion in terms of the number of stores in the country over a period of time, PRIL is also looking at other ventures in the near future which, Agarwal pointed out, was a bit too early to talk about.

Focus on customer, not competition

Loathe to talk about competition, Agrawal says that since retail is at a nascent stage in India, PRIL will not be overtly focussing on competition as it would lead to "narrow-mindedness" in their approach towards the business. "What we are looking at is the approach towards the customer and focusing on customer satisfaction per se and hence we are de-linking competition from our approach to growing the business," he emphasised.



No celebs here!!

While on the advertising front, Pantaloons' competitor Provogue has Bollywood star Fardeen Khan sprawled across hoardings as their brand ambassador, Agrawal is of the opinion that since PRIL's core agenda is to try and build a fashion brand for the people, which is wearable, celebrity endorsement didn't feature into their scheme of things. However, PRIL has had some cricketers like Steve Waugh, Mark Waugh, Hansie Cronje and Sanath Jayasuriya in ads.

"On Pantaloons, we will continue to focus on fashion and apparel and therefore build imagery for us, which is fashion oriented. And for Big Bazaar, we will continue to focus on our core proposition - "Isse Sasta Aur Achha Kahin Nahi" (There's nothing cheaper and better than this). That's the core of each of these two retail formats and that's how we will continue in our advertising," he stressed.

Keeping this in mind, the vision ahead for PRIL is to look at products and innovations that give the company an edge in the consumer mindspace.

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