This week as the nation gears up to two major Bollywood releases and as the movies get ready to take on each other at the box office for the share of our time and money, I could not prevent my mind from wandering beyond what these movies actually could offer us. One look at their titles and the thought goes to what they literally mean- one is Raees, the rich and noble one and the other is Kaabil, the one who is capable. Do they mean two different things? Of course they do, but aren’t they somewhat correlated when we talk of business, where one could lead to the other! If we look at the world of fashion in India we have a plethora of brands, some of them bigger and more popular than the others. Behind their successes, there are great stories of passion, commitment and hard work. These brands have earned an identity of their own in the mind of the consumers and many of them have left huge footprints in the market place through exclusive stores, impactful marketing and great product development. Considerable investments would have gone into building these brands, which would have paid off over the years in terms of profitable growths. For the purpose of this discussion let me take the creative liberty of calling them Raees Brands. Having said that, how do we look at the rest of the brands? Each brand has a unique set of attributes, which make it different from others, many of them have their sweet spots with their target customer and have the potential to be much bigger in future. These are the emerging brands, which, I would refer to as Kaabil Brands.
How are they different?
An apparel brand is built with interplay of art and science, with elements of product design, sizing, market development and all such activities leading to the total output. Having been in the industry for a few years, I can say with conviction that a fashion brand is not just about the size of business i.e. the bigger brand need not be the better one. However, brands that have truly arrived on the stage tend to be bigger; they would have built unique identities for themselves and also get associated with certain lifestyles and needs. They would sell different product categories like shirts, trousers, jackets and even accessories like footwear and ties. They, in fact, offer you the complete ensemble that suits your needs. The brand representation will be clearly visible in their flagship stores managed by the brand owners themselves and many of them become marquee labels and household names. The Raees brands will be present in multiple channels like exclusive stores (EBO), multi-branded outlets (MBO) and large format stores (LFS). In fact, big business houses in the fashion space in India have their own online selling platforms too.
Many of these well-known brands enjoy huge amounts of consumer confidence and they get to charge a premium for the products from the consumer. This is an advantage the lesser-known brands may not enjoy as much. For a garment with a similar fabric base and styling detail, a Kaabil brand may not be able to charge the same as a Raees brand could. These lesser known brands mostly sell in MBOs and need to stand out in a clutter of brands. In many cases the consumer will not recollect the brand label as much as the name of the store it is bought from. I have noticed that many of them are single category brands and they owe their origin to expertise and passion behind one type of product like shirts, t-shirts, jeans etc. Once they get established in that category some of them move into the next stage of evolution by offering complementary categories too. So behaviorally, these two types of brands could differ in product mix, retail strategy, advertising presence and even scale of business. However, I would like to look beyond these aspects and say that the difference lies in how much do the consumers know them by their name and how well they are known for what they are really good at.
The Channel Dynamics
In an MBO which stocks products from emerging brands, the consumer pull is often generated by the store and not the product and therefore the name that is well-entrenched in the consumer’s mind is that of the retailer. In the current retailing environment, there is a lot of power and consumer-connect that the MBOs enjoy and as a brand evolves, it starts finding its presence in more prominent multi-branded outlets too. In fact, I have seen the strength of a brand being seen as a criterion for many MBOs to offer them more shelf space. Having said that, one acid test for a brand to attract customers is in its ability to successfully run a network of EBOs. The exclusive stores with their fine retailing environment act as strong ambassadors for the brand and provide credibility and strength to the story it tells of itself. As a consumer, one gets to see the entire glory of the brand in its EBOs and that is where a loyalist of the brand is expected to shop.
EBOs offer many advantages to the brand other than the obvious ones already stated above. They offer good quality information to the brands in terms of consumer off-takes of specific styles, as inventory data is available till that point. It is also possible in this channel to track customer purchases over time and understand them better; this helps the brand in designing reward programs around these data. This channel, however, is expensive to maintain as the operational and capital expenses are incurred by either the brand or franchisee partner. As a result it is important that the EBOs attract customers and achieve the sales goals while restricting the expenses to desired levels; in fact, many brands look for their own desired mix of EBO and MBO contribution to sales to get the overall profitability they seek.
Changing Consumer Dynamics- Showrooming and Webrooming
Did we miss anything in the article so far? How about technology, the great leveler? All the while we have been speaking of brick and mortar formats and how the consumer shops from different channels in high streets and malls. If we look at how the sales heads of brands plan their numbers these days, one word that used to be a part of the plan as a formality earlier, is now getting more significance – ‘Online’. E-Commerce has grown steadily in India and fashion is also enjoying a good share of online buying behavior in consumers. While statistics on online shopping are readily available, I wish to dwell on two behavioral patterns of the internet-enabled or the mobile-assisted shopper- Showrooming and Webrooming.
Showrooming is what happens when a customer visits a store to experience a product and then makes an online purchase later. This behavior often comes when products of clear specifications need to be experienced for the customer to know how it feels, and then he looks for a better deal online for the same product. Webrooming is the reverse of this, where a customer searches online to decide on the product to buy and then makes a purchase in a brick and mortar store. This works typically when the search is to be narrowed done from a wide range of options, which can be achieved by the convenience of online reach. In fashion purchase, unless you are very familiar with the collection and the brand, it is important to know the product fits and the tactile feel of the fabric. Therefore, shopping at a neighborhood store after searching on your mobile is going to be a significant trend.
Building a Brand Today
India has embraced the smartphone way of life and with improving internet infrastructure, we can be rest assured that the consumer is going to use the internet more, in fashion as in the case of other categories too; either to reach a shopping destination or to do a pre-purchase research. Therefore, connecting with the net-savvy customer is important for any brand in India, considering the low median age in our country compared to other large markets of the world. Technology can bring all brands on to a common platform. The online medium is very cost-effective and can help a Kaabil brand to come up, and become Raees in future even if it not one now!
