{Presented below are excerpts from an interview with B. S. Nagesh, chief executive officer of the Shoppers' Stop group of department stores. Click here for profile on B. S. Nagesh}

On his belief in the retail format
B S Nagesh was always fond of the retail side of marketing. Even back in business school, he did a summer project on consumer buying behaviour for a company, which, ironically, was to become his employer eight years later. This was Carona Limited, for whom he did this detailed report.

His love for retail always saw him in the forefront of the sales activity, wherever he worked. At Blow Plast, as a case in point, he stood behind the counter for various dealers and actually sold units when he could well have sat behind his desk and relaxed.

The belief that a supermarket or self-service department store would work came to him during his stint with Carona. Here, while trying to enhance the customer experience and make a substantial difference to the way in which people bought shoes, he found that people readily accepted the self-service format he introduced in many stores. He noticed a great change in the buying behaviour of the consumers and an increased propensity to purchase when they were allowed to touch and feel the products without the active intervention of sales attendants. He was convinced that supermarkets or departmental stores would work.

On his early days at Shoppers' Stop
It took only one meeting that lasted several hours for Nagesh to get convinced he had to join the Rahejas. His meeting with the head of the group, G. L. Raheja, convinced him about their interest in the project. Further, he was so impressed by the attitude of Mr. Raheja and the manner in which he treated him, he was sure this was a person genuinely worth working for. Having decided, he joined the group on 1 July 1991 as a general manager, with a specific agenda to launch a super-store in three months' time.

The early days of the project were a real grind. With no benchmarks to follow, he had to literally walk the aisles, so to say, of every 'so-called' department store in the country. Here he tried to see and personally understand what made consumers come to these stores. So concentrated was his study that even today, nearly eight years later, he can vividly remember the layout and floor-plan of every department store as it then existed. His early learning from these stores was that there was no one compelling reason why consumers would go through these stores, and that a majority of these stores were dependent on consumer durables, the sales of which were first to be hit in a recession.

His study on the existing players in the 'so-called' department store segment clearly taught him a few fundamentals. As a result he decided to zero in on apparel, which, according to him, were fairly recession-proof. Further, as opposed to durables, apparels are a high-margin game and are easier to set up. In this, he concentrated on the men's section because there were established brands that he could take up immediately.

The second toughest proposition, after being able to get the right people, was to get the right suppliers. Almost all the existing suppliers believed that an organised department store of the type he was setting up would not work. They seemed to believe that qualified management professionals could never match the ingenuity displayed by the Kutchi community that seemed to dominate the retail apparel trade.

The early days had no parallels or benchmarks that the company could go by. This deficiency they decided to weather by going directly to the consumer to find our what they require. This early and constant interaction with the consumer resulted in the formation of the First Citizen's Club which, according to Nagesh, is the second largest customer loyalty program in the country – after the frequent flier program of Indian Airlines -- and which, with over 70,000 members, generates nearly 40 per cent of the sales for Shoppers' Stop.

On the brand building exercise
Shoppers' Stop as a name came into being quite accidentally. The agency which was appointed had come up with close to 1,000 alternative names. Not being able to choose any good one and with the deadline for the store opening fast approaching, one day he called up the promoters and told them that one out of the thousand names was to be chosen the following day.

That night, Mr. Raheja called him to suggest the name Shoppers' Stop, as yet another alternative. Surprisingly, when the sun was up and the people sat down to deliberate on the names, it dawned on them that Shoppers' Stop was a name that did not have any gender or any specific connotation like Kids' Kemp, Charagh Din, etc. The name was fairly neutral and seemed to represent the focus of the company. And so the name came to stay.

The agency then designed several logos and creatives based on the chosen name. Here again, the creative and logo that was rejected by the agency, was selected by the management … and the rest is a marketing case study.

On the people focus
Right from the very beginning, Nagesh was very clear that the business had to be run by the people. While it was very difficult to attract talent in the initial stages, it was very clear that no compromise would be made.

The right team took time in the making, but when it did come into being, it became the A-team that transformed Shoppers' Stop into what it is today. The company has concentrated on training its personnel into being amongst the best in the world. In the process it has created the most valuable commodity in the Indian retail industry – the human resource capital to efficiently run retail operations. So good is the training program offered by Shoppers' Stop and the people that they produce, that the company has become the favourite hunting ground for the new retail ventures that are coming up in the country.

Nagesh has built a new top management layer that has drawn people from such companies as GE Capital, Pepsi, and ITC. With a clear focus on getting Shoppers' Stop to become a global player in the retail industry, he has appointed expatriate executives from the UK in key positions for merchandising.

It has taken a lot of time building this team. More than one-fifth of Nagesh's time has been spent on recruiting this senior team, not to mention the tremendous amount of money spent on head hunters, travelling, familiarisation trips etc. These people, along with well known consultants such as KSA Technopak, and the contemporary systems being introduced, he believes, will ensure better financial control and also help the company topping non-financial parameters like customer satisfaction. Nagesh has clear goals of making Shoppers' Stop a global retailer by end-2001.

On the industry and the future for Shoppers' Stop
Shoppers' Stop has already won accolades from leading global associations. Nagesh wants to make the company a 30-store chain in the next five years with turnover exceeding over Rs. 1,500 crore.

Nagesh is very clear that the Oxford Street (in the UK) or the Orchard Street (in Singapore) format cannot be replicated in this country. One of the banes of this country is that, while the retail industry directly or indirectly has offered employment to nearly 15 million people, the basics for making the industry a winner are woefully inadequate. The key requirements of space and roads required for the above format are clearly missing.

Nagesh is sure that if the government treats the retail industry with respect, the industry will clearly play a major role in the development of the country's economy. He draws reference to the Dubai Shopping Festival, which contributes great amounts in the foreign exchange inflow and tourist traffic flow to the country.

Shoppers' Stop has taken the lead to form an industry association by joining hands with other established players like KSA Technopak (noted retail management consultants and Indian affiliates of Kurt Salmon Associates), the Piramal group (who have recently ventured into retail with their mall called Crossroads at Mumbai), Vivek group (Chennai's leading durable departmental store) and the like.

This body, currently operating out of the premises of Shoppers' Stop, will try and raise the standard of the industry in the country besides influencing government policy in making the industry more viable.

On 'brick-and-mortar' versus 'click-and-mortar'
Nagesh is of the belief that the total takeover of commerce by the click and mortar brigade is still some years ahead. While Shoppers' Stop has got into the dotcom game with its site under beta testing for a possible launch later this year, the company does not believe that it will dominate its business model.

The dot com venture, which will incidentally go beyond Shoppers' Stop's current product range, is just to keep in with the times. Nagesh is of the firm opinion that Shoppers' Stop would be in a better position to progress up the e-commerce chain since it has a brick-and-mortar backing.