Shoppers' Stop aims to leverage brick and mortar strength

Venkatachari Jagannathan
04 September 2000

The virtual store will be a boon for people who want to send gifts to their loved ones living and within and without the city. Expecting sizeable business from this segment, Shoppers' Stop is tying up with support service providers to over come the myriad complexities involved in logistics and back-end operations.

Says the company's general manager – information systems, Anish Shah, "We have made arrangements for logistics, payment gateways and call centres for goods ordered over the website." However, virtual store transactions will be initially restricted to the cities where the company has its brick & mortar outlets. Interestingly, the `virtual store' -- a Net-enabled computer -- will be there in every Shoppers' Stop store, enabling a shopper to order on the web, specifying the place of delivery after seeing the goods in the physical store.

Shoppers' Stop, the first retail chain in India to invest on an ERP package, is again investing heavily on software. This time around, the company is buying a software package called Arthur Planning, and a data warehousing solution from JDA, USA from which it bought the ERP package. "Arthur Planning is useful in measuring the stock position at the store shelf level and for auto replenishment of the shelves," Mr Shah explains.

That aside, the software package helps in studying sales patterns and identifying slow moving items and the reasons thereof. According to Mr. B.S. Nagesh, managing director and chief executive officer, Shoppers' Stop, the chain enjoys a comfortable stock turnover ratio of six times. The company's six stores and three warehouses are networked with the corporate office at Mumbai.

Apart from the virtual shop, Shoppers' Stop is to open its second store in Mumbai and Hyderabad next month. "This is to increase our catchment area," reasons Mr Nagesh. Though stores of this kind are termed as destination stores, in reality people are not willing to travel beyond five kilometres to shop, he adds.

After registering a turnover of Rs 160 crore for the year 1999-2000, Mr Nagesh is targeting sales of Rs 270 crore and a net profit of Rs 16.2 crore in the current fiscal, on an equity capital of Rs 24 crore. The company had privately raised Rs 60 crore from financial institutions and venture capitalists. As per the plans on the drawing board, Shoppers' Stop plans to have around 23 stores by the end of 2004, with major cities having multiple retail outlets.