Brick and Mortar retail formats, Fashion Retail Stores

Types of Fashion Retail Stores :

Most of the consumers prefer to shop and browse in a Physical store rather than buying online specially those products where touch, feel, fitting and taste matters a lot. In brick-and-mortar stores, consumers can consults with employees about the products or services. Brick-and-mortar stores have the ability to offer shopping experience whereby consumers can test a product. Brick-and-mortar stores also provide consumers with instant gratification when a purchase is made.

Multi-brand outlet (MBO): These are usually large retail formats. As far as my experience is concerned after spending 17 years in the retail industry, out of which almost 10 years in Multi-brand outlets. I analyze very few benefits of Multi brands out, one of them is footfall. It could be a good choice to launch a new brand/product at MBO. In such a way without spending much at ATL marketing, while with the help of BTL marketing only you can get a good amount of customers as footfall at MBO is comparative much high at MBO. If MBO is in a metro city then High Rent & CAM as well as qualified professionals make it challenging to be a profitable venture. Although MBO in small cities could be much more profitable where customers can have a good shopping experience inside MBO with a concept rather than walking long at high street, which will be tiring. Groomed sale staff gives then required consultancy to make them more comfortable and confident.  

The Disadvantages/Risks of Multi-Branding

·         Cannibalization between the brands.

·         Confusion caused by overlapping segments that will result in brand switching.

·         The public image of you’re the brand may become profit-oriented, rather than the customer.

·         Failure due to poor management.

·         Failure from wrong business choices.

·         Difficult to justify each square foot return as MBO are forced to keep a variety of merchandise to catch different types of customers.

·         A good brand may not get proper positioning in MBO.

·         Because of the heavy flow of customers on the weekend, a big queue in front of the trial room. Long waiting sometimes makes customers frustrated especially if they are accompanied by kids.

·         System error makes customers frustrated if the scheme displayed and billing does not match. Some customers never buy again if they are not handled well at the time of billing disputes.

·         Shrinkage of theft issues is higher in MBO, which causes a good amount of loss every year. 

·         Maintenance & running expense are much higher. The complete area is not properly utilized.

Exclusive brand outlet (EBO): If we study success rate of organized retail, names which reflects in our mind are only and only EBO like Zara, Mango, H&M, Nike, Lee, Levies, Louis Vuitton, GUCCI, Prada, Chanel, Ralph Lauren, Burberry, House of Versace and many more. If we talk about Indian retail then too only a Few names we can count which are again EBO for example, Biba, W, Global Desi, Fab India and many more. 

·         Brand DNA can be maintained in EBO.

·         Majorly customers are brand loyal & does shopping without wasting must of the time

·         Customer creates a good relationship with sales staff and their relationship make them loyal customers.

·         The public image is more customers oriented.

·         Management is better and each square foot is properly utilized.

·         Uniformity of store layout and product line which makes connect better & trust more to brand anywhere in the world. 

·         Customer handling is better & management is easy.

·         Running expense is comparatively low, as each square foot gives the required result.

·         Space is comparatively small to manage better.

Hypermarket: In most of the case-study in India we found out such format profitable. Per square feet, the sale is almost 10 times compare to another retail format. The following are key features of the hypermarket.

• Top line (Turnover) attracts but Bottom-line (margins) are too low.
• One-stop-shop under one roof for all your daily needs from grocery, food, vegetable, kitchen, apparel, home, house cleaning product, and equipment. 
• You may not get occasion-specific apparel & electronics also up to a certain extent. 
• The customer gets better deals and offers at hypermarkets as they can negotiate better from manufacturing companies due to a higher volume of the same.
• A very proactive approach is needed to replenish stock without increasing warehousing costs. 
• Software support is needed to understand OTB and out of stock inventory before facing the loss of sale. 
• Margins are low; volumes are high due to repeated customers every week.
• Cross-selling is easy. The bulk sale is more promoted by giving extra benefits.

Hypermarkets are more focused on food-related items to serve the daily need. Other sections are majorly impulsive buying and the customer usually doesn’t plan to go hypermarket for buying clothes or electronics. Big Bazar and Spence are the two major successful players in the Indian market with a bigger business share. Other brands like Vishal, V-Bazaar, V2 are other known hypermarket Stores in Smaller cities, which has better cusses rate in the apparel segment as well.