Indian department store chain Shoppers Stop opened its new concept store in Gurugram, in the New Delhi Capital Region, a 50,000-square-foot stand-alone, street-front location, with its most premium beauty offering since the retailer started in 1991.
The chain, which is owned by the K. Raheja group, also has a tie-up with The Estée Lauder Cos. Inc., and runs 123 stand-alone stores under the MAC, Clinique, Estée Lauder, Smashbox and Bobbi Brown names, and has taken over the three stand-alone Jo Malone stores in India as of September. It plans to soon introduce the Jo Malone brand as a shop-in-shop within its department stores.
The change of strategy follows the appointment of Rajiv Suri as managing director and chief executive officer a year ago, who is focusing on an omnichannel approach.
Suri also launched a retail concept store, Arcelia, focused on more premium and luxury beauty in the southern city of Hyderabad in June, with an eye on the prestige beauty market, in which fragrances are big sellers.
Of the 83 Shoppers Stop stores, 17 will redo their beauty areas by next year, with each store customizing its premium offering, according to the catchment area. In the store at Gurugram, launches include French brand Sisley, Tom Ford fragrances and Indian ayurvedic-focused brand Forest Essentials and more than a dozen luxury niche fragrances, including Amouage, Memo and Juliette Has a Gun.
Other brands such as Estée Lauder, Clinique, MAC, Christian Dior, Guerlain, Givenchy and Shiseido have new display formats, and the fragrance section with brands like Prada and Calvin Klein is differentiated with backlit fittings and bold, clear brand names for each section.
There is also an increasing number of local brands, such as Kama Ayurveda, designer Manish Malhotra’s makeup line, which is already at other Shopper Stop stores; new launch Bolly Glam, which has colorful Bollywood-inspired packaging, and masstige brands like Lakme, Chambor and Colorbar. It also will soon launch Kiko Milano.
Beauty accounts for 16.3 percent of the retailer’s revenues.
Shoppers Stop Ltd. crossed a new threshold in the financial year ending March 31, making it debt free for the first time, and giving it more freedom to re-strategize growth, particularly in the fast-changing Indian retail market with the growing number of Millennial customers, changing consumer tastes, more global brands on the market, and a fast growing e-commerce segment. Amazon India bought a 5 percent stake in Shoppers Stop in 2017, giving it a tie-in into the future.
Many of the global brands — both beauty and apparel, which have launched for the first time in India over the last decade — have had their first openings within Shoppers Stop stores.
Suri, who has 25 years of experience in Europe, Eastern Europe and the Middle East was earlier ceo of Majid Al Futtaim Fashion, or MAF — a leading shopping mall operator across the Middle East, Africa and Asia, and before that ceo of retail at Jashanmal, a premium/luxury retailer in the Gulf region.
In an exclusive conversation with WWD, Suri, casually dressed in black, spoke about the changing Indian retail market, and how Shoppers Stop continues to make a difference. “Beauty continues to be a key driver,” he said, with sales growing at 15 to 20 percent a year. He talked about plans to redesign and upgrade beauty sections, launches and the overall uptick that he foresees in the coming year.
WWD: How does this new store change the way you incorporate beauty into the retail mix at Shoppers Stop?
Rajiv Suri: We have made the entire store more premium, and also redesigned the beauty area. We have many new brands for the first time, like Sisley, Forest Essentials, and high-end fragrances like Memo and Amouage. Here we do have a wider range of offerings, the prominence and space given to luxury brands is much higher.
We’ve taken over the three Jo Malone stores and are also looking at Jo Malone shops-in-shop in our stores. We would like to open one here, because it lends itself into this catchment area, which is very distinguished. In accessories we have gone more premium as well, with Michael Kors, Coach, Kate Spade New York being launched for the first time in Shoppers Stop and many new apparel brands, including a new line launched this week with actress Disha Patani.
WWD: The beauty area looks very different from the other stores, with gondolas for all the brands instead of the beauty islands in your other stores.
R.S: Earlier we had more islands, but we believe the customers want to be able to reach out even more, and not be held back by counters. This provides a much better customer experience of touch and feel, and at the same time aesthetically looks much nicer. We started this a few months ago, but we think by March 2020, we will have 17 stores in a similar beauty format — moving from islands to gondolas. What you will find with the beauty luxury segment is that they will have a back wall and they also have a gondola so you can feel the brand presence much more strongly.
The fragrance section is also different, more brightly lit, with clearer branding. We are very keen to expose brands, we think the market lends itself to it. They love brands here, so we want to make sure the communication is clear, and when customers come into the store for the first time they know exactly where to look.
This store is a prototype of our premium-to-luxury stores and if we are successful we will open more of these in the coming years.
WWD: What makes Shoppers Stop the leader in the beauty segment? And what have been some of the key new initiatives for 2019?
R.S: Shoppers Stop pioneered the premium beauty business two decades ago when the beauty market still belonged to traditional mom-and-pop stores or even chemists.
We have a portfolio of more than 100 brands within the beauty section. One of the key initiatives over the last year has been to further strengthen Shopper Stop’s position as a premium beauty destination, we have been redesigning and upgrading the beauty sections in 17 of our top department stores. Bridge-to-luxury brands such as Bulgari, Burberry, Versace, Hugo Boss, Issey Miyake and Marc Jacobs continue to draw customers in.
Our focus has also increasingly been to enhance the experiential quotient for customers with makeovers, mini-facials and consultations, providing more than 3,000 makeup services and skin-care consultations every month through our beauty footprint in India. Additionally, we have rolled out more than 200 makeover marathons offering glam stations, skin-care consultations, makeup tutorials and master classes in the last 18 to 24 months with leading and emerging brands.
The trend also continues on our omnichannel, with monthly online beauty sales growing at more than 100 percent over the last year. We retail our masstige and bridge to luxury brands in beauty through our own e-commerce platform with a reach of more than 25,000 pin codes in India. With more than 70 million visits per year on our web site and app, we plan to leverage it further with our omnichannel presence and services such as click and collect, ship to store and return at stores available across more than 40 stores.
WWD: Shoppers Stop’s earlier launch of Arcelia as a premium beauty destination almost 10 years ago didn’t work out. How do you expect it to be different this time?
R.S.: I believe there is still a huge potential for prestige beauty. We think that Arcelia can redefine beauty retail to become a gateway to inspiration and build the luxury market in India. This will help us to enhance the experiential quotient in-store for luxury brands in skin care, color cosmetics, fragrances and accessories.
I think that the earlier concept was just ahead of its time; it was too early in the growth of the market. Shoppers Stop is known for its innovation. We come up with an idea, we try to implement it, sometimes you’re ahead of the market; sometimes you’re on-trend. I think now we’re at the juncture where the consumer has matured and is pretty savvy globally and wants to test new things and is much more aspirational — so from a timing point of view we think it is good. Also, the store is much tighter, we’re not going to open these mega-size flagship stores. This one is 3,500 square feet, and the ideal concept will be smaller than that. It is mainly beauty, about 80 percent.
The new store is in GVK mall, in Banjara Hills, in Hyderabad, where the adjacent consumer has a high per capita income. Hence the opportunity of location, the opportunity of testing it in a place where we would have the right per capita right around you.
I think we are at a point where we believe there is a right market for it, but there isn’t enough of a consumer experience for it. We believe that we will be the catalyst who will create that luxury market back in India. The store we have opened — Arcelia, in Hyderabad, is the first step toward it. We have Christian Dior in it — they are back — we have very high end fragrances.
WWD: Has the growth of the beauty segment at your stores kept up with the market pace?
R.S: We have seen a consistent year-on-year growth between 15 and 20 percent, one of the fastest among other categories. Overall beauty sales contribution stood at 16.5 percent for the financial year [ending March 31, 2019]. Building on the momentum, we will continue to grow with mid-higher double-digit year-on-year.
Beauty brands take the prime space in almost all of our stores and are placed at the entrance.
As a department store, we offer a full solution to families, and while beauty is important and a fast-growing category, our focus is on bringing a curated and premium selection to consumers as our ticket size is higher than other players offering this category. We are focused on bringing the right brands and experiences to our customers as they are looking for the best and are looking for advice and indulgence at our stores.
WWD: Color cosmetics seem to have overtaken fragrance as the fastest growing category in India?
R.S: Yes, color is the first port of call, and masstige is the first port of call and the easiest one, fragrance is second and then skin care, which still needs more customer education required and more of a evolution. We want to focus more on skin care because we believe that once you have a relationship with skin the customer keeps using it.