Saturday, 23 June 2012

Metro Shoes aims to be Rs 1,000 crore company by 2015


Footwear retailer Metro Shoes is targeting a turnover of Rs 1,000 crore by 2014-15. For the current and the next financial year, the company hopes to churn out revenues worth Rs 660 crore and Rs 820 crore, respectively. The retailer also plans to open 43 new outlets in 2012-13 with an investment of Rs 44 crore.

“Metro is witnessing a growth of 35 percent year-on-year,” says Farah Malik Bhanji, Executive Director, Metro Shoes. Bhanji said that the expansion plan of the company focusses on tier II and III cities having a lot of potential. Some of the cities for its upcoming stores include Ranchi, Yamuna Nagar, Bilaspur, Ajmer, and Hoshiarpur.
Taking about the growing popularity of colourful footwear, Bhanji said: “The trend is fast catching up - colours have become essential! For men we have introduced and sold colours like orange, lime green, turquoise other than the conventional red and purple. In casual men’s footwear, colours would account for more than 50 percent of our sales. For women, colours have always been very important especially in the North. In summer, fuchsia and orange dominated the palette. However, we are expecting electric blue to be the new black for autumn winter.”

Commenting on the strategies that can boost margins of Indian footwear retailers, she further added that there are three factors which affect margins: effective sourcing, innovative design, and correct pricing. Bhanji said that with global sourcing being available to national retailers, it has become increasingly important to know the countries which specialise in particular types of leather, raw materials, and finished product. She also stressed on the fact that the current local consumer is fashion aware and willing to pay for cutting-edge design or innovation in technology for an enhanced comfort. Bhanji added that some categories like children’s footwear are far more price sensitive than others, thus, one would need to have a market awareness and price correctly.

She said that footwear retailers can connect better with their customers in a number of ways. “With plethora of brands in the offing, establishing and maintaining connect is the keyword for all footwear retailers. While superior product and correct pricing greatly help induce sales, branding, loyalty programmes, customer relationship management, and convenience help make the canvas bigger and create better value for them. The connect with the customers can also be enhanced by understanding them. Make a customer not a sale! Brands can greatly benefit and create a loyal set of customers if they have understood the customer's needs and provided a solution for the same. Creating convenience and a ‘delightful shopping experience’ further create a strong bond of trust which helps in customer retention. At Metro Shoes, we understand formals and heels work very well in North as compared to flats and strappy sandals in the South. This sort of understanding goes a long way in creating a product mix, advertising, and branding strategy ultimately leading to a happy customer!”

Bhanji further added that a strong customer feedback system in the network can be a boon for retailers as customers make and break a brand. She said that it is right to call them the “kings” as their word and opinions matter the most.

She also stated that there is no fixed formula on which format works best for footwear retail, for every brand has different objectives, reach, and products. Metro follows an MBO format which has worked successfully for the company. However, brands like MSL which cater to the mass market enjoy greater success via shop-in-shop formats; hence, the footwear retailer operates in that format as well.

Highlighting the factors determining the success of footwear brands in India, Bhanji quipped: “In India, understanding regional sensitivities and tropicalisation of products and in-store experience greatly pave the way for success of a footwear brand. A happy team and growth prospects within brands also encourage teams, suppliers, middle-men to perform well, overall helping to create a larger impact. Also, sound consumer knowledge and adaptation to modern retailing methods (use of latest technology, softwares, e-commerce, etc.) play a pivotal role. With the advent of various brands, customers will be able to distinguish one brand over the other only on basis of quality, service, and customer experience.”

Bhanji said that as a stark contrast to international markets where footwear for women rule the roost, Indian markets have seen a larger growth in men’s footwear. A lot of it is attributed to the cultural differences. The fact that women were and, in most cases still are, dependent on their husbands for their needs has always led the women segment to be far more price sensitive than men’s footwear. However, off late the norm has changed considerably as women are also purchasing more shoes and online shopping has greatly helped achieve convenience and shopping experiences.

“In terms of value, the sales break up for our different segments is : Men – 57 percent, kids – 3 percent, and ladies 40 percent. However, in terms of volume, the trend between men and women’s footwear would be reverse,” she further added.

The retailer also plans to focus on adding more accessories stand-alone stores and value format stores i.e. MSL (More Shoes for Less) in the coming years.
http://www.indiaretailing.com/news.aspx?Id=6573&Topic=2

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