Still miles to go!

Kiran Nair, 
Country Leader, 
Imation India

Right from day one, Epson has been carefully absorbing the LFR stores to cater to its home segment customers with products like inkjet AiO printers, scanners, consumable items, projectors for home theatres that are typically targeted or positioned to entertain this segment. Though products like dot-matrix printers, Laser printers and bill printers don’t come under the home segment, there are some dedicated retail stores that do cater to these kinds of products for office use. For instance, Staples cater more to the office and the enterprise segment rather than the home segment. 

S.M. Ram Prasad,
Senior Business Manager,
Epson  India
 

“Today, Epson has its major presence in almost every LFR in the country, namely Croma, Staples, Aditya Birla Group, Metro Cash N Carry and the newer formats that are coming in like the Wal-Mart Cash N carry. Of late, we had also withdrawn from some of the LFRs since we didn't find much of movement happening,” says Ram Prasad.

Fujifilm has chalked out decisive retails sales and customer care strategies to consolidate its presence in India. Its DSC as a category is a B-to-C module catering to the country's retail business and it contributes approximately 25 to 28 per cent to the revenue generation for Fujifilm India. The company has recently tied up with LFR chains, consumer electronics chains, Camera Speciality stores, Photo & IT channels, etc. to leverage upon the wide geographical footprint and network of the cross-sectional channel segments. 

A. Rajkumar,
Country General Manager (DSC),
Fujifilm India Pvt. Ltd.

“We recently announced our presence through retail as we aim to establish retail presence across all important C-& D-class cities in India, besides targeting A- & B-class cities. The disposable income of the people in these cities has risen impressively in the recent past and we have been experiencing growing traction for our products from these markets,” remarks A. Rajkumar, Country General Manager (DSC), Fujifilm India Private Limited.

Though not a shop-in-shop arrangement, Imation has a rental agreement with many of its partners who lend them space to showcase their retail products. “What happens in a shop-in-shop concept is that they have a dedicated place for a particular brand with brand promoters stationed in the outlet to give out any kind of information to the customers. But in our case, we have a space taken on rent from a partner where we have our entire portfolio displayed. We pay the partner for a period of six months or one year for lending out that space. This helps us a lot in branding and we are in the process of finalizing a couple of such rental agreements,” says Kiran Nair, Country Leader, Imation India. Imation has just started the process and is targeting to have 15- 20 such spaces in the next six months to come. 

Epson is not looking at having any exclusive retail outlets, but it is planning to classify its loyal partners further, based on their capabilities and willingness. It is converting their outlets into exclusive experience centres for the interests of the customers. Called “experience zones”, these exclusive centres facilitate the customers to have a touch and feel experience of the Epson products and whatever support these centres require in terms of branding and new product offerings, Epson provides for that.  

Epson also has its own loyal partners whom it classifies as Epson Star retail outlets. “We have been able to identify close-to 500 outlets in a short span of one year and they are doing an incredibly good amount of business for us. They are multi-brand outlets which are closely associated with Epson,” says Ram Prasad. 

To build a larger presence in the C- and D-class cities, Fujifilm has a mix of ATL and BTL activities like GSB, Shop-in-Shop branding along with placement of promoters at all key outlets. It also has sales tool kit for the customers so that they understand the specification and key features for their offerings better. “We are investing heavily into ATL and BTL activities at prominent locations, road shows, dealer meets, etc., besides in-store promotion activities, shop-in-shop arrangements, counter decorations, and POP / POS (point-of-purchase / point-of-sales) materials. We also conduct regional training programmes frequently to equip all our promoters with the latest know-how so as to serve the customers better,” says Rajkumar. 

Fujifilm does not have any exclusive retail outlets in the country but for the last two years it is consolidating its distribution and retail penetration in order to promote sales in all the tier-II and III cities, apart from tier-I. Furthermore, it is present in almost 2,000 outlets across the county and plan to be present in as much as possible. It also has its presence in the LFRs and intend to intensify the same more.

Imation has Neoteric and Redington as its two national distributors and they have their own network of sub-distributors below them selling Imation products. If taken the country as a whole, it has around 200 such partners. Furthermore, Imation breaks up its channel into several categories for ease of work. “While we have the corporate channel catering to the enterprise and the corporate segment, the consumer channel pertains to our consumer segment and is further sub-divided into the retailer and reseller channel. Again, under retail we have the hypermarket model, supermarket model selling only IT accessories, speciality stores selling IT and electronic goods and the mobility stores,” says Kiran

Unfortunately, Ram Prasad points out that the retail industry is not evolving the way it is supposed to or is evolving in developed countries like Japan, USA and European countries. “A large part of Epson sales in Europe and USA (close-to 70-80% of sales) come through these LFRs. The problem here in India is that most of the stores are prone to pricing strategies rather than giving the customers a touch-and-feel experience of the products by giving them a demo or making them understand about its latest features. All these detailing seem to be missing in LFRs which is actually happening in other developed countries. If you look at the overall sales of Epson, the sales from LFR will constitute only 5 per cent of our total sales, which is why we still rely on the traditional resellers and retailers for our maximum sale to happen,” he explains. 

Epson is toying with the idea of introducing several new elements in its retail strategy. But the lack of innovativeness on the part of the retailers is holding it back in implementing its strategy in entirety. “Majority of the players are playing the price cards, which is definitely not going to help us in the long run. They need to be much more innovative and customer-centric, where we can give the customer a better experience and information about our products that would drive them in using our products in a much more effective way. This is one area where we would like to focus because at the end of the day our customers should feel contented in having bought that that product. And this is true i n the case of LFRs too,” sums up Ram Prasad. 

Imation targets to get into the LFR space, though Kiran feels that what they call the LFR in India is not exactly the same outside the country. “I would simply call that a retail store or organized retailing. Even a small reseller in Nehru Place is now geared up to provide a retail ambience to its customers with all the décor and facilities hitherto not available. And this is what customers want, for they want to go where they can do their own selection of products. This trend is catching up fast and it kind of helps in revamping the store,” he explains.

Finally...

Until last year, the total sales that happen through organized retailing are only 5 per cent, which means that 95 per cent of the sales still take place through typical resellers or retailers. So, it will take some time before organized retailing comes up in the country and catches up with countries like the US, Europe and Middle East where 80 per cent of the sales happen through retail. Also, there is not much of a difference in what the traditional retailers and the LFRs do and they are almost seen doing the same thing. This is another factor that is strongly inhibiting the growth and penetration of the LFRs. 

It is time the LFRs learn their lessons before it is too late!

For more contact:
samrita@varindia.com