‘No matter how much digital grows, there will always be a physical aspect of shopping’

The fifth edition of India Brand Conclave (IBC), held on December 15, brought together some of the country’s most beloved brands and undisputed industry leaders on to one platform for a day of key insights into marketing and the ever-evolving ecosystem of retail and brand building.

Given that IBC 2021’s theme was ‘Brands: Capitalising on Change’, the keynote address, which was delivered by V-Mart founder & MD Lalit Agarwal, was pitch perfect for the occasion. V-Mart, founded in 2002, has pioneered organized value retailing in Tier II, III and IV Indian cities by focusing on affordable fashion.

Fondly remembering his journey, Agarwal reminisced, “My journey started as a child, when my father set up a tailoring shop. While I used to have fun dealing with customers, I also got a lot of insights on their behaviours and expectations which helped me when I started out on my own. I began with another value retail store called Vishal Mega Mart, and in 2003, we started V-Mart, which went from its first store in Ahmedabad to further outlets in North India and now we are reaching out to smaller cities, towns, and semi-urban areas across the country.”

It was on this journey that Agarwal realised that it’s the smaller towns in the hinterland of India where the majority of the population lies and the time was ripe to expand his model across these previously dismissed markets, which resulted in the company going public in 2013. 

“Throughout we have been targeting the value fashion retail segment and reaching out to aspirational, and lower middle income consumers, who have really driven our growth to where we now have 377 stores across 25 states at this time, and took over the Arvind Group this year,” he further said.

Speaking about the potential challenges that emerged for V-Mart as it was establishing itself, Agarwal stated, “There were certain hindrances at different levels, whether external or certain learnings that we had to take into account moving forward. For instance, when we started out and were small, acquiring funds could be challenging. Getting potential vendors could also be challenging. Then there were questions like how you build your brand and scale it up, how you introduce technology into your operations, and how you manage supply chain logistics for a growing business.”

Since V-Mart specifically targets smaller towns, Agarwal admitted there were several challenges in entering those environments, given the law and order problems, the lack of basic infrastructure, even electricity and internet, the problems in finding appropriate locations and of course, arranging logistics to far-flung places which lay off-grid.

However, as he points out, “There is a solution to every problem and over time we have learned from mistakes and managed to grow our business, with some of our previously most problematic outlets doing very well now. The government has also really improved things in the last few years, which has definitely helped us expand and connect and engage far more with customers.”

He added that it’s important for brands to narrow their focus on the audiences that work best for them, and also evaluate the scale they want their businesses to be, and enhance their capabilities and mechanisms to better serve customers, while also ensuring management teams can keep pace with the evolving markets.

Answering an audience question on the digital journey of V-Mart, Agarwal said, “Right from when we started this business, we knew that it had huge potential, and that digitalisation would play two parts: the first would be on the internal front; to empower scalability and ensure seamless supply chains and manage logistics across a large network of warehouses and stores, the second is on the customer front, the front end of the business.”

He added that the company uses a lot of digital processes, whether it is using analytics to track consumer preferences and market trends, or ensuring connectivity between the various components of the business and making sure operations are running smoothly across the board.

Agarwal further elaborated, “We’ve realised there are going to be more customers coming in as more people move into digital and so we’re working on our omni-channel capabilities to meet that need. We’re working on our app and website to be able to deliver the same experience of our stores on digital platforms. We’re moving in that direction, but there’s still a long way to go.”

Interestingly, when asked about how digital shopping equates to actually visiting a store by Dr. Annurag Batra, Chairman and Editor-in-Chief, BW Businessworld and exchange4media, who was chairing the session, Agarwal professed confidence that no matter how much the digital world grew, there will always be a physical aspect of retail shopping.

“When one world becomes too much for people, they want to opt out and explore another, but no matter how big digital becomes, there will always be a brick-and-mortar aspect to retail shopping. Especially for the audience we cater to, who are mostly from small towns, going shopping is an event, which they enjoy as a family outing and is something they all look forward to, no matter what those purchases are going to be. We have started seeing people returning to our stores to physically shop once again in huge numbers, comparable to pre-Covid numbers, he observed.

Agarwal concluded saying, “I believe that physical shopping will always be there, but we also have to acknowledge that digital is growing, especially as younger consumers are more impatient and want everything at once. So both worlds will exist side-by-side.”