By Zainab Morbiwala
\n Images Retail
\n December 2008<\/i> <\/p>\n
THE HISTORY OF CATALOGUE RETAILING IS INTERESTING. WHAT \n BEGAN OUT OF NECESSITY, SOON DEVELOPED INTO A CHANNEL OFFERING \n CONVENIENCE OF SHOPPING FROM HOME. WITH THE TREND OF CATALOGUE \n RETAILING YET TO GAIN MOMENTUM IN INDIA, MOST RETAILERS – \n STILL FOCUSSED ON THE BRICK AND MORTAR FORMAT- ARE YET TO \n FULLY EXPLOIT THE TRUE POTENTIAL OF THE MEDIUM.<\/i><\/p>\n
THE ROOTS<\/strong> Since then, catalogues and other forms of non-store retailing \n including television and the internet marketing have evolved \n in different markets.<\/p>\n Adds Dutta, “Very often, retailers use catalogues \n as a complementary channel to store retailing. UK’s Argos, \n now also in India, evolved its unique catalogue-stores, that \n turned the model upside-down, making physical stores a walk-in \n opportunity for the much bigger catalogue from which customers \n could place orders.”<\/strong> Sharing the success of \n Argos UK, Andrew Levermore, CEO, HyperCity, says, “Argos \n UK has annual sales of close to 2.6 billion Pounds annually \n and the catalogue is present in over 70 per cent of UK homes.”<\/p>\n INDIA STORY<\/strong> PHYSICAL PRESENCE<\/strong> INTERNATIONAL PERSPECTIVE<\/strong> CHALLENGES<\/strong> FUTURE EDITIONS<\/strong> Dutta adds, “Product integrity, predictability, \n and customer service are key success factors at the ‘frontend’. \n Customer service needs to be process and systems-driven. And \n with so many BPOs today, India is probably better geared for \n back-end customer service infrastructure and management practices \n to support catalogue retailing. From the point of view of \n standardisation, products such as mobile phones or durables \n meet the criterion of standardisation but price dynamics vary \n hugely – a catalogue can become non-competitive as soon as \n it is launched.”<\/strong> Levermore feels that India \n is still very much in the experimental stage and it will not \n be not possible to clearly predict the model’s full potential \n for some time. <\/p>\n Sharing suggestions for those in the business of \n catalogue retailing, Dutta says, “Most Indian retail \n catalogues have the look-feel of a business-to-business order \n guide, with a limited grid layout and no excitement! If retailers \n want to succeed with a catalogue, they should consider it \n as much a living environment as a physical retail store. In \n fact, it is a bigger challenge to create a catalogue that \n is as dynamic and alive as the store itself, considering that \n the customer’s only interaction with the brand are the pages.”<\/strong> \n Kumar’s checklist of do’s and don’ts for retailers reads as: \n “Do’s \u2013 price benchmarking with the market, good \n product range, dynamic catalogue, delivery on time and after-sales \n service; Don’ts – focus only on building the catalogue without \n proper attention to fulfilment.”<\/p>\n","protected":false},"excerpt":{"rendered":" By Zainab Morbiwala Images Retail December 2008 THE HISTORY OF CATALOGUE RETAILING IS INTERESTING. WHAT BEGAN OUT OF NECESSITY, SOON DEVELOPED INTO A CHANNEL OFFERING CONVENIENCE OF SHOPPING FROM HOME. WITH THE TREND OF CATALOGUE RETAILING YET TO GAIN MOMENTUM IN INDIA, MOST RETAILERS – STILL FOCUSSED ON THE BRICK AND MORTAR FORMAT- ARE YET […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2247","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n
\n As the name suggests, Catalogue retailing is a non-store retail \n format where the retail offering is communicated through a \n catalogue to the consumers. Mail-order catalogues debuted \n in 1856 when Orvis began selling fishing gear in USA. In 1872, \n Aaron Montgomery Ward made an arrangement with the National \n Grange, America’s largest farming organisation, to offer 163 \n items of merchandise under ‘The Original Wholesale Grange \n Supply House’. Ward’s catalogue was followed by one published \n by Richard Waren Sears, who started selling watches in 1886 \n through mail-order business. Elaborates Devangshu \n Dutta, CEO, Third Eyesight, “Catalogue retailing evolved \n in the west to meet the needs of far-flung towns and rural \n settlements since regular retail stores could not be established \n or profitably run in each area. <\/strong><\/p>\n
\n It has been only about 10 months since the launch of Argos \n in Mumbai. HyperCity Retail India Ltd, along with Shopper’s \n Stop Ltd, entered into a franchise agreement with Home Retail \n Group, UK, to offer a unique multi-channel shopping experience \n under HyperCity Argos. Currently operational only in Mumbai, \n the concept will be introduced across India when HyperCity \n debuts in other parts of the country. Talking about the HyperCity \n Argos operation, Levermore says, “For us it is the retailing \n of products through the medium of a book with more than 300 \n pages, listing over 4,000 products. Catalogue retailing is \n ‘not’ a promotional leaflet of a few pages that is inserted \n in the newspaper. It still requires the customer to visit \n a physical store to purchase the product.” Apart from \n HyperCity Argos, there is Lovy Khoslfs Elvy, which offers \n high-end home decor and interior products through a catalogue. \n An offshoot of export major, Stalwart Creations, Elvy introduced \n a mail-order catalogue in India three years ago. While HyperCity \n Argos’ catalogue is currently restricted to the customers \n in Mumbai, Elvy facilitates customers across India to place \n orders through their catalogue. Kh9sla says, “Catalogue \n retailing in India did not really exist when Elvy started \n out. It was very demanding’ and a very challenging task. We \n had to be thorough with our processes to meet the high expectations \n of our customers. “Prior to Argos and Elvy, Otto Burlington \n was operational in the Indian market (about 15-17 years ago) \n with Catalogue Burlington. Despite being a pioneer in India \n and popular in UK, it was phased out very soon. Explaining \n the reasons for Burlington’s failure, Khosla says, “The \n three infrastructural properties required to support catalogue \n retailing – effective telecommunication, easy mode of payments \n (e.g. credit cards) and a structured distribution set-up \u2013 \n were not in place.” Dutta observes, “Catalogue management \n sciences are probably not being applied effectively. The shopping \n dynamics and the operational success factors differ in home \n shopping and physical stores.” <\/p>\n
\n It is interesting to observe that both HyperCity Argos and \n Elvy have their standalone stores as well. Shares Levermore, \n “Having store presence cements the brand in the consumer’s \n eye and allows the customer to feel the product. When starting \n out, store presence ensures credibility and safety in the \n consumer mind.” The catalogue stores of HyperCity Argos \n offer customers the facility to browse through the catalogue \n and view the products before making the purchase. High involvement \n and high investment products across categories such as furniture, \n technology, jewellery etc. are available on display. Customers \n also get to see other products at the special viewing and \n demonstration areas in the store. Sharing whether catalogue \n retailing can survive without a physical store, Khosla feels, \n “Yes, it possibly can. However, it might take longer \n to penetrate the larger database present in the country. For \n us, a combination of both works.” Commenting on the catalogue \n design, Levermore says, “There is much science around \n this and can be learned only with years of experimentation.” \n As for Elvy, Khosla has made sure to bring out a catalogue \n based on international standards. Both Elvy and HyperCity \n Argos launch their catalogues every six months.<\/p>\n
\n According to Khosla, the resistance to catalogue shopping \n is much higher in India than in any other country. “We \n need to work much harder to build a comfort level for our \n customers.\u201d Adds Levermore, “For the Indian consumer, \n going out for shopping is still very much a leisure activity \n as there is little competition for leisure in the form of \n sports clubs or parks. In the West, shopping is often seen \n as a necessary but somewhat painful experience. This will \n evolve to be the case in India, but only eventually.”<\/p>\n
\n According to Dutta, the primary challenge to successful \n catalogue retailing is logistics. “Merchandising, space \n management, frequency of mailings, offers and promotions need \n to be managed differently. But possibly the biggest challenge \n is logistics. Most modern retailers in India are still establishing \n their logistics framework around the country; and their entry \n into catalogue retail would take the complexity to a whole \n new level. Not to underestimate the issue of handling returns. \n In fashion merchandise, for instance, catalogues can run a \n return rate of as high as 40 per cent in some products,” \n he points out.<\/strong> Pumendu Kumar, associate VP, Technopak \n Advisors, says, “Any kind of non-store retailing, of \n which catalogue is also a part, is based on the credibility \n of the seller. The second thing is the range of products being \n offered and its prices vis-\u00e0-vis the market operating \n price. Unless the retailers are established as strong retail \n brands, customers will not be very experimental with catalogue \n retailing. And since prices change constantly in India, printing \n of catalogues at regular frequency is also a challenge.” \n Samar Singh Sheikhawat, VP-marketing, Spencer’s Retail Ltd, \n underlines the two key challenges, “Lack of domestic \n expertise to run catalogue retailing as a function, and the \n right merchandise – stock needs to be available to run catalogue \n retailing as a profitable business proposition and the right \n category of product needs to be chosen for this format.”<\/p>\n
\n GETTING IT RIGHT<\/strong>
\n Levermore feels that furniture and large-ticket appliances \n are the strongest categories for this type of retail. Khosla, \n on the other hand, believes that as long as the customers \n have confidence in the brand, the movement of a specific product \n category is of no relevance. “For a brand to be a part \n of a catalogue, it must fit the target consumer profile, offer \n products that fit the assortment and should be able to deliver \n sufficient margin for the retailer to be profitable,” \n Levermore states. Dutta observes, “Brands internationally \n consider catalogues as a retail environment, which is in someone \n else’s control – so while the additional market footprint \n is welcome, the margins could be lower and the brand’s image \n is impacted by other brands in the catalogue.” Giving \n a brand’s perspective on being a part of HyperCity Argos’s \n catalogue, Nilotpal Mrinal, brand manager, Remington, says, \n “Argos is Remington’s largest catalogue retail partner \n in the UK. We are happy to work with them in India too. However, \n the concept of catalogue retailing is yet to take shape in \n India to the levels where it can contribute a considerable \n share to Remington.”<\/p>\n
\n Technopak Advisors’ Kumat asserts that the catalogue business \n in India will have higher potential in the years to come. \n “The key enabling factors will include: customers having \n less time for shopping, established retail brands, better \n customer service etc. As the Indian market is spread over \n a large geography, brands can target thousands of consumers \n through a catalogue.\u201c <\/p>\n