There is a new hue in the Tata spectrum. Croma, India's first national large format retail chain for consumer electronics and durables launched in October 2006, has already begun to carve a place for itself.
Owned and managed by Infiniti Retail, a 100 per cent subsidiary of Tata Sons, Croma receives technical and strategic sourcing support from Woolworths India, a subsidiary of Woolworths. The latter is an Australian retail giant with over 2,000 stores in 12 different formats in Australia.
The above 20,000 sq feet chain at Juhu in Mumbai retails products in eight categories. These are white goods, home entertainment, small appliances, computers and peripherals, communication, music, imaging and gaming software. In each of these categories, the buyer is spoiled for choice, with nearly 6,000 products and 180 brands to choose from.
Says Ajit Joshi, chief executive officer, Infiniti Retail, "A study by Tata Strategic Management Group conducted two years ago revealed that there is no national player in the electronics and white goods retail business; only small regional players. A deeper study of nearly 22.7 million households showed low penetration of electronic items."
Simultaneously, the realisation that the market was ready for more, indicated good times for the organised retail industry in India. Joshi clarifies, "Currently organised retail is only 3 to 6 per cent whereas the total retail turnover in India was 250 million dollars last year. But organised retail is growing at a speed of 40 per cent. The pie is large enough." These facts were disclosed at an AT Kearney summit held in Mumbai recently.
Clearly the potential is huge. The market demanded a player that would be capable of fulfilling its needs in every region. It was the perfect stage for Croma.
Joshi is confident of his chain's prospects, especially of its ability to leverage the price advantage in Croma's favour. There are other measures that he hopes to use to attract the customer. These include job-related training and motivational programmes to ensure that the sales staff is able to give optimum service to customers, and extended warranties on products from Tata AIG General Insurance.
These measures help give further credence to Croma's claim of "We don't sell, we help you buy." Says Joshi, "We took a very different approach from the market. We want to try and understand customers' needs and then recommend the product that best suits them. A child's requirements from a phone differ from those of an adult. We are not in the business of merely selling brands. This approach has been really appreciated by our customers."
There have been times when Croma salespeople have visited clients' homes to measure the size of their bedrooms and recommend a TV. They have also visited kitchens to measure the space left by the architect for the fridge and recommend one accordingly. Croma also makes recommendations, based on the energy- and water-saving potential of the product. The chain, however, refrains from recommending one brand against another.
At the store, clients are encouraged to get a feel of the product they intend to buy. The mobile phones are pre-activated and the 45-odd laptops and computers on display are Wi-Fi connected, so clients can browse the net and decide which one to buy.
In order to offer services of this nature, Croma needs to be assured of trained salespersons, who know the products thoroughly. "Finding the right people," says Joshi, "was not difficult. We support a lot of charities and NGOs. Our approach was also to recruit people from them. We also recruited from the ITIs (Industrial Training Institute). We believe that when an electrician sells you a TV, he is going to put his heart and soul into it, because he understands it. We are creating empowerment with this. We also go to BSc, BCom colleges to recruit Maths and Science students. We are also trying to work on a retailing course."
To prepare its people, Croma, with the help of Woolworths, devised a month-long training programme that addressed their needs. This was necessary, given that the electronics industry sees newer models being introduced and older ones being phased out, on a regular basis.
Besides equipping them for the exigencies of their job, the programme also offered help on yoga and breathing exercises to beat stress, tips on improving speech and diction, and the basics of the English language. The language lessons were significant as some of the salespersons came from non-English speaking backgrounds.
Joshi says, "As far as training and overall experience of the customer are concerned, we would like to copy our big brothers, Titan, Taj, etc. Whether you walk into a Taj hotel in Kolkata or Chennai, the experience of the rooms is the same. We too would like to deliver the same experience at all our stores."
Croma's willingness to sharpen its tools is justified by customers' appreciation of sales staff's methods and by the increasing number of footfalls in the store. Encouraged by the response, Joshi is making vigorous plans for rolling out 30 stores over the next 18 months. Upcoming stores will be located in Ahmedabad and Pune. Growth in the number of stores, however, is not the only thing to look forward to.
Croma is preparing to give after sales support on brands and products across categories. Joshi says, "No matter which product or brand you buy, you should call only one place for the after sales service and that is Croma. We are also talking to Tata Motors Finance for financing options for our customers." In serving as a one-stop shop, the chain will not only service products bought from the store, but also those bought from the competitors.
The store is also gearing up to solve the complaints of its customers. It has put in place a mechanism for gaining customer feedback and ploughing it back into sales. With so many plans and programmes in the offing, there is no doubt that Croma will succeed in painting the nation in its own special hue.