NEXT, an established brand in the organised retailing of consumer durable electronics aims at changing the way an Indian consumer shops for electronics and plans to build a chain of over 1,000 showrooms throughout the country with an estimated annual turn
With the rising economy, brand consciousness, changing lifestyle and way of thinking, steady rise in the income levels, and interest to buy latest evolving technologies, the consumer durable market in India is moving towards growth. Keeping all this in account, NEXT Retail has come into existence to tap the immense potential promised by the consumer durable retail industry. According to KS Raman, Director, NEXT Retail, “In the CDIT (consumer durables information technology) sector, NEXT is the major franchise model. Franchising in the Indian retail industry is more in the FMCG products and brand shops. So, with the mission of creating a unique customer satisfaction through innovation, quality productivity, human resource development, we have started franchising our business.” Here is the case study of NEXT Retail, encompassing its success journey, the ups and downs and its franchise strength.
Origin of NEXT Retail
Next Retail India Ltd was incorporated in 2003 with five showrooms in Hyderabad. Now, the company is operating through 603 outlets across the nation spanning across the metros, tier II and tier III towns under the brand name ‘NEXT’. The company has tied up with all the leading brands of national and international repute which are showcased under one roof, combining the best in quality, service, convenience and price.
NEXT is a multi-brand and multi-product showroom and stocks an entire range of consumer durables from AC, LCD and plasma TVs, home theater systems, washing machines, refrigerators, microwaves to small home appliances. NEXT, retails some of the most popular brands such as LG, Samsung, Sony, Electrolux, Kelvinator, Whirlpool, Onida, Philips, Kenstar, Videocon, Sansui, including its own brand. The company also stocks Xbox of Microsoft, computers and laptops by Acer, HCL, Lenovo and HP.
Franchise takes on
The vision of NEXT is to be the number one in the CDIT category in retail field and to become a globally recognised company through innovation, passion through quality, freedom through empowerment and cost through volumes. With this vision, company opted for the franchise route. The company believes, franchising is the best available option for any company to expand its business. Also, it provides an opportunity to the young and experienced entrepreneurs to establish themselves through this wonderful mode. After opting for franchising, the company has become capable to expand its network rapidly and generate good revenue out of it.
The franchise model of NEXT Retail is different because it has its own group brands that have more than seven to eight brands across various product categories. So, this gives the company a big advantage over other players in the industry. Elaborating on the franchise expansion plans of the company, Raman says, “Our ultimate aim is to have a franchise store in each and every district of the states where we are present, and then to link them to talukas in these states. We are now in the process of taking up a model state for this plan, which we will implement in the next four months, and then replicate it.”
Latest development and future plans
For the first time, the company has entered into a tie up with an established retail brand (Shoppers Stop) to launch a new store at Shoppers Stop, Andheri(W), in order to strengthen its presence in the city. The store is spread over an area of 3, 000 square feet and is located on the fourth floor of Shoppers Stop. This store will further increase the footprint of NEXT pan-India and will give greater access to its customers in key metro areas, where modern retail penetration is growing at a rapid pace. Besides this, the company is also planning to start many more stores in the coming days at places like New
Delhi, Chennai, Hyderabad and Bengaluru, which will be company owned outlets. All these stores have been designed in a way that will give a world class shopping experience to its customers. Presently, Mumbai region has about 11 stores including the new outlet added to the chain. As part of its expansion plan, NEXT Retail plans to add another 15 stores in this region in the next six months through a mix of franchised and company owned outlets.
Hurdles in the way to franchise success
In spite of its well knitted franchise plan, the company faced certain problems in getting the franchise model connected into the common Information Technology (IT) system. Besides this, making the franchisees to send their sales people for training, convincing them about adding product categories to increase their profitability and working out better Returns on Investment (ROI) for their investment, were some of the other challenges that NEXT Retail, faced while establishing its franchise network across India. But the company managed to get over these challenges give its franchisees an edge over the competition.
Franchise prospects and leverages
Today, as more and more people have the ambition of getting into self employed business, taking up the franchise business of NEXT Retail can prove to be a wise and profitable decision. The company has large and medium formats, depending on the geographical location and also the population of the town where it is located. All you need to have is an area of 1,250 sq. ft to 3,500 sq. ft, which must be located in a potentially sound market area with high footfalls. Also, an investment of about Rs 30 lakh is needed to become the franchisee of NEXT Retail. Besides this, the company usually looks at retailers with thrust of business and dedication.
This lucrative franchise prospect comes with dynamic leverages. Being a new franchisee of the franchise network, you will be provided with the required support and guidance. The training given to the franchisees includes soft skills in upgrading sales, training in product features and also all round grooming of the sales staff. The company provides them with advertisement and promotional support; offer periodic training and uniforms for the sales staff of all the franchisees to ensure smooth running of the business. Apart from these, the company also offers IT support and better return over investment compared to other companies.
In short, it can prove to be a golden opportunity for an aspiring entrepreneur to be a part of this giant, which is growing at around 40 per cent every year and is expecting to grow at the same rate in the coming years.