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How single-brand retail outlets are attracting consumer durables companies with leading players
Mono-brand stores, or single-brand retail outlets, are fast catching up the attention of consumer durables companies with leading players jumping on to the mono-store bandwagon. A lesser-adopted trend once is fast turning into a deluge, with leading companies such as Samsung, LG aggressively expanding through mono-brand stores.
Player such as Sony and Panasonic, are not far behind. Even Videocon has taken this route to push its high-end products through DigiWorld. Mono-brand stores give not only the possibility of exposure of the entire range of products from one manufacturer in one place but also the opportunity to experience the brand in a way that multi-brand stores offer only to a limited extent.
How these players get a mono-brand-store network in place? Most of them don’t actually set up their own outlets, but they talk to retailers or dealers who are willing to stock their brands exclusively. However, there is also an additional cost in terms of a trade margin that’s 3-5 per cent higher to be paid to the retailer for stocking the company’s brands exclusively.
Typically, the margins enjoyed by consumer durable retailers are about 9-10 percent. And this additional 3-5 percent shoots up their margins to 12-15 percent.
But experts argue that retailers who have been flocking to convert their multi-brand outlets to mono-brand stores are mainly small- and mid-sized retailers — not the target group that these big companies would like to have.