Early realisation of creating partnership with entrepreneurs has helped Raymond achieve the fastest roll-out of a strong franchise network across emerging towns in the form of Mini TRS, writes Payal Gulati.
India’s emerging towns have become the new destination for the retail sector, given the increasing propensity of customers who are getting richer and increasingly willing to shell out money to shop at modern retail formats. Indeed, the next growth story is expected to come from emerging towns, which are poised to see a growth of 50-60% in modern trade over the next few years, substantially higher than key metros, at the time when the Indian retail market is expected to touch USD 1.3 trillion by 2020.
The company believes that this focus on potential emerging markets, strong partnership, early mover advantage, stringent product quality parameters and customer-centric approach will take it to newer heights. Talking about the rationale behind launching Mini TRS, Mohit Dhanjal, Director-Retail, Raymond Ltd., says, “With urbanisation, the emergence of over 1,200 new urban towns having population above 50,000 showspotential to support The Raymond Shop (TRS). Having its presence in over 400 of these towns, Raymond felt a need to evolve and develop a new retail format with the right consumer proposition for the remaining ones.”
“The team took the challenge of opening 100 stores in a year while our past annual average was only 25 stores. The team worked round the clock and turned that challenge into a positive opportunity through relentless passion and grit,” says Vijay Arodi, Head Sales - India I (North & West), Raymond. “We have leveraged the local knowledge and expertise of entrepreneurial franchisees with a growth mind-set,”says Sashindran Nair, Head Sales - India II (South & East), Raymond.
“The Mini TRS represents the brand Raymond in these emerging towns and acts as a beacon of modern retail,” adds Dhanjal. Based on its deep knowledge and experience of over 30 years in retail, in September 2016 Raymond piloted a new format which was then perfected over six months and commercially launched in March 2017. The first Mini TRS opened on March 5 in Bihta, Bihar. Since then, over 106 TRS’ have been rolled out in the last one year. Raymond has taken on an audacious goal of opening 300 TRS by 2019. Under the rallying cry of ‘Har Shehar Mein Raymond’, it has already rolled out over 106 stores in the past one year.
REPLICATING THE LEGACY
These stores replicate the legacy of The Raymond Shop in emerging towns with an agile business model. The new asset- light model requires an investment less than 1/3rd of a regular TRS which provides the necessary fuel to make the business highly profitable in these emerging markets. The agile design and modular interiors ensure that the stores are set up within 45 days instead of regular 90 days; taking into the account the challenges of retail space which has been optimised to 600-1,200 sq. feet basis availability of retail inventory in these towns.
PARTNERS IN GROWTH
An important essence for Raymond’s success has been associating with like-minded franchisees who have brought alive the immersive Raymond experience through their market knowledge, hands-on operations and adherence to the business framework. In their pursuit of nurturing entrepreneurs, over 50% of new stores have been opened by first-time entrepreneurs. This has broadened the horizon of their partnership with new flavors of entrepreneurs and professionals coming from different industries and looking at men’s lifestyle retail in a completely new perspective. With the agile and asset-light model these entrepreneurs are more receptive to opening a retail outlet although they have no formal background in retail.
In association with its franchising partners the brand has evolved from ‘Point of Sales’ to ‘Point of Experience’. This is brought alive through the ongoing staff engagement and training programmes on various subjects pertinent to modern retail such as product training, customer relationship management, visual merchandising and operations amongst others. Thus, Mini TRS model proves to be the most promising one for emerging markets that are driven by external factors like growing aspirations, democratization of information, media exposure, young demographics, rising spending power and improving lifestyle standards.
ENCOURAGING THE ENTREPRENEURIAL SPIRIT
With the approach of ‘keeping the customer at the heart of every activity’, Raymond’s franchise model truly encourages the entrepreneurial spirit. The brand’s franchisee partners are empowered to recognize and leverage opportunities through well-structured engagement plans. With the idea of empowering franchises and generating sustained buzz at stores, the team worked on a robust framework of Local Store Marketing (LSM). From 621 LSM activations in 2017 the team propelled to over 10,000 LSM store activations in 2018.
With Local Store Marketing Raymond intended to be the catalyst in bringing about a mind-set change and drive exponential growth by challenging the status-quo, setting new benchmarks in empowerment and bringing alive the immersive customer experience at its stores. The team embarked on the journey of creating 10,000 LSM activations in one year – a true testimony of the revered Moonshot approach “Think 10x and Not 10%,” says Vikas Bissa, Head - Marketing (Retail) Raymond.
A COMPLETE MEN SOLUTION
The brand offers complete solution to men’s wardrobe from fabric to readymade apparels to custom tailoring tailoring. It continues to be one of the leading premium retailers in India aspired by every generation. There have been various milestones with the introduction of new product categories in the recent past including performance-enhancing fabric such as the ‘Techno-Smart’ series, the all ‘Natural Linen’ collection, shoes to fit every occasion and feet, leveraging new-age technology such as 3D printing for accessories to the latest introduction of Khadi. In fact, Khadi, which is known as the fabric of the nation, has now also become the fabric of fashion after Raymond recently launched its Khadi collection. “This will help change people’s perception of Khadi from a fabric that stands for nationalism to one that also stands for fashion,” Dhanjal states.
The company is also setting up tailoring hubs across the country. All stores have the option to connect to these hubs for servicing their custom tailoring requirements as these hubs provide high-quality finished garments through technology-enabled world-class tailoring processes and infrastructure. The company has already set up 25 tailoring hubs across the country and each hub has the capacity to produce at least 75-100 garments a day. “Our ambition was to establish 50 tailoring hubs by 2020 but in FY 2018 itself we have set up 25 and opened our 26th tailoring hub recently in Hyderabad. So in FY 2019 we might hit the 50th milestone and the only reason for this is because we leveraged the franchise model that helped us expand faster. The tailoring hubs are an integral enabler for our fabric business as we continue to grow our businesses by winning customers through our products and services,” says Dhanjal.
FINANCIALS
The company’s consolidated revenue for FY 18 was up by 9% year-on-year at Rs 6025 crore. Consolidated EBITDA for the financial year was up by 29% y-o-y to Rs 546 crore, margin improved by 140 bps. The profit after tax (PAT) was Rs 135 crore, up by 428% over previous year.
FRANCHISE FACTS
Existing TRS outlets: 800
Store size: About 2,300 sq. feet
Presence: Across top 457 markets
Franchise opportunity for MINI TRS
Shop size: 600 sq. feet to 1,200 sq. feet
Minimum frontage required:15 feet
Investment: up to Rs 50 lakhs
For queries reach out at franchisee.admin@raymond.in / 8879900993
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