Tata Group appears to be making a concerted effort to derive synergy benefits from its various retail ventures with the aim to cut operational costs and drive footfall.
The group operates multiple retail formats and brands spanning food, fashion, jewellery and consumer durables and electronics. They are often housed under different companies, some listed and some private.
To begin with, the group is looking to acquire property by long-term lease, together, and is thereby driving a hard bargain on the rent. Similarly, the group companies are often sharing the backend logistic, including warehouses, and thereby reducing cost.
For instance, three retail ventures of Tata Group — Croma (consumer durables and electronics), Starbucks (coffee) and Tanishq (jewellery) — will come up on a single property at Courtyard By Marriott in Rajarhat.
“We are working closely with other brands of the group. This way we can feed off from the impulses of each other,” Avijit Mitra, ED and CEO of Infiniti Retail – Croma, said.
In some of the places such as Bangalore and Kolapur, Croma has come up along with Star Bazaar, the hypermart from the Tata stable.
An internal team within the group is working to see if the brands can come together jointly and drive rent down, often by 10-15 per cent. The brands also gain by an increase in consumer footfall.
Tata’s Bid to Counter Online Retail
Croma, which is adding 65 stores this fiscal to its present footprint of 130 stores, is working with Amazon to come up with voice-assisted products under its own brands. The CEO, who was in Calcutta to launch the first of the five stores expected this year in the city, said some items in the television and audio segments could be launched this year. It also plans to offer smart home solutions.
At present, Croma brands contribute 10-12 per cent to sales (by volume) at the stores/online channel. These efforts are likely to further push up a contribution from own brands.
Since turning profitable two years back – it is expected to close the year with Rs 4,800 crore turnover – the growth has expanded. “We have identified at least 270 cities where Croma can come up,” Mitra said. Apart from Calcutta, Durgapur, Asansol are on the radar of the company, as well as Ranchi, Jamshedpur and Bokaro. It has taken 30,000 square foot space in Dankuni for a warehouse.