Westside - Business Insights, Trends and Future Plan
Posted in Finance Articles, Total Reads: 892
, Published on 01 March 2017
Westside is a retail chain operated by Trent that is the retail arm of the TATA group. Westside offers a predominantly exclusive brands model across women’s wear, menswear, kids’ wear, footwear, lingerie, cosmetics, perfumes and handbags, household furniture and accessories. Although Westside’s sales have been growing steadily for the last five years, it is still lagging in competition with some other Indian retail stores like Pantaloons.
EXISTING PRODUCT STRATEGY
PRODUCTS CHARACTERSTICS: Westside stores have owned brands and other brands in the ratio 3:7. There are two main divisions in the product category; namely, Apparel (Men's wear, women's wear, lingerie and kid's wear) and Various Utility Items (Home decors, Jewelry, Deodorants, Cosmetics etc.). Along with this they also have a range of Footwear for men and women.
PRODUCT DIFFERENTIATION: Most of the products are in-house products and differentiated on the basis of their superior quality along with the promise of Tata’s brand name. All products offer a high conformance quality.
Image: company website
Westside recently followed two way lines stretching as it used to serve mainly the upper middle class market and wanted to expand customer base as well as increase the profit margins.
PRODUCT LIFE CYCLE
PLC for product range of Westside
Bath and Body
MIX N MATCH
YOUNG & FREE
OAK & KEEL
Westside keeps the price of the store products in a range matching or below its competitor’s price range.
o The pricing method used by Westside is ‘Value Pricing’ whereby the products are offered to customers at a constant low price throughout the year with help of various sales and discounts.
o Seasonal pricing is used to increase the movement of products out of the store where a discount is offered on purchase of seasonal products.
o Bundled pricing is also used to motivate shoppers to buy in bulk.
Westside has most of its stores in malls and few exclusive showrooms in big cities. Westside stores are located very near to its main competitor Pantaloons in all major cities.
Westside has its head office situated in Mumbai.
From our interactions with store managers we came to know about the following facts:
• All stores get their stocks every week on Friday from Mumbai.
• Because of higher purchasing power of the general population of Mumbai and the head office being situated in the same spot, stores in Mumbai have the highest assortment of items.
• In metro cities like Mumbai and Kolkata, more products are available and slightly on the more costly side contrasted with a city like Nagpur.
• In some prime areas in Delhi, Westside built an exclusive showroom to cater to the needs and demands of women.
WESTSIDE’S BRAND EQUITY
As per Brandz model, Westside’s brand equity can be analyzed as follows:
Presence: Westside has strategically placed itself in locations which are most accessible to people. Having parent company TATA helps in increasing its brand credibility.
However, customers prefer Pantaloons and Lifestyle over Westside which provide products in same price range. Recently, Westside stores are being evicted from malls and are being replaced by international brands like H&M, Zara, and Forever 21.
Relevance: With its vision to provide fashionable and quality products at affordable prices, Westside offers best-in-class products with services at flexible costs. Yet, an increase in the product variety is need of the hour for Westside.
Performance: Westside has the highest percentage of in-house brands in India's Retail apparel industry. It has a lower share of foreign/western brands on its shelf as compared to lifestyle and pantaloons.
Advantage: One of Westside’s core competencies is its high product quality at affordable price with the help of in house brands and private labels.
Bonding: Westside does not enjoy a high share of loyal and repeat customers.
In-house promotion is done through display media using signs and posters to attract customer to new and discounted products. Various sales promotion incentives are provided to customer like coupons and next purchase discounts. No-question exchanges, redeemable points and free home delivery for card holders also helps in improving the shopping experience.
For the year 2014, Westside used Rs 33.68 Crores for advertisements. Often, there are various offers mentioned by Westside in their ads. Currently, Westside has no celebrity endorsement as compared to 2002, when they signed Yuvraj Singh as their brand ambassador.
Customer Behavior Analysis
Introduction: The overall satisfaction level of the customers was relatively lower when compared to its competitors. One main reason for this is lack of good branding strategy and promotional offers (According to new customers).
Customer Opinion Survey: One–on-one interactions with the customers revealed that the ambiences in Westside stores are highly attractive. The spacing and the music which made it lively to shop were also greatly appreciated.
Young customers are not loyal to the Westside brand because of limited availability of upbeat and latest fashion. Many of the respondents feel that Westside is unable to provide variety in apparels and therefore should be a little innovative regarding inventory rotation at the stores.
Westside should focus more on attaining a leadership role in the market and improving its sales.
Launch an Ad campaign
The tagline will read “Walk on to the other side, come to Westside”, portraying the transformation of Westside to a brand that is more elegant, lifestyle oriented.
The ad will be released in 5 phases, the first four ads focusing on a fixed category of target customers.
1. Phase I
Target Segment: Men (30-40 years of age)
Sharing the highest market share with women, the first phase of the campaign will launch an ad with the trending product line.
2. Phase II
Target Segment: Women (30-40 years of age)
Women’s wear has seen an increase in the market share in the recent past, with a CAGR of 10%. Again the product mix will include an increased share of products that are trending with highest growth rates.
3. Phase III
Target Segment: Youth
This ad will cater to the younger crowd with high disposable incomes and a higher intensity to spend. Items like accessories, Jackets, bags from outside brands should be sold.
4. Phase IV
Target audience: Kids
This ad will attract the Kids, and parents that accompany them can also be converted.
5. Phase V
Target audience: Family
Westside will be projected as a single stop shop/ apparel store for the whole family.
Focus on service, creating in store experience
• The staff will be trained to handle customers and engage them.
• Understanding customer behavior and to handle their queries by having a better information about the products.
• To instill elegance in the ambience by little modifications
Partnering with other high end brands
A product mix complimentary and non-conflicting to that of Westside could include:
• Clothes from Mr. Button (Jackets)
• Accessories from Chumbak (Phone Cases, Laptop and Tablet Sleeves), Quirkstore (Bags, Bow ties)
• Books and Music from Landmark
Brand Ambassador: Getting a designer who can complement the core values of Westside to endorse it like - Gauri and Nainika or AM: PM
• High intensity marketing through social Media like Facebook.
• Launching an ad with a renowned comedy channels like TVF, AIB etc.
• Mailers would be sent out to customers of Westside on their birthdays. Also all new product line information will be mailed to customers.
Using suggested marketing plan; there will be almost 20 percent growth in sales revenue while keeping other incomes constant. Taking all factors into account, we estimate that there will be a net increase of almost 15.5 percent in Net Profits (PAT).
Consolidated Profit & Loss account
In Rs. Cr.
Power & Fuel Cost
1.6 cr to be Paid to nainika and gauri
Online Promotion through FB and You Tube
Monthly 3 lakhs will be needed for FB and Monthly 40000 needed for You tube
Advertisement in Television(NEW)
60 lakhs worth advertisement in 5 phases
20% increase in Written Off Depriciated Cost
Profit Before Tax
Reported Net Profit
Increase in PAT(%)
This article has been authored by Suvayan Roy from IMI Delhi