Lalit Agarwal, V Mart Retail

Lalit Agarwal established V Mart Retail in the year 2002. The company made its foray into the retail sector in October 2003 by opening its maiden showroom in Ahmedabad. As of now, he has successfully driven the business to have a 150 crore plus turnover and have a presence with

57 fully-integrated stores in 44 different cities spread in an area in excess of 400,000 square feet. Agarwal speaks to DARE about his entrepreneurial journey, and shares his knowledge about the industry

How would you describe the genesis of V-Mart Retail?My family has been in the business of retail since 1975. I formally entered the business in 1999. I come from the same family as RC Agarwal of Vishal Retail, who is my first cousin. We started our business from Calcutta, and we were among the first ones to enter the market in an organized fashion. We saw slow but steady growth in our business, which I believe happened due to us being very open to implementing innovations, such as bar-coding products, being a fixed price shop, opening up a chain of stores etc.

In 2003, we realized that we were not thinking on same lines, and we decided to part ways. That is when I started this retail chain called ‘V-Mart’. We opened our first store in Ahmedabad, Gujarat in 2003, and since then we have not looked back. Our store is basically a mini-hyper-mall kind of a model, wherein each of our stores is approximately 10,000 square feet, catering to the middle class segment of the market, and mostly women and kids. We also nurture the aspirations of the middle class and have top-end products with us. By doing so, we have always had wide horizons on X-axis as well as Y-axis.

Our group started its corporate journey with a mission to bring quality garments within the reach of the common man. We have a huge product line that lives up to our punch line “Sabse Sasta Sabse Achcha” (cheaper than all others, better than all others), wherein we try to get into the customers psyche, and make it a point to not charge any royalty, or offset product prices based upon the store location, and such. We offer products at the minimum margin and try to give the customers value for their money. As of today, we have 57 fully-integrated stores in 44 different cities spread in an area in excess of 400,000 square feet.

In your experience, what are the five key things that one has to keep in mind in the business of retail?First and foremost, you need to identify what products you are going to deal in. When you zero in on that, ask yourself if you know what is the best way to source the product, price the product and display the product. Secondly, you should know where to sell these products, in terms of store location, as well as placement of the products within the store. Price is the third key thing to keep in mind. If you are targeting the masses, and even slightly overprice it, it will result in a lot of bad business. Also, you should know that you should arrive at acceptable price points of products, while keeping in mind things such as the investment that you have put in, and such. The fourth important element is to understand this Hindi phrase, “Jitni badi chaddar ho, utna hi pair fehlana chahiye” (spread your legs only as much as the sheets can accommodate). This is very important when thinking about expanding your business. The fifth and final thing is that you should put a lot of thought into knowing how to market your products, your brand, and publicize your chain of stores.

What products typically do not do well in your format of retail chain?Almost everything that is out there in the market reaches the customers through a retail format. In our experience though, even

though we have managed things very well, we have seen that electronic goods have not done all that well. Also, we have seen a similar thing happen with retailing footwear, which could have done much better than it has.

What is the one big challenge in the retail business?Every entrepreneur in any segment of business will face various difficulties when they set up a business or try to grow the business. However, in retail, human resource is a big challenge. One does not require a lot of highly educated manpower, but you do want them to have good general knowledge, be street smart, have a sense of loyalty and be principled. As an entrepreneur, you should be very particular about how you want you handle your manpower and frame the HR policies that facilitate your vision.

Your first big taste of success?The biggest success for me, I would say, was setting up our first store in Ahmedabad. This store was the first one in our venture and we were the first to enter in the markets in the west of India. We begun as an ordinary retailer in this category and we tasted grand success almost instantly.

Any mistake that you learned from?Well, we had opened a store in Navi Mumbai, and that turned out to be a learning experience. This store did not do well at all. The reason behind it was wrong selection of place, wrong selection of market etc. The city itself is so large and just having one store out there does not really help in making your presence felt. This experience made me realize that one should not over estimate and enter markets that are not suitable for you or markets that you are not ready for.

Did you see a downfall in your business during the period of recession?

I would not say that I did not see a downfall of business. While the market has seen a lot of retail chains close down many of their outlets, we also had some of our outlets relocated. Now, relocation is a part and parcel of the business, and is not so much directly related to the slowdown of the economy.

One mistake, which in your opinion, any aspiring entrepreneur should avoid?I would say one should avoid getting carried away with the existing business scenario. It is common sight to see people drift away into a mindset wherein they think that doing a business is all about investing some money, doing some marketing, giving out some discounts, and the business will flourish. The aspiring entrepreneurs should not be thinking so much about profitability, as much as about product line or services.

V Mart to take its own time to launch stores

Delhi-based retail chain V Mart is treading cautiously on its expansion plans. V Mart does not want to rush with the opening of new stores.

The company plans to open eight new stores by the end of this financial year in tier-II and tier-III cities. The cities include Ujjain, Aligarh, Ballia, Chhapra, Arah and Patna, among others.

“We do not want to get into the mad rush of opening new stores and overstretch our finances. We would rather consolidate and stabilise our operations before exploring new geographies,” Lalit Agarwal, managing director, V Mart, told Financial Chronicle.

The company would invest around Rs 16 crore towards opening these stores.

Agarwal added that V Mart bargains hard on rentals before it finalises a store in any locality.

“The average rental for our stores is around Rs 30 per square feet and it forms 5 per cent of the total sales of a store,” said Agarwal.

In fact, low rentals form a critical part of V Mart’s business strategy because high rentals have been a burden for retail players who have been paying rentals as high as 15 per cent of their sales. “A store should earn Rs 550 to Rs 650 per square feet for it to be viable,” added Agarwal.

The company, which at present operates 52 stores across the country, is targeting smaller cities for fresh expansion.

“We feel the retail market in these cities is largely untapped and prospects of growth are much better,” he said.

The average size of a V Mart store is 8,000 square feet and the company targets middle-class people with the products offered in its stores.

The company is eyeing a 60 per cent growth on its sales turnover in the present financial year.

“The growth could come either through the increased sales at each stores or through consolidated sales from the increased number of stores,” said Agarwal.

Aggarwal added that the company studies the local market carefully before selecting the product range.

“India is a diverse country with varied preferences and every one of our stores is customised as per the local market to suit local tastes,” Aggarwal added.

Source: Financial Chronicle

Gain high with low prices

Sharing the success story of V Mart Retail Limited, with its philosophy of best products at lowest prices is Lalit Agrawal, Chief Managing Director of V Mart Group

Deep Shikha Bhagat: Kindly share with us the inception, growth, and success of your company.

Lalit Agrawal: The Company was incepted in 2003, when we started with a single store at Law Garden in Ahmedabad. We have grown since our inception and now we have 53 retail stores in almost all locations including metros, tier I and tier II cities. The company has always given preference to the location and visibility of the stores.

DSB: Is there any particular category of consumers that you are targeting through your retail venture?

LA: As our punch line says ‘Less price fashion’, so our target consumer is a common middle class man. However, the price is less but there is no compromise on the quality of the products. The merchandise that we offer is quite reasonable and affordable. With affordable fashion, we target the middle and lower sections of

society. As for the age group of the consumers is concerned we have something for everyone in the family.

DSB: Kindly elaborate on various retail formats that V- Mart has and are performing best.

LA: V Mart has basically three retail formats; V Mart, Kirana Bazaar and V Galz. V Mart is a fashion retail format, where we offer all types of fashion for men, women, kids, fashion for home, footwear, ties, luggage, and accessories for all. Kirana Bazaar format is an add-on to the fashion store. Whereas, V Galz format includes ladies western wear and targets young aspiring ladies between 16-30 years of age.

DSB: How different do you think your company is from other retail players in the similar category in terms of products, and consumer experience?

LA: The kind of merchandise that the market has and the kind of merchandise we have is quite different. Like, the kind of presentation, merchandise, customer base, and loyalty that we have built is completely unique. With our medium sized hypermarket format, we are targeting fashions that are not available in any other hyper stores. We have a complete range of products that include female denims to men’s denims, and from men’s shirts to casual shirts at reasonable and affordable prices. The company has production units in Ahmedabad and Gurgoan. We manufacture, and design products according to the latest fashion and have our own design centres.

DSB: What all marketing and promotional strategies the company is using for the promotion of its brand?

LA: As far as marketing strategy is concerned, we have our stores in prominent market locations. The company’s strategy is to create a consumer-friendly environment in the store. In addition, the company emphasises on the appearance and the look of the store, and ensures ways to keep the consumer intact. The company is utilising all the advertising mediums, publications, and PR contacts to promote its brand.

DSB: The economic slowdown is over now. What impact does it had on your business and how are you planning to revive your business?

LA: Economic recession acted as a boon for V Mart. The company made lot of changes in its strategy for the betterment. The company has closed or transformed its non- performing stores. In these times, people tend to move towards less expensive solutions or rightly priced products and the company is always answering such calls. In addition, because of our punchline called ‘Sabse Sasta Sabse Acha’, we were able to draw maximum benefit even in the recession period.

DSB: How many retail outlets do you have at present and how many more are expected in the near future?

LA: Currently we have 53 retail stores and within a year, we plan to open 50 more stores.

DSB: Which all categories of products and brands do you sell from your retail stores?

LA: We have a wide range of categories, like formal wear, casual wear, ethnic wear, wedding collection, infant wear, infant products, toys, sports goods, cosmetics, footwear, and a number of products fashioned in a way that would they suit customer’s pocket. Products are well crafted and well designed to make them look unique.

DSB: Lots of international brands have already entered the Indian markets which are providing world class shopping experience to the Indians. What steps are you taking to upgrade your stores to offer similar kind of shopping experience in your retail stores?

LA: From day one we are trying to do this. We are selling products at a very reasonable price, one-tenth of the prices of the international brands. We have up graded the furniture, the ambience, the kind of environment inside. We always try to reach out to those customers who have been to other stores but could not buy from them. We are also coming up with loyalty solutions to retain our customers. We are trying to come up with small software to track the people who have some identification number and have instant receipt of their purchasing pattern. Then we would like to reward them with some new offers, schemes, and discounts.

DSB: What is your reaction to the Financial Budget 2010-2011?

LA: We always are happy with what ever is coming. We always think positive and try to do things in a positive fashion. We feel that the budget has been good apart from service tax on retail rental which every retailer has to pay and we feel that, it will eat away our margins.

Product strategy

vember 2010 The V Mart Group – a branch of flagship company V Mart Retail which operates a chain of stores in the mini-hypermarket segment -- is currently concentrating on states in the North and West. V Mart saw 50 per cent business growth over last year with a profitability of around 300 per cent in that segment. With a strong presence in 52 stores in states like Punjab, Haryana, Delhi, Rajasthan, Madhya Pradesh, Gujarat, Uttar Pradesh and Bihar, the company plans to come up with another four stores by March 2011 as a part of its growth policy. These new stores will be in smaller cities like Gaya, Gorakhpur and Faizabad, which are virgin markets with a dense population, hungry for fashion at the right prices.

The V Mart Group has 52 existing stores in 45 cities covering an area of four lakh sq. ft. They will complete 100 stores by 2010-11 and cover an area of 10 lakh sq. ft. All its stores are company-owned and managed. The group’s main forte is fashion merchandise, with around 70 per cent of sales coming from fashion. It also stocks its own private labels for different segments. About 30 per cent of its range is private labels.

“Whoever offers good fashion at good prices, we stock it. In menswear we have almost eight private labels. J White is formal, Charcol is casual wear, Appache is casual. We have Flick for semi casual wear. Then we have Jinxx for denim and casual wear. We have Cruxx for formals. For women we have Kool for western wear. Catch Her, also western wear and Adya, ethnic wear,” says Lalit Agarwal, Managing Director, V Mart Retail. “In apparels we dedicate around 40 per cent area to men, 30 per cent to children including infants and 30 per cent to women. As regards our manufacturing capacity, we make a million pieces a year. We have a factory at Ahmedabad and at Delhi. They develop men’s, women’s and kids’ garments. We also get a lot of things manufactured outside because it’s not possible for a retailer to have a lot of labor in-house,” he adds.

V Mart’s sale strategy is more honest price retailing rather than discount retailing. The company’s strategy is to stick to basic categories and improve its existing range with better fashion varieties and display patterns and services rather than widening its product range. For the autumn/winter season, it is displaying a variety of casual wear, checked shirts, denim, formal wear, narrow fitted trouser and has already launched in-store sweaters, shawls, infant wear sets, cardigans, pullovers, chequered jackets, fur jackets and sweat shirts. As a part of its brand building initiative, it has tied up with Action Replayy the new Bollywood flick for their marketing and promotional activities. It will be opting for an IPO in the next five years that will give their customers the

best service possible.

Bookmark or Share|More

Sales promotion

Sales promotionFrom Wikipedia, the free encyclopedia MarketingKey concepts

Product • PricingDistribution • Service • RetailBrand managementAccount-based marketingMarketing ethicsMarketing effectivenessMarket researchMarket segmentationMarketing strategyMarketing managementMarket dominancePromotional content

Advertising • Branding • UnderwritingDirect marketing • Personal SalesProduct placement • PublicitySales promotion • Sex in advertisingLoyalty marketing • Premiums • PrizesPromotional media

Printing • PublicationBroadcasting • Out-of-homeInternet marketing • Point of salePromotional merchandiseDigital marketing • In-gameIn-store demonstrationWord-of-mouth marketingBrand Ambassador • Drip MarketingThis box: view · talk · edit

Sales promotion is one of the four aspects of promotional mix. (The other three parts of the promotional mix are advertising, personal selling, and publicity/public relations.) Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include:contestspoint of purchase displaysrebate (marketing)free travel, such as free flights

Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers). Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions. Some sale promotions, particularly ones with unusual methods, are considered gimmick by many.

Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase. Examples of devices used in

sales promotion include coupons, samples, premiums, point-of-purchase (POP) displays, contests, rebates, and sweepstakes.[1]Contents [hide]1 Consumer sales promotion techniques2 Trade sales promotion techniques3 Political issues4 External references5 See also6 References

[edit]Consumer sales promotion techniquesPrice deal: A temporary reduction in the price, such as happy hourLoyal Reward Program: Consumers collect points, miles, or credits for purchases and redeem them for rewards. Two famous examples are Pepsi Stuff and AAdvantage.Cents-off deal: Offers a brand at a lower price. Price reduction may be a percentage marked on the package.Price-pack deal: The packaging offers a consumer a certain percentage more of the product for the same price (for example, 25 percent extra).Coupons: coupons have become a standard mechanism for sales promotions.Loss leader: the price of a popular product is temporarily reduced in order to stimulate other profitable salesFree-standing insert (FSI): A coupon booklet is inserted into the local newspaper for delivery.On-shelf couponing: Coupons are present at the shelf where the product is available.Checkout dispensers: On checkout the customer is given a coupon based on products purchased.On-line couponing: Coupons are available online. Consumers print them out and take them to the store.

Mobile couponing: Coupons are available on a mobile phone. Consumers show the offer on a mobile phone to a salesperson for redemption.Online interactive promotion game: Consumers play an interactive game associated with the promoted product. See an example of the Interactive Internet Ad for tomato ketchup.

Example Ad For Online Games 7'UP Dancing Allu Arjun.Rebates: Consumers are offered money back if the receipt and barcode are mailed to the producer.Contests/sweepstakes/games: The consumer is automatically entered into the event by purchasing the product.Point-of-sale displays:- Aisle interrupter: A sign that juts into the aisle from the shelf.Dangler: A sign that sways when a consumer walks by it.Dump bin: A bin full of products dumped inside.Glorifier: A small stage that elevates a product above other products.Wobbler: A sign that jiggles.Lipstick Board: A board on which messages are written in crayon.Necker: A coupon placed on the 'neck' of a bottle.YES unit: "your extra salesperson" is a pull-out fact sheet.Kids eat free specials: Offers a discount on the total dining bill by offering 1 free kids meal with each regular meal purchased.[edit]Trade sales promotion techniquesTrade allowances: short term incentive offered to induce a retailer to stock up on a product.Dealer loader: An incentive given to induce a retailer to purchase and display a product.Trade contest: A contest to reward retailers that sell the most product.Point-of-purchase displays: Extra sales tools given to retailers to boost sales.

Training programs: dealer employees are trained in selling the product.Push money: also known as "spiffs". An extra commission paid to retail employees to push products.

Trade discounts (also called functional discounts): These are payments to distribution channel members for performing some function .[edit]Political issues

Sales promotions have traditionally been heavily regulated in many advanced industrial nations, with the notable exception of the United States. For example, the United Kingdom formerly operated under a resale price maintenance regime in which manufacturers could legally dictate the minimum resale price for virtually all goods; this practice was abolished in 1964.[2]

Most European countries also have controls on the scheduling and permissible types of sales promotions, as they are regarded in those countries as bordering upon unfair business practices. Germany is notorious for having the most strict regulations. Famous examples include the car wash that was barred from giving free car washes to regular customers and a baker who could not give a free cloth bag to customers who bought more than 10 rolls.[3][edit]External referencesUS specialist magazine for sales promotion, Promo magazineUK specialist magazine for sales promotion, Sales Promotion"Dave Dolak, Sales Promotion"[edit]See alsoDemand chainMarketingPromotion

PricingAlcohol advertisingTobacco advertisingInstitute of Sales PromotionSales Promotion (magazine) Wikimedia Commons has media related to: Sales promotion

[edit]References^ "Dave Dolak, Sales Promotion"^ Stuart Mitchell, "Resale price maintenance and the character of resistance in the conservative party: 1949-64," Canadian Journal of History 40, no. 2 (August 2005): 259-289.^ Anonymous, "Handcuffs on the high street," The Economist 355, no. 8170 (13 May 2000): 62.