What is India's largest luxury retailer Reliance Brands' success formula?

The quintessence of Reliance Brands Limited lies in their convictions that luxury is beyond everything. They have ensured to spoil the Indian market from luxury to mass with the astonishing portfolio of brands that they have created by collaborating across the globe. The brands chosen are impeccable in terms of standards, innovation and creativity.

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Apart from getting into a joint venture with brands like Villeroy and Boch, Burberry and Canali, they have also ensured to spice up the mix by becoming the licensee for brands like Armani Exchange, Super Dry, Luxebridge, Georgio Armani, Jimmy Choo, Brooks Brothers, Tumi, Emporio Armani, Bottega Veneta, G-Star Raw, Michael Kors, Ermenegildo Zegna, Diesel, Salvatore Ferragamo and Hugo Boss. Recently the company had also promised to add three more brands to its portfolio namely Balenciaga who introduced the famous sock shoes. Apart from that the company also planned to launch Tory Burch- a women's luxury brand and Kurt Geiger- footwear and accessories brand in addition to the above two brands but the launch got postponed due to the ongoing COVID crisis globally.

The company broke records in the fiscal period of 2018-2019 in terms of profits. Reports suggested that there was an almost staggering 90% jump in the profits, ultimately adding to Reliance Industries overall revenue growth. As a matter of fact, since acquiring LVMH backed Genesis in the year 2018, the company became a part of the largest publicly listed companies in India.

The man responsible for the successful outcome of Reliance Brands limited is none other than the President and CEO of the company Darshan Mehta who is marvellously visionary in his approach to taking the business to new heights. According to him the consumer trends have changed a lot in the last five years and people won't witness just a chunk of consumers but more in the society being able to afford the luxury. However, it may not be a simple and straightforward road ahead as the consumers' belief and trust in luxury have saturated in the last few months, which could be witnessed in the overall reduction in the country's GDP too, as suggested by the International Monetary Funds report.

Reasons for success

Feedback focused

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He believes that one of the main reasons that make Reliance Brands a success is their approach of giving critical importance to the feedback and using the same to raise the level of performance. He suggests that it's only when you get to the depth of the underlying challenge that you can move forward. The efforts that the company is willing to put to bring people out of their comfort zones become challenging but worthwhile. Although the company may not be in the race for the best employer of the year, it's still the most desirable in terms of giving a right direction to the employee's career in Luxury or fashion retail.

Cutting down costs

A common trend witnessed over the years looking at failed brands in a luxury segment in India is the ridiculous high pricing. This is where Reliance Brands Limited ensures that they have the best logistics and supply chain in place to tackle the problem of splashy debuts by doing solid market research and by saving costs at all levels of the organization by merging different departments like HR, finance, logistics, etc. They have set group-wide targets to reduce costs, which means that they don't have a CEO for each brand under the RBL portfolio but rather they have appointed a few senior executives and each of those executives handle up to five brands under them. The same executives also manage a group of brands allocated to them. These effective methods are quite frequent in a mass-market but quite out of the ordinary for brands in a luxury segment. Even though the company is highly acquisitive, they did not hang back from taking drastic measures like letting go brands which didn't work out in India.

Going ‘Phygital’!

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Under their future plans, RBL plans to combine people and the digital world together to form a unique experience for the customers at the retail store. This method is already being followed by a lot of retailers around the globe and Darshan feels that it’s time that even Indian luxury customers gets a taste of this. This is based on various studies that point out that shoppers are becoming futuristic and want a digital-based swift and effortless experience. This concept has evidently been noticed in airports where customers loathe the process of standing in queues to get their boarding pass. So, for such customers, a self-check-in kiosk was placed with a customer assistant helping you through the process. Luxury shopping comes under discretionary shopping and such shopping usually requires some amount of assistance, unlike grocery shopping. It is yet to be seen how and when will India start to opt for this system or if the consumers would look out for a human interface with digital rather than just 'phygital'.

Adopting departmental strategies

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Last year RBL also launched a new luxury brand store in Gujarat based on a mixed merchandising model. This new brand under their portfolio is named 'The White Crow'. The main target customers of Reliance here are totally different from the ones they have been targeting for their other brands, trying to understand a customer segment which is ambitious and opulent. The White crow until now has seen a good success rate. Moreover, most of their customers come from other states and countries which explains a good start. As a result of which they planned to open a hundred stores in the year 2020 which couldn't be implemented due to the ongoing crisis. The CEO explains that according to the new trend you won't see consumer dressing a specific brand from head to toe, which is the main ideation behind this model

Focusing on different communities

Source:https://www.marketingmind.in/top-5-most-luxurius-malls-in-india-2019/

Unlike other brands who make a dire error by considering India as a singular country, RBL has a different mindset by considering multiple India’s within this singular India. Their understanding that there are different customer profiles in each city in a luxury segment helps their brands to be appealing to their audience by introducing an assortment of styles. According to the CEO, the brand needs approximately 3000 loyal customers per city to form a very triumphant luxurious brand. If you are living in a country like India you will observe different consumer behaviour in each city of the country. Example, In Mumbai the shoppers are quite careful to exhibit brand logo whereas in Delhi the consumers are more eminent in showing the brand logo. Although bringing in a diversity of styles in each state was a bigger challenge a couple of years back, RBL has found a way to tackle the same after they figured out that most Indian's love flamboyant colours rather than colours which are monochrome. Accordingly, they launched brands in India which aligned with this understanding.

Conclusion

This lockdown as businesses are shifting towards e-commerce and adapting to a world of digital tools, brick and mortar stores face high uncertainty, what does this mean for RBL? whose core beliefs lie with investing money on a luxury experience and a brick and mortar model. According to a survey conducted by McKinsey on entrepreneurs released a few days ago, which showed that above 50 per cent of entrepreneurs in India are positive about the future, whilst only above 24 per cent of entrepreneurs in Japan are positive. This indicates a slight U-curve for our economy. But the drop has not come to a stop as of now. There are a lot more problems going forward and it certainly is a rough path ahead. It's still to be seen if Reliance Brands would be able to formulate another success story that could be admired in the time to come.