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Thursday, July 15, 2010

It’s my concept!

With concept stores, organised retail players are taking brand wars in the segment to the next level. Will their endeavors bear fruit? Analyses Savreen Gadhoke

For Raj and Anita, who had just bought their dream house, doing the interiors was an uphill task. “We could not decide what we wanted, and that’s because we didn’t know what we really wanted for our most precious purchase,” confesses Anita, until a friend suggested that the couple must visit Asian Paints ‘Colour’ concept store.

Having gone through everything under the sun, the couple decided to walk into the store as well and that seemed to be the end of their problems. Unique to its kind, the store claims to offer an inimitable experience to those who seek right colour combination integrated with inspiring home décor. Full of interactive as well as educative features, the store also displays various room styles (contemporary, modern, traditional, et al). While colour consultants answer visitors’ queries, Asian Paints Home Solutions assist visitors in executing their plans. The entire experience was so overwhelming for Raj and Anita that once out, they were crystal clear on how they should do the interiors of their house.

Harold Geneen, an American businessman, once said, “The business world has two coins – cash and experience. Give the experience first, the cash will come later.” Following this mantra, a lot of companies are (in the name of experiential marketing) giving coveted experience to their customers by way of Concept Stores. Different from traditional company outlets, these stores claim to give customers an experience of the company’s product or service offerings by allowing them to touch and feel the product before taking the final purchase decision. And interestingly, these stores do not sell! They are only committed to give a life-like experience to the customer.

So be it Hindware, which through its Concept Store Hindware Lacasa, showcases the entire range of Hindware brands including sanitary ware, kitchen appliances and wellness products; mobile handset retailer UniverCell’s concept store UniverCell Live, which allows customers to touch-and-feel the products; Canon’s Image Lounge, which displays Canon’s entire range of digital cameras for both personal as well as professional use – all are playing upon the sole mantra of giving a unique experience to the customers.

Says Ramesh Barath, Vice President, UniverCell, “The idea behind a Concept store is to give customers live, hands-on experience while buying a mobile. It allows them to touch, feel, experience a real live wire mobile and enjoy its many features. It enables customers to get a feel of the mobile.” Not only do the concept stores give a first-hand experience of the product to the customer; they are also an extension of the brand building exercise of the company. For instance, Hindware, whose products are already available at various dealers and distributor shops as well as company-owned retail outlets called EVOK, also has its concept stores – Hindware Lacasa (launched in Kochi first and then in Mumbai) – only to give its customers a feel of its niche products and to take the brand more closer to its customers. “For various product categories, which are sold through dealers and distributors, showcasing products in a concept store is a very good opportunity for companies to make their brands register in the minds of the consumers, especially when dealers push more than one brand to the customer,” explains Neeta Walia, Director, Brand Talk.

The phenomenon of concept stores as an effective experiential marketing tool is not only viable for B2C, but also for B2B customers, case in point being Canon BIS (Business Imaging Solutions) Lounge. While Canon Image Lounge caters to the B2C model; Canon BIS Lounge is committed to the enterprise segment, which is a very strong business vertical for Canon. The first of its kind in India, Canon BIS Lounge accommodates huge laser printers, digital printers and photocopy machines for big companies besides showcasing copiers, fax machines and printers for SOHOs as well. “We also organise demos, training sessions, visits, et al, for our B2B customers so that they can gain experience of our products. Since most of the enterprise products are high-involvement products, it is imperative that the customer is sure of his purchase,” says Pooja Gogia, Asst. Manager, Direct Marketing, Canon BIS Division. The most expensive machine accommodated in Canon BIS Lounge located in Gurgaon costs a whopping Rs.80 lakhs and therefore the whole idea of experiencing such expensive products before purchasing them has made Canon a strategic partner of its enterprise customers.

Well, moving on to the other side of the coin (read cash), while providing experience to the customer is surely an effective experiential marketing tool, it is of no good if the experience is unable to translate itself into sales. However, as companies divulge, concept stores have scored well in sales terms as well. While Barath of UniverCell reveals that the concept stores have been successful with 80% conversion rate of footfalls into sales; Canon Image Lounge is able to generate sales of 8% out of the total footfalls in the store, which varies from 300-400 footfalls during weekdays and around 1,000 during weekends. Canon BIS Lounge too has been successful in retaining enterprise customers since the store was launched two years back. “Almost 70% of the people who come to our concept stores finally end up buying the product,” avers Puneet Datta, Sr. Marketing Manager, Canon BIS Division.

So, if the effectiveness of any marketing gimmick were to be evaluated purely on the basis of monies that it brings back into company coffers, concept stores surely scores high.

Savreen Gadhoke

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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1 comment:

Anonymous said...

Very Interesting!
Thank You!