Always a firm believer of creating something path-breaking & out-of-the-box and never shunning away from the competition, the ethos of Future Group are well ingrained in each & every member of the board. During this exclusive interaction with Rakesh Biyani, Joint Managing Director, Future Retail Limited, every thought of his resonated with the eternal brand philosophy of Future Group. A firm believer of taking a customer centric approach, the brand only believes in competing with itself. Aptly carrying ahead the thoughts of Sir Richard Branson, the founder of the iconic Virgin Group, ‘Every risk is worth taking as long as it’s for a good cause and contributes to a good life’, Future Group is steering ahead in offering customers a lifestyle that’s affordable for all. With this vision, the company is now set to reap the benefits of scale, experience and power of brands in creating value for all its stakeholders.
Retail has become a very competitive sector unlike earlier days. You have been an integral part of this transformation. How do you see the transformation then to now?
The journey that we have covered in the past two decades, since our humble beginning in Kolkata, has been filled with immense learning and an exponential growth in our fashion business. At a time when ‘fashion’ was regarded as an option for selected sections in the society, we ‘democratized’ the very concept and made it a household aspiration. This was a big transformation then, which changed the way people viewed fashion. At present, our fashion category takes a lead in contributing the highest sum to our business’ overall earnings. However, the retail world has become far fiercer than before and this requires us to constantly reinvent ourselves and align ourselves with these changing trends.
Today, India is brimming with the energy of the youth that is pumping in fresh consumption. The country is witnessing a massive increase in buying, and we are excited to be an integral part of this dynamic environment. This current scenario carries immense opportunities for us to grow as a nation and a business house. Our primary focus, in the coming times, will be on carrying our fashion business to the next level. One of our key focuses will be on acing our efficiency levels through our recently-installed state-of-the-art supply chain system and the best use of technology and data, to power our production and distribution. We are now set to reap the benefits of scale, experience and power of brands in creating value for all our stakeholders.
Future Group is an undisputed leader in the retail sector. Kindly give us the striking figures that prove and reflect the sustenance of Future Group as the leader.
Future Group, which is one of the largest retail groups in India, with 5,200 retail outlets including department stores and speciality stores in more than 240 cities, covering consumer goods including food, fashion and cosmetics reported a turnover of 22,000 crores in 2016. These past achievements that have impacted the retail landscape bear testimony to our sustenance as a ‘thought leader’ over the years. Also, the tall aspirations that have us working towards a much steeper growth too reflects our business vision and commitment towards sustaining our top position in the business. Currently, we have close to 20+ million square feet of retail space in operation in India. And we’re looking to expand our network by 14-15 per cent per annum. This implies, adding about another two to three million square feet of new retail space every year.
We aim to reach a turnover of 1 Lac crores in the next five years from the current 22,000 crores.
You have been involved in so many turn-around propositions at Future Group. How difficult and challenging the journey has been?
As the famous quote by Oscar Wilde goes, ‘An idea that is not dangerous is unworthy of being called an idea at all.’ So, as ‘thought leaders’ in the retail business, we haven’t shied away from pushing the envelope further or redefining the conventional ways of working, in order to pave newer paths that spell efficiency and excellence. At times, these decisions have not worked out the way we hoped it would, while at other times, it has made history; but that’s a part of the game. In the end, we have always learnt something valuable that has empowered us to create the next game-changing idea. With the fast-evolving consumer mindset in today’s global world, it’s imperative that we know our customers and their needs, sometimes even well in advance.
What are the parameters that go into building an iconic brand such as Future Group? What are your growth plans?
Knowing the pulse of the market by having a thorough understanding of our customers and their needs has been the guiding force behind all our endeavours. The ability and agility to blend the ‘traditional’ with the ‘new’ have lent us the resilience to evolve with the changing retail landscape. This is a critical parameter for building a brand that wants to be associated with excellence. Furthermore, our robust backbone of distribution channels and our solid consistency in supply chain management that banks on the latest technology allows us to envision a double or even triple business growth by 2020-2021. In a nutshell, we aspire to be the ‘clothier of the nation’, in times to come, so that’s the level of growth we are eyeing.
During one of the forums, you had mentioned that competition expands the market as it creates a much wider space to play on. Fashion being such a huge category, what is the journey of a fashion trend from the drawing board to the shelf?
Competition prods us on to trying newer things and pushing our boundaries, in order to stay ahead in the game. For instance, the online retail space that discouraged most brick-and-mortar stores inspired us to come up with India’s first discount store – Brand Factory – that offered Indian customers great discounts on big brands, all year round! Competition invariably always blurs boundaries and has even had us stepping into international markets and explore a whole new market and space to work in.
What’s your strategy to beat the competitors when it comes to fashion retail?
At present, virtual retailers may have gained more mind share than actual market share. Their large advertisement spends have helped raise awareness for fashion and brands and that has actually helped us. However, we realize that the one thing that virtual stores cannot give its customers is the ‘retail experience and satisfaction of holding the piece of fabric and checking it out. With that learning, we have consistently invested in upgrading the customer experience and that has yielded results for us. In fact, our fashion business has grown at a rapid pace over the past two years, as more customers are coming to experience and buy brands within retail environments. Moving forward, we will be carrying our customer-centric approach to a whole new level where every detail of the store, staff and service will be planned bearing in mind the ultimate convenience to the customer.
How do you view the growing expanse of omnichannel retailing? What is the recipe for creating a memorable consumer experience in online and offline mediums?
The retail world in India is still finding out how successful ‘omnichannel’ as a system will be, in a country like ours We are witnessing a rapid evolution in what we earlier knew as a ‘stereotypical customer mindset’. While online retailing has challenged the conventional brick-and-mortar stores, shoppers who enjoy the retail experience of holding and evaluating their choices have kept the physical stores alive and thriving in India. Not only are the demographics in our customer profiles changing, but their preferences and level of awareness too are also evolving. We will have to wait and find out how this dichotomy in the retail channels will fare, in a country like India.
Future Group is doing some remarkable work in the logistics space. More so, when it comes to adopting best in class tech solutions at warehouses. Kindly highlight some of the path-breaking measures taken by you.
We have always maintained that ‘retail’ is about attending to every ‘detail’. And logistics is what forms the backbone to the entire science of retailing. We have always been frontrunners when ensuring the strength and consistency of our supply chain. We have been the pioneers in adopting barcoding as a key component in keeping our supply chain efficient.
We recently launched a distribution centre in Nagpur which is the largest in the whole of Asia Pacific region, barring China. We boast India’s first automated high-speed cross-belt sortation technology, which has incredible sorting productivity of over 36 crore pieces per annum. This sorting capacity has an accuracy of over 99%. In fact, our newly-installed sortation system comprises a cross belt tray sorter, enabled with approximately 2.5 km of the conveyor system. This sortation system will make the delivery of the stock to the store a faster process, benefiting all the stakeholders involved in the process.
In order to be ahead of the game, one must keep reinventing tech wheels. What are the latest tech tools implemented by you?
Reinvention starts in the mindset first, for a thought leader. We have embraced the latest technology to ensure a much higher level of efficiency for our customers. Our recently-launched distribution centre that houses the latest sortation technology, is going to be a total game-changer that will make us efficient and error-free. But this is just the beginning. In the future, we will also be bringing in inbound automation to support 60% faster unloading of trucks from production houses, a move that will help us handle increased volumes. A boom conveyor, in the future, will increase our unloading capacity by three times, that’s unloading around 600 cartons in less than an hour!
How do you perceive the Indian economy? What are the major changes that we would foresee in the retail space in India going ahead?
India is among the fastest-growing economies in the world that will see significant population growth in influential consumers by 2020. This number is estimated to range between 350 million and 400 million by 2020, which is similar to the entire population of the United States. There are lots of people in India today, who are looking for differentiated products. Meanwhile, there’re more than 30 million retail stores in India, which is about one store for every 100 people. All these numbers will nudge a simultaneous growth in the retail business. Not just this, the affluent consumers are shifting from daily necessities to fashion, accessories, beauty and electronic products.
Their higher disposable income now gives them the ability to buy quality products at competitive and affordable prices. All these numbers will nudge a simultaneous growth in the retail business. Our own import margins will rise, largely because it caters to this aspirational consumer base. In fact, the amount of value-added products our company will import in the next five years will rise by nearly 200 per cent.
What are your views on the implications of GST on retail? What are your strategies in place to succeed in the post-GST era?
A certain kind of ease in doing business, the removal of cascading in taxation, allowing the free movement of goods across all states, is all that the industry has been asking for several years. The GST allows us each one of these advantages. What the GST does is that it reduces the effective tax rates. The impact of this eventually allows you to build an efficient supply chain model. And progressively, efficiency can bring cost-saving. And the merits of this is something we intend to pass on to our consumers. Our objective is to work closely with our supply chain partners, raw material suppliers, our manufacturers, transportation partners and with our stores too, to bring in a more efficient supply chain, which can make us bring in cost savings faster. Ultimately, it will reduce prices and increase consumption across all categories and that is our intention. I think a lot of opportunities will open up with this GST implementation. Our group and all our retail partners are going to focus to take maximum advantage of the opportunity and ensure that we are able to serve our consumers with superior products, better availability and lower prices.
What is the one change that you wish to bring in the Fashion industry in India?
The fashion industry in India is experiencing constant change, as it continues to adjust and respond to the fast-changing consumer landscape. One of the changes, speaking purely from the customers’ perspective, is to now create our own standard and measurement for Indian sizes, in clothing. Currently, there are no standard sizes in which garments are segregated in India. Almost every manufacturer is following different size markings. Some mark in CMS, some in UK sizes, while others simply use ad hoc benchmarking like S / M / L / XL. These different markings of sizes make it difficult for customers to understand their correct size. This ‘zero confidence’ on finding their right size, discourages customers from shopping and eventually restricts the growth of the market.
We have voiced our support in favour of the Indian textile department’s initiative called ‘Size India’ that plans to take on the Herculean task of collecting data across demographics and compiling a single standard for Indian sizes in garments. This initiative carries immense opportunity to fuel significant growth in the consumption in India, through the revived ‘trust and confidence’ of a customer in a standardised product. This increased opportunity to sell and consume more garments will significantly help the growth of the market at a more rapid pace.
UP CLOSE & PERSONAL
What’s your leadership style? Whose leadership style do you admire the most? I believe in a leadership style that relies on a high emotional intelligence. While a strict eye for what’s happening around the world is just as important for any good leader to take an informed decision or even take risks, being able to understand, respond to and even foresee people’s needs and behaviour is just as important. In fact, being in a fickle retail world, this quality takes precedence over all other qualities today. After all, how else can we serve our customers better or bring out the best in our employees unless we learn to empathise with their needs and aspirations?
Among the leaders I greatly admire is Mahatma Gandhi, who could connect and influence a nation full of people with his thought leadership and Indianness. These qualities resonate with what we look for in our thought leaders at Future Group.
What’s your success mantra? In a dynamic world like today’s, it is unintelligent to rely on a single parameter for defining success, since a lot of things are often not in our control. However, I can safely say this for myself and Future Group that we rely on our ‘thought leadership’ and ‘reliability’ as our success and also success mantra. We are constantly working towards strengthening the emotional connect that we share with our customers. After all, to be trusted as a brand by a nation full of customers is our real success.
What message would you like to give the next generation to steer the growth in the right direction? There is so much to learn from the young generation – be it, their high energy levels, confidence in themselves, their agility and risk appetite. This generation does not shy away from doing things differently and there is much to learn from them. Having said that, a few valuable lessons come from experience alone. One needs to tide through business cycles to even understand the simplest of qualities like patience and resilience; to be able to turn a challenge into a positive opportunity.
What’s your prized possession? I am not someone who is very ‘possession’ centric. My greatest strength though is my family that had stood by me through every twist and turn of my journey.
One learning that has stayed with you throughout…Taking inspiration from nature – the way one season effortlessly slips into another or the way a river flows over rocks – I too believe in ‘going with the flow’. One must not resist change or challenge instead much figure out a way to work with it and also make the most of it. Also, I regard ‘introspection’ as a constant exercise for growth. These learnings aren’t mine alone, since they also form the backbone of our organization's value system too.