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RPG-controlled Spencer's Retail Ltd is planning to include homemakers at the store-level product procurement process.
The move, currently in the nascent stages, may help Spencer's stock brands or products according to the demand profile.
Under the proposal, the company is likely to select a group of frequent buyers (homemakers) who will decide on market trends at the store levels. Depending on the trends, the company may stock products that are in demand.
The move is likely to help the company take competition to kirana stores and the local retail shops, an official of the company said.
Mr Sanjay Gupta, Vice-President (marketing and business development) Spencer's, told Business Line, “We are currently discussing the details of this proposal. Instead of deciding what the consumer buys from us, we let them decide and stock these items.” The proposal is likely to materialise in six to nine months, he added.
He, however, did not specify the other details — like the say a decision maker will have in the procurement process. “Its just an extension of our consumer loyalty programme concept. Having a consumer insight about the preferred products is just taking the matter a bit further.”
Organised retail contributes only 14 per cent to purchases, while 86 per cent of purchases are through kirana stores and local shops.
Retailers have tried out various consumer loyalty programmes that include providing reward points that can be redeemed later or offering discounts to frequent buyers. Some retailers have even tied up with mobile service providers to provide free talk-time depending on the amount of goods purchased.
Break even
Loss making Spencer's Retail Ltd is looking to break even within a couple of years. The company is planning to pump in around Rs 90 crore to set up at least 1.5 million sq.ft of trading space in the country. It also plans to set up more large format stores to push sales.
“At a store level we are making profits. However, it is the distribution cost and other costs that have to be effectively managed. However, Spencer's as a company plans to break even by 2013-14,” Mr Gupta said.
The company has around 30 large format stores and 160 small format stores across the country.
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