We entered the retail business in 1999, with the launch of Crossroads in the heart of Mumbai. At the same time, Piramyd was launched as an anchor tenant (department store inside the mall) within Crossroads. For us this was an experiment that was based on a lot of international concepts.
In the initial year, the store attracted a lot of attention and we had footfalls that were unparalleled. On certain weekends we had 150,000 people coming into the mall.
But this surge in popularity resulted in problems for Piramyd. When a diverse set of customers entered the mall, catering to them became an issue. The issue is not with high footfalls. But all customers are not serious shoppers.
Many were curiosity seekers who came in to check the looks of a mall. As a result, customer care executives could not pay adequate attention to the serious shoppers as a result of which conversions suffered.
The other problem was shrinkage. Shop-lifting has always been a problem for large format department stores. But our shrinkage was high. Normally, shrinkage should not be more than 0.5 to 0.6 per cent. In our case it was up to 2 per cent, despite having state-of-the-art security systems.
Our security had to work overtime to weed out pickpockets. Then, Piramyd had multiple entries and exits. It was easier for people to indulge in shoplifting. At present, the newer Piramyd outlets have a single entry and exit.
Many of these issues were not our mistake. But we learnt lessons. For instance, it was important to have relevant footfalls. In December 2000, we launched a loyalty programme but kept the threshold high.
Only those customers who shopped between Rs 5,000 to Rs 50,000 on a single day qualified to enter our loyalty programme (other departmental stores offer customers an entry into loyalty programmes for half of this amount). This strategy worked in attracting the right customer. Within a year we had 20,000 members on board -- they account for 35 per cent of our business.
There was a second aspect to these learnings. The Mumbai store was a pilot project for us. The floor plates were small (area of each floor was 3,800 square feet) and we were spread across four levels. Also, the number of people required to manage the store increased with the number of floor plates.
For instance, we would need only two floor managers if we had just one floor plate of 16,000 sq feet. But if the same store was split into four levels, the requirement increased to four floor managers. That was an important lesson for us.
Internationally, floor plates are much longer -- customers like to see everything within their line of vision. Also, it helps in better circulation of customers within the store as movement becomes easier. We decided that in future, we will only sign properties with a minimum of 8,000-10,000 sq feet on a single floor plate.
Another issue was that Crossroads (the mall where Piramyd was located) was a far more powerful brand and Piramyd as a brand got overshadowed. At present, the new Piramyd outlets are stand-alone ones.
Nevertheless, we borrowed many lessons from Crossroads. One was to mix entertainment with leisure even in the department store. In product categories beyond apparel, Piramyd could not compete with the speciality stores.
So we created a model where apparel would occupy 70 per cent of the store, while the rest would be given to concessionaires. Another thing, which we learned from the Mumbai experience was the availability of car parking.
In our first Mumbai mall, we had a car park that could accommodate 250 cars. Still there were parking problems leading to bottlenecks at the entry. When we launched our second mall in Mumbai, Cr2, we created a facility for 600 car parking slots. Even the Ahmedabad outlet of Piramyd has space to accommodate 300 cars.
When we launched Piramyd in 1999, though we had positioned the store as a premium destination, all brands sold in the store were not premium. One reason was that there were not enough premium brands at that time. At present we focus solely on premium brands and it has taken Piramyd a couple of notches higher in customer perception.
Piramyd Retail, director and CEO, K N Iyer says that the learning curve for a first mover can be steep
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