As V2 Retail targets a turnover around 1500 to 1600 crores this fiscal year with its data-driven strategy, Director Akash Agarwal speaks to BW Retail World exclusively on expansion in tier 2 and 3 cities, operational efficiency and more
V2 Retail is gearing up for aggressive expansion, targeting a staggering 40-50 per cent growth in the current fiscal year. In an exclusive interview with BW Retail World, Akash Agarwal, Director of V2 Retail, reveals the strategies underpinning this ambitious goal with a laser focus on leveraging data analytics, optimising assortment planning, maintaining operational efficiency, challenges and more.
Excerpts:
With the projected turnover increase from 1100 to 1150 crores to 1400 crores, what strategies are you implementing to achieve this growth?
We closed last year at 1100 crores and this year we’re aiming for around 1500 to 1600 crores, targeting a 40 to 50 per cent growth. Our strategy is leveraging data. We’re capturing and analysing customer preferences in terms of product attributes, colours, fits and fabrics. This helps in our assortment planning, following trends from inspirational brands, both international and domestic, and utilising historical data and customer surveys. Effective planning is crucial, as 70 per cent of retail is planning, particularly assortment planning—deciding what products to stock, when to procure them, and how to distribute them.
We have also invested in fabric research and have a team of 30 designers producing around 50 samples a day in our sampling studio. With three factories, we maintain good control over costs and aim to pass on the benefits to consumers, reducing the gap between production costs and retail prices.
You’re planning to expand from 120 to 250 stores. What challenges are you anticipating with this expansion?
One challenge is identifying the right locations. We have formed a core committee to assess potential sites based on local population, income levels, market location and other criteria like parking and minimum floor space. Finalising the wrong location is a risk, but we mitigate this through rigorous checks and on-site visits by committee members.
New stores typically don’t perform as well as established ones initially but we’ve observed that they mature within two years and start performing at par with the national average. Our focus on freshness, identifying and discounting slow-moving inventory helps maintain profitability and keeps our stores attractive to customers.
What steps are you taking to manage operational efficiency and maintain quality control?
For operational efficiency, we use an internal app for task management and tracking, linked to employee KPIs. We also use gap reports to highlight and address outliers. For quality control, we have a team of 16 quality inspectors who perform checks at the vendor’s location, our warehouse, and a pre-production sample stage. This multi-layered approach ensures that substandard products don’t reach our stores.
How do you leverage data analytics in your decision-making process for inventory management and customer engagement?
Data analytics plays a crucial role in our operations. We use it to capture insights on customer preferences, aiding in better assortment planning and forecasting. Our systems, including SAP provide reliable data management and our MIS team generates comprehensive reports to inform our decisions. We also automate processes like auto purchase orders and seasonal assortment planning based on past sales performance.
What role does technology play in enhancing both customer experience and internal business processes?
Technology is integral to our operations. We have an app for staff to manage inventory and track stock levels. We use Power BI for data warehousing and reporting. For our omnichannel strategy, we’ve partnered with a SaaS provider for seamless integration with our SAP system, aiming to deliver a cohesive customer experience across online and offline channels. Our goal is to fulfill 90 per cent of orders within 24 hours using store-level inventory.
How are you approaching marketing, especially with your omnichannel strategy?
We focus on organic marketing, leveraging the foot traffic in our stores. With around 60,000 people visiting our stores daily, we aim to monetise this existing customer base rather than spending heavily on acquiring new customers through digital ads. Our marketing budget is around 1 per cent of sales, divided between product giveaways and traditional and digital media. We also engage in local activation events at the store level, which have proven effective in driving sales.
Our goal is to offer a comprehensive omnichannel experience, allowing customers to shop online and pick up in-store or get home delivery.
What states are you targeting for your expansion and why?
We’re focusing on the states where we already have a strong presence, such as Odisha, Bihar and UP to benefit from brand recognition and logistical efficiencies. Most of our stores are already in tier two and three cities. We cater to customers with household incomes between Rs 15,000 and Rs 80,000 per month, focusing on value fashion. While we are not looking at tier four cities due to our store size requirements, we are expanding in localities within tier one cities that match our target demographics. We follow a cluster-based approach, expanding in cities and states where our stores are performing well.
How do you plan to create a unique in-store experience for customers amid the rise of experiential marketing?
While we focus on cost-effective strategies to maintain our competitive pricing, we ensure our stores are well-stocked with fresh, appealing products. We emphasise product quality and value rather than investing heavily in advanced in-store technologies like AI or AR, which our customer base may not demand. Our approach has resulted in significant footfall growth and customer satisfaction.
