Strategies to elevate customer experience, strategies for fast-selling SKUs, strong private label strategies, strategic pricing, efficient store locations, influencer collaborations, user-generated content, loyalty programmes, global brand partnerships, strategies for community building are all contributing in the growth of the various players in the fashion retail sector.
This mix of strategies work like a guide, helping the retailers navigate trends, customer preferences and even technology. For example, Trent Ltd.’s partnership with Inditex brought brands like Zara and Massimo Dutti to Indian consumers just as Reliance brought home brands like Superdry, US Polo, Steve Madden etc. However, there has been still a significant gap in India’s fashion retail ecosystem and to address the same, retailers have launched their very own affordable brands in the market to cater to the consumers with crisp strategies and excellent brand positioning. Be it in segments from value to premium, an array of Indian brands are competing with international brands to provide the best style at the best price, focusing on the consumer’s desire to look stylish at their ‘ideal price’.
|Zudio continued with its aggressive store addition strategy and added 125 new stores to its portfolio in FY 2023 totalling 352 stores by FY 2023 end. In terms of cities, Zudio entered 28 cities and expanded its presence in 38 more cities in FY 2023.|
A few such brands are Azorte competing with H&M, Roadster challenging Pepe and Levi’s, Louis Phillipe, Ralph Lauren. Additionally, within this ecosystem, certain brands like Reliance’s mens wear line Netplay, DNMX and Teamspirit, which have very similar design feel and quality and range of products including T-shirts, socks, shirts, trousers, bottoms, are experiencing rapid growth, outpacing brands like Superdry, Scotch & Soda and US Polo in a nutshell. Similarly, Trent Ltd., conceptualised Zudio, a brand that is trend-focused like Zara but offers products at approximately one-third of its price. This move has proved to be strategic, especially during times of high inflation and less luxury spending, making Zudio an ideal pocket-friendly yet super-trendy alternative appealing to the young consumers who are trend-conscious.
Case study: Zudio’s Strategies
Zudio’s success can be attributed to a variety of strategic choices that have set it apart in the Indian market. First and foremost, its 100 per cent private label strategy has control over the entire product journey from design to distribution, resulting in competitive pricing and high-quality products.
It sets itself apart by prioritising offline growth, creating unique in-store experiences with organised displays. When it comes to ambience, Zudio’s stores follow a simple and effective approach – a minimalist black-and-white aesthetic that omits any unnecessary overhead costs, directing attention solely toward the variety of its garments. Unlike traditional stores organised by style or size, Zudio organises its racks by price, allowing customers to easily find offerings within their budget in one glance.
By focusing on fast-selling items and leveraging parent company Trent Ltd.’s efficient sourcing, Zudio maintains quality while offering competitive prices. Its access to cost-effective suppliers allows it to keep all products under Rs.1500 and average price at Rs.500, appealing to budget-conscious shoppers. With 71 per cent of young Indians seeking quality lifestyle products, Zudio’s pricing strategy aligns well, leading to rapid sales growth.
|Trent’s FY ’23 numbers were strong as footfalls bounced back, store additions were higher and performance of Zudio scaled up. Innovation in the product portfolio, scaling up of supply chain, 100 per cent contribution from own brands, aggressive store expansion and leveraging on digital presence will be key growth drivers.|
Not only this, its strategic store locations in city outskirts, Tier-2 cities and towns have helped minimise competition, keep costs lean and resonate with local shoppers. The commitment to dynamic inventory management by introducing new products weekly prevents the accumulation of unsold inventory and keeps the collection fresh.
Not to forget Zudio’s operational efficiency, inspired by Zara, which relies on the value of its products to attract customers and its adoption of franchise-owned company-operated (FOCO) model for streamlined customer service.
Moreover, what sets Zudio apart is its clever marketing strategy with almost negligible costs as it believes that ‘word of mouth’ is the only powerful channel. It is accurate to state that Zudio in just 7 years boasting of approximately 350 stores, is set to soar, propelled by the opening of around 130 new stores within this calendar year. This expansion initiative aims to bring Zudio’s total store count to 500 marking a significant step in its offline expansion. Zudio’s gross revenue stood at Rs.3200 crore+ with EBIT margins improving by 100 bps y-o-y to 7 per cent. The company added 125 Zudio stores (119 stores net addition) in FY 2023 and will be adding 200+ Zudio stores in FY 2024. With a run rate of selling 2 million garments per week in FY 2023 has propelled Tata to shift gears and accelerate the brand’s expansion even further.