Mahindra War Room 2013

Partners Sector - Retail Business

MAHINDRA PARTNERS SECTOR MOMNME RETAIL BUSINESS CASELET Mahindra Partners is the internal incubator of new businesses for the Mahindra Group, supporting a portfolio of existing ventures across Retail, Logistics, Boats, Energy and Media, while constantly exploring new ventures. This caselet pertains to Mahindra Retail Business. BUSINESS BACKGROUND Mahindra Retail opened its rst store in 2009, and in 4 years has expanded to 114 stores with an average area of 3000 sq. feet, across 46 cities and towns of India, with a mission to dominate the Mother & Child space with quality products. Mom&Me stores function as a destination outlet for every need of an expectant mother, infants and kids up to the age of 9. The stores sell products across 11 categories Maternity Apparel (Western & Ethnic), Non-Maternity Apparel (Ethnic), Mother Wellness, Baby Wellness, Kids Apparel (0-9 years), Kids Footwear, Kids Accessories, Nursery, Safety, Toys & Games, and Travel. The stores have a special layout designed for the comfort of a pregnant woman or a mother with children, with a feeding room, places to sit and rest, and a child-friendly oor plan. It also focuses on providing the guidance & support needed to navigate pregnancy, infancy & childhood condently. BUSINESS CHALLENGE: HELP MOM&ME TO INNOVATE AND GROW The Retail Industry has had challenging times, affected by the severe economic downturn and turbulence in the marketplace. Mahindra Retail has focused on ensuring a disciplined operations strategy, focus on store protability and cautious expansion to tide over the challenging market conditions. Many Key Performance Indicators of the business have shown signicant improvement in the last quarter, primarily owing to a strong location strategy. But the key challenges are the need to expand customer base in existing markets, and realize faster growth in new markets. The skyrocketing rental costs in good locations has posed a serious challenge to expansion plans, forcing Mahindra Retail to re-evaluate their store development strategy. There is possibly a need to reduce the store size, improve merchandise and store layout, and optimise the product mix further. There is also a need to improve sales of low penetration products across all categories. Feedback from loyal customers indicates there is scope to expand the merchandise for kids in the 5 to 9 years age group. It has been observed that the stores become protable only after acquisition of about 5000 customers per store - how should Mahindra reach enough of target group customers who are moving into the pregnancy stage in a stores catchment area, so as to acquire 5000 customers in each store? This requires IT Systems to support Acquisition and Loyalty Programs. There is a need to look at
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Mahindra War Room 2013

Partners Sector - Retail Business

developing key afnity builders that can be implemented to excite, satisfy and retain existing customers, preferably before moving ahead to acquire new customers. Due to the nature of its business, Mom&Me attracts customers over a short span of time (-9months to +9 years) with a need to innovate, to increase the Lifetime Value of a Customer and improve revenues from existing customers. With the rapid proliferation of Internet, Tablets and Smartphones, there is increased competition from websites which serve untapped markets. With a good physical infrastructure already in place, how can Mahindra Retail expand into the e-commerce business for its product categories to power growth further. This would necessitate increasing efciencies in procurement and logistics to stay ahead of the competition, and build a strong delivery system as a backbone to the e-commerce system. Considering these pointers, develop a strategy for Mahindra Retail to grow into a USD 1Billion company in the next 5 years, by solving 4 key challenges: a. Reach enough of Target Group customers who will be moving in to the pregnancy life stage in a given catchment area, so as to acquire 5000 customers in each store. b. Know and build relevant afnity builders for this segment that excite, satisfy and retain existing customers, protably. c. Increase the Lifetime Value of a Customer, considering that they spend only a small part of their purchase life currently in Mom&Me? d. Tap the large e-commerce opportunity, convert routine purchases to the web and become a multi-channel click n mortar model by managing knowledge, information and relationship online by adopting new technologies.

Broadvision Perspectives Client Condential

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