Shoppers Stop to link physical stores with Amazon shopfront

Shoppers Stop at Seawoods Grand Central Mall

Department store chain Shoppers Stop, the pioneer of organized retail in India and one of the country’s largest retailers of fashion and beauty products, will connect its individual stores to its Amazon shopfront by next month as part of its omni-channel strategy.

It also said it would focus on Tier 2 and Tier 3 towns and on smaller stores going forward.

Like other large-format retailers, Shoppers Stop too has been hit hard by the ongoing Coronavirus pandemic, and saw its revenue decline by almost 95% during the April-June period as malls remained closed.

Most of the company’s 84 stores are very large in size, and many of them span multiple floors within malls.

The company’s mall-focused retailing strategy has been especially disadvantageous as malls were among the last public spaces to be reopened as a part of the phased, nationwide easing of lock-down restrictions imposed in late March. In many cities, malls remain closed even now.

This has boosted the relative share of online sales in Shoppers Stop’ revenue.

Against the 1-2% contribution from e-commerce, online sales accounted for 18% of the company’s top line during the Apr-Jun period as customers preferred to shop from the safety of their homes.

Moreover, the e-commerce business has turned profitable on a ‘variable contribution’ basis, which essentially means that the company’s losses from the business do not increase with increasing volumes.


Shoppers Stop, part of the K Raheja group, was founded three decades ago at a time when most Indians hadn’t even heard of modern retailing or seen a department store.

To adapt to the changing times, the company has been working on an ‘omnichannel’ strategy encompassing multiple modes of selling its goods.

As a part of the transition, it has been upgrading its core IT infrastructure, and implementing two technology solutions, the GRAVTY loyalty engine and SAP HANA ERP. These, said Nagesh, will finally allow the company to see its customers ‘as one’, whether they are shopping online, at a store or via any other program or channel.

Nagesh called the impending connection of Shoppers Stop’ physical stores to its e-commerce engine a ‘big moment’ for the company, as it will obviate the need for the company to maintain two sets of stocks — one for online and one for physical stores.

“[This] means that when the customer shops on Shoppers Stop on Amazon, they’re actually seeing our store inventory. We are still targeting that by the end of this quarter, the second quarter [September 2020], the connect should happen. That should be a huge movement in terms of the shopping and the delivery, because if you are in Andheri and we identify the stock to be sitting next to you in Andheri, the delivery could be the fastest,” he said, commenting on the company’s Apr-Jun performance.

Currently, not only does Shoppers Stop keep two sets of inventory, it also has to do this at multiple e-commerce warehouses across the country to make sure that garments, beauty products and other items can be delivered quickly when ordered online.

Nagesh said the idea is to deliver its products within 24 hours of ordering, and once the ‘connection’ is made, it will be an easier task.

“That’s the big advantage that we will get. It’s a big moment for us.”

He, however, added that not all the 84 stores will be connected to the e-commerce engine.


The company, known for its premium assortment of goods in large department stores at premium locations, also said it will tweak its store expansion strategy going forward, incorporating the latest learnings.

Nagesh said Shoppers Stop’s expansion plan “remains unchanged from may be the number of cities that we want to go, but it definitely changes from the [angle of the] size of the format in the cities.”

As the impact of e-commerce would be felt more on metros and top-tier cities, Nagesh said his company believes that there is still space for the expansion of modern retail in smaller cities, though the size of the department store may be different.

“We will be more focused on Tier 2, Tier 3. We will be more focused on models where the capex can be reduced dramatically by the landlord sharing the capex,” he said.

As for the format, he pointed to the store opened in the Seawoods Grand Central Mall earlier this year (see photo on top).

“..[in] that format, we saw returns within the first two months and it’s a very small format, 15-18,000 square feet. That’s the format that we’ll probably take to Tier 2, Tier 3 cities, where the returns will be faster, the breakeven will be faster and the payback will be faster,” he said.


Nagesh, who has been with Shoppers Stop since its inception nearly thirty years ago, said he doesn’t expect e-commerce to overtake brick-and-mortar volumes in the next 2-3 years, despite the impact of the pandemic.

In fact, he said, if one takes India as a whole, e-commerce will not be the primary medium of sales even in the next 5-10 years.

“In India, the online contribution is 3%. If it doubles every year, it will be at 15-20% over the next 3-5 years,” he said.

He pointed out that many Indians have never been inside a mall, and therefore, there is an opportunity for such experiences to expand to include more and more people in the country.

“If you look at the penetration of malls and shopping centers creating an experience for the customer, and likely a first-time experience, it is yet to happen in many of the cities. So, as you go forward, we believe that the customer will continue to come to physical shops and malls, because I believe there is entertainment which will happen, theaters will come back,” he said.

At the same time, he said, no retailer can afford to ignore new the opportunity, and there will always be leaders and laggards when it comes to tapping it, he added.

“Even if you look at the UK market, and if you look at the average of the UK market, you have 18% or 20%. But you have an outlier in John Lewis, who’s doing at 40% average and suddenly hits 60%. So there’ll be outliers.

“So people like us have to work on online capabilities and therefore build online capabilities. But do we expect to see 40-50% coming from online in the next 2-3 years, I don’t think so,” he said.