Tailor-Made For Perfection
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As a teenager, we have at least once borrowed our parent’s clothes for some special occasion or the other. For girls, it is generally their mother’s chiffon or silk sarees, for men it is their father’s suit or tie. While the six-yard cloth is a beautiful garment in itself and no brand can take the credit, but if it is a suit, it has to be Raymond!
The brand is the reason why most of the Indian men look so dapper in their wedding or graduation pictures. If you are planning to invest in a suit – the first thought and probably the only brand that comes to your mind is Raymond.
As a brand, Raymond has been helping men suit up since 1925. But do you know when its first store opened? It was in 1958 when the company’s early promoters felt the need to display the entire portfolio under one roof at their flagship store in Ballard Estate, Mumbai (then Bombay) as the textile sector in the country was quite fragmented.
What started as a showroom then has today evolved into a business model — the Raymond Store (TRS). Presently, the company boasts of over 900 stores. In a conversation with Entrepreneur, Mohit Dhanjal, managing director-retail, Raymond Limited and the man behind Raymond’s successful franchising journey shares the brand’s culture and values along with what is contributing to the nine-decade-old company’s growth.
Gen Next of Franchise
The legacy of Raymond is such that one of the first few stores, which was opened in the North of Delhi is still operational. Similarly, most of the company’s franchisees are operated by second-third generation franchise partners with an average age of 30-35 years.
For Raymond, the exponential growth is a result of the 5Gs - Competitive Growth (faster than the competition), Profitable Growth (+ve EBIT), Sustainable Growth (continuous year on year), Inclusive Growth (Company and Franchise partners) and Experiential Growth (enhancing customer experience).
Discussing what excites Raymond about their franchise partners, Dhanjal says they are constantly looking for four major components in entrepreneurs.
“Apart from financial hygiene, entrepreneurs need to be obsessive about their customers, provide value for money and yet best in class product and services along with relationship building skills.
Additionally, they also need to blend their business values with Raymond — they need to have transparency, accountability, collaborations, meritocracy and bias for action as the fifth cultural pillar” he says.
Apart from getting new partners on board, it is equally important for the brand to maintain the relationship for sustainable growth.
According to Dhanjal, expecting the franchise to start performing from day one is like building a castle in the clouds; instead, he suggests one should focus on their business model.
“You need to mentor and educate the franchises while at times you also need to coach the franchise. At Raymond, an area manager is tagged along to help the franchise and his role evolves as per the franchisee’s requirements,” he adds.
Expanding its Reach
If you travel back in time, the company took 90 years to set up 700 stores while on the other side, it took 19 months to open 200 stores — thanks to the extension of the TRS model to Mini TRS, which is smaller format store approximately 800 – 1100 sq ft space with roughly about Rs 50 lakh investment.
Most of these stores are targeted to tier VI and V cities, which has helped the company grow even when the consumer sentiment is at the nascent level.
Elaborating on Raymond’s passion to serve in these towns, Dhanjal says they are emerging towns and thanks to the digital exposure and access to information through our handheld device, consumers in these markets have high aspirations.
“We have discovered that they have access to disposable income, but hardly have any avenue to spend. Look at the e-commerce industry, 40 per cent of their business comes from these towns and yet, a lot of these locations don’t get serviced by the logistics firm,” he explains while adding that, “So, we realized they knew brands but didn’t have access. So, when there is a wedding in the family, they would travel to larger stores to shop. When we were setting our stores in these markets, the kind of response that we got was tremendous. Of the 200 stores that we set up, almost 70 per cent of our stores are doing 2x of what we had estimated.”
Presently, the company is aiming to set up another 100 stores by the end of current financial year i.e FY2019 and will continue to add 100 stores every year going forward.
What also makes Mini TRS a sustainable model is also Raymond’s portfolio of products, which starts from shirt fabric worth Rs 150 per meter to a suit length at Rs 3 lakh. Not every store stores all of Raymond’s 50,000 products. What sells in metros might not sell in tier V towns, hence the company lets the franchise decide what it wants to market according to a particular city and its consumers’ taste while the brand takes care of the look and feel of the store.
Keeping Pace with Time
Dhanjal believes technology doesn’t disrupt your businesses. The disruption is the result of one’s stubbornness to change. Instead, it opens new avenues for entrepreneurs to grow. Giving us an example, how Raymond is embracing technology, he shares the story behind Raymond’s reward program and other examples.
When the e-commerce wave hit India, the company realized that the way these new-age technology companies are able to mine information from a consumer, Raymond didn’t have any such platform to do that. So about four years ago, they revamped Raymond’s Rewards Program and rolled out a new platform.
“Using technology, today, I know my customer shopping patterns and with time, through machine learning, we can get information to predict what he is going to buy next,” he notes.
Furthermore, as smaller stores may not showcase the entire portfolio. So, if the customer wants to browse to additional products, he can use Raymond’s Interactive Kiosk at the store, select a product and get it delivered at his preferred location.
But what Dhanjal sounded most excited about is the StyleMe, which is one of its kind magic mirror that is powered by augmented reality. “This will help the customer understand how the fabric will look on him and he can browse through a catalogue of patterns from tuxedo to Nehru jackets,” he explains.