Bata’s image and product makeover seem to be paying off | Photo: Dalip Kumar
About two years ago, Bata India reintroduced itself as a trendy accessories brand shedding what was, by then, over a century-old image of being the footwear choice for formal occasions. While this new chapter in the company’s history is too recent to gauge the overall impact of the transformation exercise, the initial response appears to be positive as most numbers compare favourably to the preceding years.
For one, the turnover growth for the company in the first three quarters of the 2018-19 financial year (FY19) has hit double digits, that is, 12 per cent, says Sandeep Kataria, whole time director and chief executive officer, Bata India “which is where we wanted to go”. The company reported strong growth of 51 per cent in net profit at Rs 103 crore in December 2018 quarter (Q3FY19). The footwear company had a profit of Rs 68 crore in the year-ago quarter. The operational revenues grew 16 per cent at Rs 779 crore in Q3FY19 against Rs 674 crore in the corresponding quarter of previous fiscal.
Kataria adds it has been almost six quarters of double-digit growth for the company. He believes that the company’s focus on the millennial consumer has helped. “For women’s contemporary collection, work wear has been a big play; the casual Bata Red Label collection and the athleisure brands have all done well. Power has been a big driver for growth as has been the Bubblegummers brand for children,” he adds.
So how did the transformation journey begin? Kataria says, “We said we needed to update and upgrade. It started with investments in our factories,” he says. There on, the challenge was to draw the consumers to its stores and convince them that the company was serious about the image transformation. So it started renovating the stores quickly even as the marketing side roped in new brand ambassadors like Sushant Singh Rajput, Kriti Sanon or Smriti Mandhana to help the youth identify with the brand. “We thought we had to keep the consumer reappraised so that they take a re-look at it and reconsider the brand. This theme was also reflected in the campaigns with the new brand ambassadors. Thanks to the new look and feel, we consistently hear that when the consumer walks into a Bata store now she doesn’t feel it is Bata,” he says.
Not just the look and feel, the locations of some of the company’s 1,500 plus stores in the country are set for a change with some of them moving from the high streets to malls in cities. In some centres, there is a shift from smaller stores to larger ones in the form of the Red Concept stores with the new ranges on display.
The company is also adopting an omnichannel approach to reach the tech-savvy, often impatient, millennial but so far, the online strategy has largely focused on optimising its own vast retail network. “So, if you went to a store and found the shoe you were looking for, but we couldn’t get you the colour or the size, the team at the store now has an app through which they can check the stock of that particular article in their neighbouring Bata stores within a radius of 10 km. So, if the customer is willing to wait for 15 minutes, we say we will get it for you. In case she is unwilling, we will deliver it to her doorsteps,” says Kataria.
Fashion designer Suneet Varma says for any fashion brand to survive in this day and age, it has to be in a state of perpetual change because the millennials are not even living with the current fashion trends, they are living in the future. “There are very few brands in the world that have been able to sustain themselves using tradition. Most have to reinvent the brand every two/three years now,” he adds.
But such a change would likely come at the cost of some of the goodwill that the brand has earned over the decades among a different consumer set, isn’t it? So where does the traditional customer fit in in Bata’s new scheme of things? If Kataria has to be believed, they have little to fear. “Despite the changes, we are mindful that 60 per cent of our articles that have been been our mainstay are continued,” he says.
Deloitte India’s recent Rise of S-Commerce in Millennials Shopping Journey report suggests that footwear is increasingly becoming a necessary style statement among all categories of consumers. Rising incomes, globalisation, and improved employment and living standards in the country have led to the expansion in the market size of apparel, footwear and accessories. Does that mean an escalation of costs for Bata products also?
Kataria says the company will continue with its mass to mass premium positioning. “We are very clear that we are not a luxury brand in India. We don’t want to go out and talk to the 1 per cent of India. They are welcome and they will also find the footwear they need,” he says.