'Online shopping may be convenient, but experience of brick and mortar stores will always survive'

If you are going out shopping today, multiple local and foreign brand outlets are eyeing your attention. Over three decades ago, the choices were extremely limited. K Raheja-owned Shoppers Stop was among the pioneers of modern retail outlets and departmental stores. B.S. Nagesh, who was hired as a general manager to build Shoppers Stop and who went on the become the company's MD before stepping back to set up the not-for-profit organisation TRRAIN, has recently penned a book, titled 'SERVE: Business from the Heart', on this journey. In a conversation with THE WEEK, he talks more about the book, the triumphs, the mistakes, the evolution of quick commerce and more...

Could you tell us more about your book? Why this title and what was the idea behind the book?

After I stepped out of Shoppers Stop as the managing director in 2011, and I started my charity group, it was great. I have been meeting a lot of entrepreneurs, meeting a lot of students, groups, and company professionals, and everybody has been telling me after my talks, you should write a book.
I attempted it multiple times and then realised that this was not my cup of tea. I need some help to write this because I can talk, but I can't express myself in words in a book. And that's when I actually went and met Crossword. I said, I really want to pen this book, how should I go about it? Finally, Ritu Ferrao became my co-author.

We had targeted 12 months to deliver this book, but it took us more than 18 months. This is a story, this is neither an autobiography nor a management book, it's not a prescriptive book. It is a book about the building of a brand and its journey through the eyes of somebody who had been part of it. That is the way the book has come.

We had the manuscript ready about three months back. During the journey, we said, what should be the title of the book. Ritu identified 6-7 things as part of my journey. First, I wanted to serve the country by joining the army. And I had got into the army. But being the only son from a south Indian family, there was a hue and cry. They thought if I joined the army, the next day I will get shot. They didn't allow me to join the army. But I always wanted to serve the country.

I was talking to her about my story of playing badminton and doing fairly well at the district, city and state level. And I used to always talk about the service that actually made me win games. Then we started talking about the Shoppers Stop journey and everywhere it used to be only customer centricity because I am not a retailer who has run department stores before starting Shopper Stop. So the word care always came in, service always came in. And then when I stepped out of Shoppers Stop, I started TRRAIN, the not-for-profit, which was also about serving the community and building the community.

This book is about your journey in the Shoppers Stop years. When you look back, what are the biggest thoughts that come to your mind?

The first thing is that you need to dream big. Some of the dreams which are unachievable are the ones you can really chase.

The second thing, which if you see is a unique case in the world of business where an employee, the first employee of the company, was allowed to run a business like an owner. Till the time we went for an IPO in 2005, nobody realized that Rahejas (real estate developer K. Raheja Corp) are the owners of this business. Everybody thought I was the owner of this business.

The third was the teams that we built. In the first two years, not a single person was from a tailoring background or from a parallel fashion background. The only thing we looked at, whether by default or by plan or by luck or stroke of luck was, people who had the will, people who were passionate about things. What that did was that we had no baggage.

I am a very strong believer that collaboration is more important than competition. So we actually got our partners to work with us. In 2005, when I realized that if we have to grow, the industry has to grow, Shoppers Stop cannot grow alone. I met our competitors and said we need to set up a retail association. Tthey all came together, and supported me. I was the first chairman of the association. Today the association is the biggest retail body in the country which talks about retailing.

So collaboration is a very important thing. And that I think is critical. If you want to do the retail business or any business, customer centricity is very important. You just want to serve the customer. I can give you an example.

One day I got a call at 5am in the morning from Hyderabad from my security supervisor. The store manager wanted to open the shop. And this is not as per our protocol. The store manager said they had got a call from Satyam Computer (once the fourth largest IT firm, later acquired by Mahindra) that they had a board meeting and the baggage of a board member who had arrived from the US hadn't reached. They thought that Shopper Stop could help. So they connected with the store manager. We are talking about opening a 30,000 square feet store at 5am in the morning. This person came into the store and bought a full range, must have spent Rs 40,000-50,000. That customer became a brand ambassador. And that company, till the time it existed, all their bulk purchases happened from us.

Shoppers Stop was a pioneer in department store retailing in India. But, many players that came later got much bigger. In one of your chapters, you talk of being disappointed with the kind of growth that the company did. Would you have done things differently?

We tried and probably we gave up things a little early. In the year 1998-99, we set up an online business, which was probably India's first or second online business. It was fully functional, with technology, with everything. We were transacting. But unfortunately when I went to the board, I was not able to present a business case. I did not know what the profitability will be and what the size and scale will be. I couldn't take the business case forward and we closed it. At the same time, John Lewis in the UK started online. They sustained for 15 years. And today 55 per cent of their business comes from online.

If you look at HyperCity, it was probably one of the best hypermarkets of the country. We built it, but we went too fast into too many places. I think we have had these kind of mistakes. And in hindsight, maybe we were ahead of time. Maybe we should have brought more capital in. Or we should have looked at things differently. We should have focused within one region.

Department store is all about the experience of shopping in a large store. How do you view the current quick commerce boom, where everything is delivered home in minutes and you feel the whole experience of going to a store and shopping at a store is getting lost?

To me it is the experience with which you survive. Touch and feel will not go, especially in India. Because in India there is no other social activity for Indians. We don't have parks, gardens, lakes etc.

So, you will always find that touch and feel brick and mortar will come back. But the brick and mortar is not able to capture the growth in the pie at a national level, which is what online has done.

If you talk to online companies, they are telling you that 85 or 90 per cent of the business is coming from 20,000 or 21,000 pincodes, where brick and mortar has not reached. And when brick and mortar reaches there, it is able to get a substantial share. But it comes at a cost. For online, once they put in the tech, the capital investment to go to a new city costs very little. But in brick and mortar, every new city is a new capital investment.

I don't believe brick and mortar or touch and feel will go. But, with the change of generation and the generation behaviors, online is becoming a much more convenient way for them to shop. We close our stores at 10 at night. These kids start shopping at 10 at night. You are missing them. Their way of looking at things is very different.

Across the world retail has developed sequentially. Walmart became very big before even Amazon came in. In India, from a brick and mortar, to a supermarket, to a wholesaler, to online, to quick commerce, all has happened within 20 years (2001-2024).

In India, the penetration of modern retail is not even 20 per cent. Whereas in the US, it is 95 per cent, Thailand is 85 per cent. Some retailers (in India) will take time to grow, some will combine to grow omnichannel. There will be new methods that will evolve. You will see a lot of retailers falling off the side. Because, firstly, they don't have capital. Unlike the farmers who get support, this government doesn't support the trade. Retail ecosystem has to be supported as much. We are forgetting the fact that farmers can produce as much, but If the trade is not able to sell, your produce will remain in the warehouse.