The Indian offline retail market still commands the largest share in terms of consumer preference for shopping behavior. While online market penetration is at 8 percent, 92 percent is still offline in India. So, for any brand to penetrate deeper into the market, it must take the offline route and enter the retail market. Hence, many D2C brands like The Ayurveda Company (T.A.C), Madbow Ventures Limited, Earth Rhythm, The Sleep Company, Brillare, and Chemist At Play have made their entry into the offline retail market recently.

Offline retail or popularly called brick-and-mortar retail can offer big business opportunities. In today's time, for any brand, it is crucial to reach out to the consumer through an omnichannel presence. Even though most consumers are now finding online shopping more convenient, offline stores also offer an experiential shopping experience. Further, since offline activity is on the rise after the slowdown of the pandemic, this is the right time to enter the offline space and share the brand values and story to create a strong connection with consumers.

Going Offline

The Ayurveda Company opened its first exclusive brand outlet (EBO) last month, at Pacific Mall, Pitampura, Delhi. It expects the next 5 EBOs to be operational by this month's end. By Diwali, the brand plans to have 50 offline touch points pan India. Going forward, it aims to create over 10,000 touch points through EPOS, including EBOs, SISs, GT, and MT in the next 2 years.

“For the current financial year, we are forecasting a 30 percent contribution from the offline business and the rest of 70 percent from online. However, the next couple of financial years will see growth, and we tend to make the split equally between both the business platforms,” Param Bhargava, Founder of T.A.C said.

Similarly, Madbow Ventures Limited has recently launched two exclusive brand outlets of its in-house brand Street Style Stalk. The company is planning to launch 8 more EBOs in the next 6 months to take the total count to 10.

“From our offline business, we are expecting around 30-40 percent of sales within 12-14 months. At present, our focus is on creating an offline presence, and for that, we think a mid-size store with a range of 1,000-2,000 sq ft is sufficient to meet our target,” Naveen Mahalwat, Co-Founder, Madbow Ventures Limited stated.

Earth Rhythm, too, recently launched its first kiosk in the country. The brand is planning to open two more outlets soon. It further has plans to open around 50 kiosks across India.

“The offline retail will make us achieve our target of spending our investments in a 70:30 ratio of online to offline. We will primarily be using the kiosks and the shop-in-shop format for expansion,” Harini Sivakumar, Founder & CEO, Earth Rhythm asserted.

The Sleep Company has also unveiled its first store in Koramangala, Bangalore this month. In the next 6 months, the brand will be making an aggressive offline push with plans to launch 25+ stores in metros and micro-metros. Each store will be company-owned and operated (COCO) and will function on a phygital (omnichannel) model where customers can cash and carry small products from the store while placing orders online.

“In the next two years, we expect offline to contribute at least 30-35 percent of our total business,” Harshil Salot, Co-Founder, The Sleep Company asserted.

Meanwhile, Brillare has established a footprint with 6 EBOs in cities like Ahmedabad, Surat, Delhi, Kolkata, and Mumbai. Further, it is planning to expand to 50 stores by the end of the financial year. The brand is operating these stores in a company-owned company-operated business format however with the expected growth in EBOs, it is open to converting to a company-owned franchise-operated format if required in the coming years.

“In the coming time, offline business would be a major pillar of our overall business by contributing at least a quarter of total revenue share,” Jigar Patel, Co-Founder, and CEO, Brillare said.

Similarly, Chemist At Play currently has 13 stores. The brand is aiming at growing exponentially over the next couple of months, targeting modern retail stores/specialty lifestyle format stores.

“By the end of next financial year, we are looking at 20-30 percent of our overall revenue from offline channels,” Sifat Khurana, Co-Founder, Chemist At Play added.

Targeting the Right Audience

T.A.C is targeting Tier-I, II and-III cities for expansion. Keeping its ideology in mind, millennials and Gen–Z, 25-35 years old, is the brand’s primary target audience. Chemist At Play is also targeting Tier-I and-II to strengthen its footprint, targeting the age group of 21-40 years. Whereas Madbow Ventures will initially focus on the Delhi NCR market, targeting females who are willing to explore the latest fashion trends at an affordable rate.

“Since T.A.C. has already built an online presence within its first year, with offline, it is time to give an end-to-end experience. Beauty and personal care is an experienced-based market where the consumer is interested in the fragrance, texture, and feel of the product to make the purchase. Exclusive brand outlets serve as the platform for activities that gives the consumer an experience through sampling and direct outreach,” Bhargava of T.A.C said.

“Omnichannel presence drives higher conversion rates and boosts average purchase values by leveraging the expertise of the store staff. For digital-first brands, having an offline store can allow them to own the entire customer journey. On top of that, with the omni data at their fingertips, store associates can capitalize on the customer’s shopping experience,” Madbow Ventures’ Mahalwat added.

Targeting millennials with its EBOs, Brillare is planning to deepen its presence in the top 30 cities in India and also open up retail locations in Tier-II cities that can help it to reach out to untapped territory and connect with the aspiring millennials generation. Similarly, The Sleep Company, forging ahead into the offline market, will be opening retail stores in strategic locations in states like Karnataka, Hyderabad, Kerala, Chennai, Maharashtra, Haryana, and the Eastern regions of India.

“During the last two years, Brillare has built a formidable presence across the digital space with a strong presence across channels like our brand website and more than 15 marketplaces. However, the digital world has a major limitation that restricts consumers from having a touch and feel of the products. So, in order to be a true omnichannel brand and have higher touchpoints with consumer interaction, we have adapted the strategy to ramp up our offline presence. We have a plan to have our presence across all premium malls in India to create a direct connect with users who are more comfortable shopping in a retail experience,” Patel stated.

Product Assortment

Earth Rhythm recently came up with the foaming cleanser, the lash and brow growth serum, and the mineral SPF 50 matte. The brand has now lined up a whole new makeup product line.

“Some of our best-selling products are the SPF 50 Ultra Hybrid, Lip and Cheek Tint, and the Lip Masque. Our average price point lies somewhere around the Rs 700 mark,” Sivakumar said.

Brillare is coming out with several new products, ranging from skincare to haircare. The brand will be having freebies and trial packs for offline consumers. Also, Madbow Ventures has new collection launches every month across its categories like footwear and dresses. Besides these, the company has launched glasses and accessories, especially for its EBOs.

T.A.C has recently launched India's first ayurvedic babycare range, Dashapushpadi - for complete care of babies, toddlers, and kids. Next in the pipeline, the brand will be launching a haircare revolutionary regime with Bhringaraj.

“We operate at an average selling price of Rs 249-499. Our top-selling category for premium facial care is Kumkumadi regime with 24 Karat Face Wash, Face Scrub, 100 percent Kumkumadi Oil, Day Cream, Sunscreen, and Night Gel,” Bhargava said.

This year, The Sleep Company entered two new categories within the furnishings and seating solutions space with the launch of its zero-gravity bed the Eleve8 Smart Adjustable Bed Frame, and its SmartGRID Chairs, respectively. Looking ahead, the brand plans to expand its product portfolio to include more furnishings as well as more seating solutions based on the tech like vehicle seats, gaming chairs, etc.

READ MORE: How Bright is the Future of the D2C Market in India

Investment in Offline Biz

T.A.C plans to invest Rs 100 crore in the offline business in the next couple of years while Earth Rhythm would be putting up 20-30 percent of its investment into the offline channel.

Madbow Ventures will be using the current funding to expand its offline presence in different parts of the country. “Looking at the plan, we may invest around Rs 8-10 crore to grow our offline business,” Mahalwat said.

Brillare will be investing more in digital screens in its EBOs. “We have digital screens on all our EBOs that create a visual appeal to the consumers and explain to them how to use our products and other brand videos,” Patel asserted.

In the next two years, The Sleep Company wants to become a Rs 500 crore business. “With our extensive expansion strategy in the next 5 years, we expect to command over 10 percent market share of the overall Indian mattress market,” Salot concluded.