Case - Retaining Profits at Apna Bazaar

RETAINING PROFITS AT APNA BAZAAR*
Rahul Jamwar* sipped his coffee in his cabin at his new workplace – Apna Bazaar, Mahatma Gandhi
Road Store, Indore,*. He wondered about the task in hand – rescuing the decade-old store from falling
profits. His two years of experience with the firm, during which he was posted at the Head Office in
Delhi, has given him a keen insight into the structure and dynamics of Apna Bazaar outlets. He had
conducted several market research studies to suggest effective interventions to improve store
functioning. Here was the first opportunity for him to see how things work out at ground zero.
Rahul began his career as a software engineer from a top-ranked IIT in India. He was placed in
Accenture Technologies, where he quickly rose to the position of the Team Leader. However, when
the work started getting repetitive, Rahul left his job to complete his post graduate course in
management from one of reputed business schools of India. Being one of the top performers of the
batch, Rahul was placed with Apna Bazaar, one of the leading apparel store chains in India as a trainee
in marketing. His performance for the last two years had been exemplary, as he effectively employed
his management lessons to design market research activities and conduct sophisticated market
analyses for his firm. As a recognition for his performance, at the end of his two years’ probation,
Rahul had been placed as the Store-in-Charge of the Apna Bazar Store at Mahatma Gandhi Road in
Indore.
‘Treat this as a challenge to your skills, and to your training as a manager’, the CEO had remarked, in
his office at the headquarters of Apna Bazaar in New Delhi, ‘You have proven your mettle in reading
the pulse of the customers for our various stores. Now is the time to implement what you recommend,
in person.’
*Names changed for issue of privacy
Apna Bazaar
Set up in 2005, Apna Bazaar dealt in apparel trading – both in branded clothing as well as in their own
private brand – Shaukeen. From a modest start of a single apparel store in New Delhi, Apna Bazaar
has expanded to set up retail stores across India, in 17 states. In a market fraught with tough
competition from foreign brand stores, as well as local store chains such as Pantaloons and Reliance
Trends, Apna Bazaar managed to carve out a niche for itself. Apna Bazaar attributed the success to
variety in offerings, wide price range – which attracted footfall from customers of different income
groups – and customer-friendly service.
The MG Road Store

The MG Road Store was one of the oldest stores of Apna Bazaar. Located in one of the busiest
intersections of the city, the store had always made good profits – thanks to a loyal customer base
and to the employees who have been working there for long. Much of the workforce had been there
since the inception of the store. Since the employee base was drawn almost entirely out of the local
population, they could converse easily with the customers and cater to their specific needs.
Situation at the Store

Rahul met the three store supervisors – Mr. Vinay Singh, Ms. Sushma Rao and Mr. Aditya. While Aditya
was in his early thirties like Rahul, the other two supervisors were in their late fifties – and had been
with the store since it was set up in 2005. Rahul met each supervisor separately and gathered news
about the situation. The supervisors gladly welcomed Rahul to the fold – but had bleak news to share
about the store. The profits have been dwindling for the last few years. They pointed out that this has
been due to setting up of the I-bus route away from the MG Road; I-Bus was an AC public transport
service that has become immensely popular in Indore. Thanks to the I-bus, people found it
increasingly convenient to visit the faraway malls of C21 and Malhar, and adjoining cloth stores, and
thus were avoiding the off- route store of Apna Bazaar. Although the bus stop before Apna Bazaar was
an usual halt for the college buses of Indore’s major educational institutions, the store was missing
Indian Oil Saksham Leadership Development Program at IIM Visakhapatnam. January 2021. Bishakha
Majumdar.
out on the general crowd who commuted by the I-Bus. Mr. Singh also pointed out that the store set-
up would benefit from seasonal decorations – to attract customers during the festive seasons. Ms.
Rao suggested that the store could have a section specializing in local attractions – such as
Maheshwari and Chanderi silk sarees.
What Rahul Saw
Rahul spent his first week interacting with the sales assistants. He made it a point to know each sales
assistant by name. He interacted with them in a friendly manner so that they are comfortable in his
presence and not awed by his pedigree, which, he gathered, had already become a major talking point
in the store. He found out from the workers that they are worried about the store getting closed –
owing to poor profits. Many opined that the store would benefit from a relocation on the I-Bus route
– where many new apparel stores were coming up.
Within a few days, Rahul noticed that the store had a number of internal problems. Although footfalls
were dwindling, there were still long queues in front of the dressing rooms and at the check-out
counters. The counter staffs were not tech-savvy and were slow with the new computerized check-
out systems. The on-floor sales assistants were not quick in their movements and grudgingly
responded to the queries of the customers who asked for specific SKUs, other than those on display.
He also noticed that the mannequins were often not accessorized appropriately. When asked, the
sales assistants responded that since these tasks were not specifically allotted to anybody, they often
expected someone else would have already done it.
A glance at the salary structure of the employees told Rahul that the performance pay formed only
10% of the salary of the employees. Salary increased with seniority – and turnover had been negligible
till last quarter, when three floor-workers left jobs in a month. Rahul found out that all three had been
young employees who are new recruits – and have had reasonably good performance. They had left
to join the neighbourhood supermarkets of C-21 and Malhar.
Over tea, Rahul told to one of his friends, Liza, Store In-Charge at Greater Noida,
“We need to let go of our collective obsession with the poor location of the MG Road Store. I admit
that the location is a problem, but there is little we could do about that now. The firm would not spend
on relocation, given our expansion plans with Shaukeen abroad. However, there are several other
issues we can handle right now. Unless these issues are removed, footfall would dwindle even if we
change our location!”
“You seem confident about your analysis.” Liza said, “I do hope you nail the problem at the first go. It
is common knowledge in the firm that the CEO is taking a personal interest in your activities here. He
is looking for a Marketing Head for Shaukeen’s international division – and your chances are real
good.”
Q. Imagine yourself as Rahul. What are the steps you are going to take next?
Majumdar.
Majumdar.

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RETAINING PROFITS AT APNA BAZAAR*

The MG Road Store

Situation at the Store

What Rahul Saw

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