Croma stores, which sells consumer durables from Tata Sons-promoted Infiniti Retail, is planning to launch a new format under the concept of ‘neighbourhood’ stores.

A pilot is underway in the national capital, whereby it has opened relatively smaller stores, measuring about 1200 sqft, with a different assortment and design, compared with the firm’s regular 100-odd stores.

Meanwhile, Croma is renaming its Zip brand to suit the neighbourhood store concept. The brand was initially started to signify smaller stores and currently has about eight stores at airports.

“We are not extending the branding for Zip and it will be replaced with a new name which is being developed in house.

Even the airport stores under Zip will now sport a new name. A US-based design company (Chute Gerdeman) is already on the job of designing the new format that we are currently piloting at Green Park Market in New Delhi,” said Ritesh Ghosal, Chief Marketing Officer, Croma.

It is testing the new concept store which will cater to the ‘leisurely’ neighbourhood shopper, and thus the name of ‘zip’ is going to be redundant.

Strategic shift

Having exited Punjab, where it had made strides into smaller markets such as Amritsar and Jalandhar, Croma is now planning to focus on its strong markets such as Gujarat and Maharashtra.

Post GST, since there are no costs on inter-State transportation, it has decided to penetrate deeper into smaller markets.

“We will move deeper into smaller cities such as Solapur, Kolhapur and Sangli in Maharastra, having exited Punjab in the pre-GST era due to tax issues,” he said.

Currently, the firm has 100 stores; its nearest competitor Reliance Digital has 275 stores. A a host of regional players such as Pai and Viveks in the South are also competitors.

Online threat

With a sales turnover of ₹3,200 crore, Croma’s immediate challenge, however, comes from online players such as Paytm with their disruptive pricing strategies. “More than the offline players, it is online players such as Paytm, which pose challenges for us at the moment.”

Croma is now relying on its own online site to generate sales and has removed its presence from e-commerce platforms such as Flipkart and Snapdeal.

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