Crossroad's Retailing Lessons

Details

Themes: Retailing
Period : 1999-2000
Organization : Crossroads, Piramal Enterprises
Pub Date : 2001
Countries : India
Industry : Consumer Goods & Services

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Case Code : BSTR005
Case Length : 6 Pages
Price: Rs. 200;

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"I was shocked by the new rules. When questioned, the security guard said it was for my own safety. This was the way to keep the phaltu crowd away."

- An angry Sunday shopper

"Not even Harrod's stops people from entering the store. There could have been better ways to screen out undesirable elements."

- Vineet Chadha, Director, Celebrations

Crossroad's Retailing Lessons

In the first week of August 2000, visitors to Crossroads, a retail mall, saw a polite notice informing them that a mobile phone, a credit card or a club membership card would act as an entry ticket. People without these new age accessories would have to pay Rs. 60 as entry fee, for a coupon redeemable against purchases made at any time.

Within days, the number of visitors to the mall fell by more than 70%. Many of the visitors felt it very insulting to prove that they possessed a credit card or a mobile phone.

Traffic continued to fall even after the ban was lifted two months later. It hovered around 6000-8000 a day, as against the initial walk-ins of 30,000-40,000 on weekdays and up to a lakh on weekends. Disappointed with the low traffic, Fountainhead, a bookstore, opted out of Crossroads.

Shyam Ahuja, famous for his carpets and dhurries, vacated two-thirds of the space. Other unhappy tenants too, started renegotiating rentals.

The 'Shoppertainment'

Crossroads, situated near Haji Ali in South Mumbai, and spread across 1,50,000 sq.ft., was launched by Piramal Enterprises¹ in September 1999. The chairman of the group, Ajay Piramal aimed at introducing the concept of 'shoppertainment' to the Indian consumer through Crossroads, complete with food courts, recreation facilities, and a large car parking space. The mall was created on four levels, offering jewelry and children's goods; gifts and women's wear; houseware; and men's wear.

Prior to the establishment of Crossroads, Piramal Enterprises had set up a Roche factory² at that location. To utilize the real estate in a better way, the group considered many options with the help of consultants McKinsey and KSA Technopak. The surveys by these agencies revealed that the urban population always sought a shopping environment that let a family spend time together. Keeping this in mind, the group developed the Crossroads model. Crossroads was Ajay Piramal's answer to the malls like London's Harrods or New York's Macy's. (Refer box).

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1] Piramal Enterprises was a Rs 20 billion group with interests in pharmaceuticals, textiles, healthcare, glass containers, auto components, cutting tools, ferrite etc. Some of the leading companies in the group included Nicholas Piramal India Limited (NPIL), The Morarjee Goculdas Spinning & Weaving Co. Ltd., and Gujarat Glass Limited.
2] A Swiss pharmaceutical company, which Nicholas Piramal India Ltd. (NPIL) acquired in 1993. NPIL was formed after Piramal Enterprises acquired Nicholas Laboratories in 1988, to enter the healthcare business.