Well-known name in the online furniture selling space, Urban Ladder has now decided to embrace franchise model for its business operations. The brand is confident to lead the race and excel with its selected franchise partners. We exclusively spoke to Kaustabh Chakraborty, Sr. VP - Customer Operations & Retail, Urban Ladder on why franchising and also their strategies and challenges ahead. Read on this interesting chat…
Tell us about your Hub and Spoke Business Model that you are about to follow? What made you go ahead with franchise model now?
As a company, our decisions have always been driven by what our customers want and need. We received a lot of feedback and requests from customers from Tier 2 and 3 markets for a store and we are at a point in our journey where we are able to make this happen. This hub & spoke model is going to leverage the already existing supply chain that we have managed to build over the last four years. What we’ve also been able to do is codify and understand the nuances of last mile delivery from the customer standpoint, quitewell. Now, we believe it’s the right time to take that to the market and see if there are franchisees who would be willing to partner with us and hence, we can drive very clear SLAs for our customer experience to be top-notch while at the same time ensuring that we become a lot more accessible to customers around the country as well as bring more partners on board who can be with us in the long term.
Any biggest challenges you face in terms of supply chain, delivery, and others? How do you overcome them?
Furniture as a category is very complicated to manage from a logistical standpoint. As you would know, some of the larger challenges in furniture are for supply chain management. We’ve managed to get that sorted and built a defensible supply chain overall. The key challenges have occurred in last mile delivery services because the customer wants to be home when the delivery is made as opposed to being able to take deliveries in office. So to be able to manage the customer expectation as well as the overall cost of the supply chain is a very fine balance we have to continuously keep driving at. I think we’ve done a reasonable job but there’s a long way to go. Some of the things we keep doing are innovating on technology and engineering to see what we can do to mechanize and automate our processes. For example, we introduced the staircase climber which we used to move sofas up staircases or any other large pieces. Hopefully now with the franchise model, we’ll continue to do better on these.
Enlighten us on your marketing initiatives.
What we’ll start with is to see how online as a channel can drive footfalls and traffic to our offline stores. Once we are able to secure that, we’ll see how we can get more people through our offline marketing strategies and then drive traffic online through that medium. This will have to play out over 2 years to yield any constructive results. The first year, digital channels will drive traffic to our offline stores, supplemented by localized activations around the stores, building enough buzz and awareness of the stores’ presence. We’ll also be doing a lot of community events in the store to keep attracting customers. Once we’re able to do that, then the magic of the online/offline presence will truly start to happen. We’ll start seeing people experiencing the store and then making the purchase online. The other part of our marketing will be to use technology in the store and how that will become a talking point of our offline engagements. Over the next 3-4 months, you’ll see the technology integrations we’ll incorporate for our shoppers and how that will create some very exciting times ahead for the brand.
What kind of stores are you planning to open for Urban Ladder in different cities? Tell us about your expansion and growth plans for this year? Which are your focus markets this year?
This year, we are planning to expand to at least 10 more cities depending on how many franchise partners we get, in which case it could be even more. We are definitely looking at expanding to more cities by March 2018. Focus markets will continue to be in the south of India. In North India, Delhi NCR has always been a strong market for us. We’ll also explore more cities around Chandigarh and Ludhiana we can potentially tap into. Gujarat has always been an exciting market for us. Northeast India is not a market we’ve explored as yet and plan to tap into it this year.
How are you planning to choose your franchise partners? Anything that you will keep in mind while selecting them?
We are looking for partners in the real sense of the word - one who shares our vision for the business and the promise we make to our customers and strives to deliver the same seamless experience through the franchise model. We want our franchise partner to also be similarly growth-oriented and scale up the franchise business through new initiatives, experiments, etc. on a continuing basis. Knowledge of local markets and prior experience in setting up and running a business will be a definite advantage, although not mandatory. We also believe that it takes sincere effort, a healthy risk appetite, and a willingness to experiment to build a business; hence we need partners who are in for the long haul. Finally, a potential franchisee must also have the ability to invest the store and ensure the running costs.
