Shoppers Stop To Enter Quick Commerce Space, Aims Delivery In Three Hours

Shoppers Stop Ltd. is planning to enter the quick commerce sector, aiming to deliver a host of items such as clothing, jewellery, bags, shoes cosmetics and home decor from its stores within three hours. This move comes as the department store chain looks to expand its market size, as quick commerce continues to gain popularity outpacing the growth of e-commerce and modern retail formats.

"I think quick commerce really, really expands the market size...it's a great phenomenon and a good space to be in," Chief Executive Officer and Managing Director, Kavindra Mishra, told analysts in a post-earnings conference call. "We are looking at how we can offer within three hours, or how we can offer within the same day. And there, our departmental stores will become the center of service. So that's something which we are testing out."

Shoppers Stop is also piloting an updated version of its app, which will support quick delivery service. "By the end of this month, we should be able to roll it for the entire 100% of our consumer base. We're now in the last stage of rolling out the app after ensuring that errors or fixes are taken care of," he said.

Non-grocery modern retail formats, including Pantaloons, Lifestyle, Max Fashion and Reliance Trends have largely resisted the trend of hyperlocal fast delivery, often citing concerns over unit economics. However, the quick commerce giants are now aggressively pivoting into non-grocery segments, compelling traditional modern retailers like Shoppers Stop to reassess their strategies and adapt to changing consumer demands. The e-commerce ventures have also had to reduce delivery times in response to the growing 'need-it-now' mentality prevalent among urban consumers.

Peer Reliance Retail is also planning to extend its quick delivery offerings to value fashion and small electronics, such as smartphones, laptops, according to industry executives. This will be fulfilled through Reliance's existing network of stores, including Reliance Digital and Trends outlets.

Others, including Aditya Birla Fashion and Retail-owned Pantaloons, Tata Group firm Trent Ltd., which runs Westside, as well as Lifestyle, owned by Dubai-based Landmark Group, have not entered the quick commerce rat race yet. Trent CEO P Venkatesalu had in the past said that it has no intention of entering into quick commerce as it feels that the format is not viable from the standpoint of unit economics.

The Tata Group, meanwhile, is in the process of rolling out Neu Flash, an offshoot of its ecommerce venture Tata Neu, allowing consumers to shop across categories such as grocery, electronics, and fashion. While Croma will handle electronics sale, Tata Cliq will offer certain stock keeping units in the fashion and lifestyle space, said people aware of the development.

Within fashion, there has been demand for quick delivery of essential items such as innerwear, kurtas, t-shirts and trousers this festive season, according to another senior quick commerce executive. Notably, Blinkit and Zepto have already enabled returns for clothing, footwear and a few other lifestyle items such as handbags—a key feature for this category.

Shoppers Stop's Mishra concurs. "What we're seeing is, right now, when brands are engaging with quick commerce sites, they are primarily engaging on certain product categories, like innerwear or solids."

Unlike non-grocery players, modern retail chains selling vegetables and packaged food ventured into quick commerce much earlier. Yet they are struggling to keep pace with the growth trajectory of quick commerce competitors. Take the case of Avenue Supermarts Ltd., the operator of the DMart chain of supermarkets and hypermarkets.

Following disappointing earnings for the September quarter, CEO and Managing Director Neville Noronha admitted that sales—particularly in metro locations, which typically generate a high turnover per square foot due to their loyal customer base—were affected by the rise of fast delivery platforms. While Avenue Supermarts has an online offering called DMart Ready, its longer delivery times make it susceptible to quick commerce competitors, who guarantee delivery within just 10 minutes.

Morgan Stanley, which has downgraded Avenue Supermarts to ‘underweight', noted that the DMart management didn't view the rise of quick commerce as much of an issue a couple of months ago.