 Ladies and gentlemen, it's time to move forward to our last session of the day before we actually move into the CMO Felicitation ceremony This is a special address for the evening which talks about how to build a cult following for your brand Our speaker is the chairperson of Nully Group a 650 crore national retail chain specializing in textiles and women's ethnic wear the economic times named her as a monk Corporate India's fastest rising women leaders She's also been named by Forbes as Asia's women to watch in 2016 She is a frequent speaker at industry events and an Ambassador for government of India's innovation efforts and champions of change program Ladies and gentlemen put your hands together for miss Lavanya Nully vice-chair person Nully group of companies Can everybody hear me? I it's not an enviable position to be in I think the last Session of the day, but hopefully I can do justice to that Today I actually wanted to tell you three stories I know the topic is about how to build a cult following for your brand But I think what I would love to do is to share with you I think what I would love to do is share with you three personal stories Stories that are close to my heart about the family business about our brand and Hopefully there are some lessons in there which will resonate with you The first one actually started. This is set in 1950s Now I was reading there's a Tamil magazine called kumudam and in that there's this writer Ashok Mitrin And he had written this beautiful story in it and I'd read the whole of it And when I came to the end, I realized that he was actually talking about my great-grandfather And that's a story that stuck with me and and the story is basically about how he came to Madras Back in the 50s with his sister and his parents for the For the marriage of his for the marriage of his elder sister and when he had come down I think they realized the family had realized that the alliance was already forged with another person and so his Father decided to leave the mother and the son and the daughter behind while he went to seek another alliance And the daughter and the mother came to our store and they wanted to buy a wedding sari Now even back in those days, I think it's no different from today if people save up to buy their wedding sari It's one of the main events of a wedding but back then the Woman basically came to my grandfather My great-grandfather and said is it okay if I pay an installment? At which point he replied saying it's very unusual to ask to pay an installment You typically don't be an installment for a wedding sari. What's going on? And she said look we had come here with the intent of kicking off this wedding and we had 6000 rupees And because it's a large sum of money, we've deposited that in the bank And in the 50s there was a withdrawal limit of 500 rupees per month so we can't really pay and I don't know what I'm going to do if the alliance actually gets fixed and if we actually have a wedding on our hands You know soon enough and lo and behold I think that's exactly what happened They found an alliance and there was a you know There was an impending wedding and they didn't really have the money that they had the money, but they didn't have access to it So my great-grandfather at that point in time and he did not know this family They had come in from Hyderabad. They were not from Chennai. We had no common friends But he said I will give you the 6000 which back in the day was a huge sum of money. Whatever happened The wedding must not be stalled for reasons like this. So I will give you that money so you can So you can celebrate the wedding of your daughter Even though the wedding was going to happen in Tirupati Now of course they didn't default they came back and you know paid off and all of that But it's a story that's stuck, right? It's a story that's stuck with a Shokh Mitran as a young boy how he witnessed it. He went on to become a writer. He spoke about it And there are many stories like this that exist with Nalli and the reason why I picked this out is to say Customer is the center of our world Now a lot of us say it and we say you know we're a customer-centric brand But if there's something that I take away from this story Number one people don't want you to give them things. They don't want to buy it from you I think what they want is someone who's going to help you solve their problems whatever that is So when we say we're a customer-centric brand you really need to do everything for that customer The second thing is your customers define your brand So what we it's one thing to say, you know, we're a consumer-centric company We're all about the customer. We put the customer first But does your customer say that is that what people talk about when you have a chat with them and then and you Ask someone what's the first three things that come to your mind when you think about us as a brand? Do they actually say look, it's you know, I feel I feel celebrated each time I come in that I have you know, I have a delightful experience I really enjoy associating with your brand if that's what they're saying about you then clearly you've done something right everything else Really is just I think a little bit of sometimes we believe in our own height and the last thing that I take away from this is a Customer who is a fan a customer who becomes your brand advocate who has such an experience and he talks He or she talks about it and today in this day and age, you know, they're gonna talk the Voice of the customer really is heard. They're gonna be a far better brand advocate than anything that your marketing efforts can do The second story that I have is also from a similar time period So some of you might recognize her from this picture But there was a very elegant lady who walked into our store with a single strand of blue thread And she walked up to the salesperson and said look I have this this strand of blue thread Do you think you could make a sari for me in this exact color and That was the color that was not really very common nor was it available at that time And so the salesperson thought about it and said all right Let me see what I could do and then passed it on to My grandfather at the time and he thought about it and he said look There's there's only one beaver that I know in Kanjiburam who can do it Mr. Let's take it to him and this gentleman was well known for his innovation in in Dyes and you know coming up with colors and and innovative designs and evening techniques And so we took it to him and after some trial and error They actually got a sari made in that exact shade of blue and this lady Came to the store picked it up wore it for a karnatic music festival and that shade became known as MS Blue after MS Subalakshmi because she voted and it was so popular that everybody who basically went and saw her at that concert Started coming to our store to say okay. Where do I get that? I haven't seen that shade before and I want to get the exact same thing that she's wearing and it became almost an industry an industry term where now people just call it MS blue and the more I wanted to What I wanted y'all to take away from this story is I think as a brand know what you stand for know what your strengths are Our core strengths were product innovation value for money We're not we focus on few things and we focus on them and we do them well What you don't do is also a very clear strategy. We do not have a loyalty program We do not have loyalty points. We do not do a coalition. We've had no discount since 1928 and that's a that's a strategy that works for a lot of people to have a high-low strategy where you know, you've got a You've got a certain margin and then you have an effective margin because each time you want to drive traffic into your stores You kind of play around with the pricing a bit and there's nothing wrong with dynamic pricing But for every brand you've got to be very clear in terms of this is what we stand for what we focus on and For us it is product. It is value for money keeping your margins as lean as possible and Then nothing else that's going to add to those overheads You're not going to have any bloated costs. You're not going to have like, you know, you're not going to invest too much money in any of these other Benefits because you'd hope that focusing on the product focusing on the ops Focusing on those values is really going to bring those customers in the door And that's the last point which is about being internally consistent Whatever it is that you picked you'd want to want to ensure that these things reinforce each other See a lot of companies today. Sometimes they want to pick the best of it and say, let's look at best in class But sometimes you've got to think okay, but for your brand does that resonate with your core values that resonate With your DNA. Are you very clear and focused in terms of what you stand for or are you just looking at let's you know Look at the best across every function and try to sort of inculcate that sometimes that latter strategy doesn't exactly work The last and the final story that I wanted to say And this is a personal story. So this was back in the 80s when I was a child and I Lived in the ancestral home, which was on top of the of the Mali flagship store. Now if you've seen the flagship store In Chennai, it's it's one of those strange buildings that that looks very small But then you go into it and it sort of just opens out into this cave of wonder But we had our ancestral home which was built in the 1920s and my grandmother and my grandfather still live there now And I grew up there as a child and we spent my first five years there and in the 80s I remember you'd always find a line of people standing outside Just outside our store and I used to think wow This is you know, this is so exciting that there's so many people who want to come and shop at our store But they were always men and so once I asked my grandfather, you know, why What all these people and they you know, they all come here and they stand in this line and he said they're all looking for jobs And I thought wow, so India has so many salesmen and he said no We are lawyers and doctors and engineers and they're looking for jobs because we don't have any jobs in this country that made an impression on me and that's something that stuck with me because After that, I think I started to see how my grandfather and after that my father and how we even till today How we run the family business for us The employees are an extension of your family So you would we would take care of our employees because once you're part of our fault, you know, we You're part of it And back in the 80s. I think when times were tough We had the you know, the family business of business families typically became more than just Business entities. So if you had an employee who's done good work has been with you has been loyal is going through is You know, it's time for him to get married He needs a loan. You almost became a bank If you had someone who is going through some kind of a medical emergency as an employer You would be the first person that they would turn to and so these were the Formative sort of experiences that I grew up seeing and the result of that the impact of that if you look at us as a business most Companies in the retail sector with salespeople especially if you see the attrition and the average tenure the average tenure tends to be The matter of months quite look quite low Salespeople generally tend to have a lot of turnover if you go to our flagship store the average tenure is eight years That's that's average which means half of them are actually have lasted with us much longer than that And I think that's the kind of loyalty that you can't buy that policy can't sort of you know incentivize it's something that You've got to live your values and you've got to have that sort of purpose the same and the same Philosophy that we have towards our employees extends to our viewers and extends to the larger community that we work with And a lot of the initiatives that we've done to sort of work alongside them over the years And that's why we till today have a lot of weverse who worked with us for multiple generations and who worked with us almost exclusively and Even though that you know that they're not obligated to but we buy up their entire production capacity We work with them almost like they're a captive unit. So the final Take away from that is Is to as a van be authentic have purpose I think what you find is when you're driven by that kind of a powerful ethos People are attracted to it and by people. I don't mean just customers But I mean people humans all of us right we all we want is to belong all we want is to find meaning Whether you're an employee whether you're a customer and if you have If you've built a brand that lives its values That will come across and I think that will come across to customers It'll come across to employees and you're going to have a very engaged and a very sort of appealing experience and The way to do that is not really through tactics or through policies or through, you know These sort of incremental shifts, but I think go deeper and really think about what are what is my brand DNA? What are my brand co-values and it shouldn't be something that you put up on the wall It should be something that you live and emulate every day and it starts from the top It starts from the senior team all the way down to the front line person who's empowered to actually to actually To actually act on what it is that you put up as your co-values So the final thing so I've given you the three stories and my sort of what I've Taken away from that right and and I believe that these as simplistic as they sound these are What I genuinely believe has gone into making our brand have that kind of iconic status and have that kind of cult following We've always been about go Beyond the call of business when it comes to your customers go beyond the call of beauty when it comes to your employees Be completely focused know what you stand for and be absolutely number one on that Do not compromise on what your strengths are and forget about what everybody else is doing and I think Having that kind of focus has really helped us quite a bit And if you asked what the impact is I'd say if you look at the Saudi industry It's a 70 depending on the reports that you look at 70 70,000 to 85,000 crore industry highly fragmented There's not even one Saudi player that has cracked even 1% of market share Highly regional tastes so it's very difficult when you have Such a large industry and then the the products are going to be so localized and you need to customize it to every region The average price this is for a for a silk sari, but the average price is around 6,000 to 8,000 So that's not a very that's not an insignificant amount of money And some brands spend hundreds of crores in marketing I Won't get into which ones, but I think There are different ways of sort of you know trying to Reach out and get that awareness and one of it is really to spend a lot on marketing But we've stayed true to our values these three to what we've done right to our way of doing business and what you can See in terms of the results is today. We are a 700 crore business They're the only national player in the In the sari industry But a category killer and saris which means that if you a lot of people think that okay, then There are silk brand or there are wedding silk brand But if you look at our collections in Mumbai or you look at the collections in Calcutta You look at the ones in Delhi you see that it's very customized To the local tastes which means that we have not only the access to that kind of an inventory But we also really bring that out to the four to the photo with our stores Despite having such a high average price you see a high repeat purchase and we spend barely anything on marketing We haven't done the TVC in years most of this is really Communicated and and it continues to thrive through a word of mouth so the last sort of I Guess the last my parting thought or things that I would like to leave people behind with is There's a lot of information out there about how do you build a cult brand and there's many different ways to skin a cat You'll ultimately find something that resonates with your brand with your values and and there's no real right or wrong way But I can share with you a little bit of what worked for us What worked for us to get to this stage as an organization is just focusing on our product our operations Right so we focus on having an unparalleled range. We want to get the the largest variety the the biggest sort of Products out there the best sort of designs and and at an unbeatable price and to do that We've got to focus on our operations to say okay keep costs as low as possible If you want to give them if you want to give your product if you want to give your customers That kind of a range at that lower cost you can't have so much overheads Which is either gonna come through marketing or through you know any number of sort of business decisions that you take We look at it ruthlessly to say what can we prune away and let's stay true to what our core is and what we are known for We also focus on just in time inventory, which is very very difficult to pull off in the apparel industry But every single day we do merchandising every single day We get new stock in right and the reason is customers especially women They always want to see something new and that's a very That's an insight that I don't think anybody here is going to debate So women always want to see something you and the other thing is they always want to see something different So you want to make sure that you've got new but not only new and unique designs But distinct designs because if she sees that you've got two saris of that same type She's not gonna pick it up because she doesn't want to buy a sari that somebody else might be wearing You know at some other point in time And the and the final thing is I think underpinning all of this is Our strategy or sort of our business decisions the way we've made it work is by having a lot of autonomy for all of our store for providing a lot of autonomy to our Store managers and our regional heads so we've got some Business decisions that we've taken like we don't provide we don't give any discounts. We haven't given discount since since you know 1928 But if you tell someone as a store manager, you do not have the lever of Manipulating price you cannot provide a discount in order for you to offload inventory Then how do you expect him to actually you know perform? So then what we do is we say all right We're gonna give you complete autonomy when it comes to your product Don't focus on don't think of discounting and don't think of manipulating your price as A way for getting customers in or as a way for you to offload stop focus on getting the best product possible And we give you complete autonomy and we're not going to sit here centrally doing the merchandising for you But you but you decide all we look at is your you know your top line and your bottom line So they are extremely Empowered and the same holds true for our frontline salespeople. They're part of our merchandising decisions every day Where they actually come in to the merchandising room and they look at it and they say look this these products are going a little slow I would say pare down on that, you know Let's not get so much of this particular type of motive because I don't think it's really doing too well And so those I think having that kind of an engaged and empowered Workforce is really critical for you to be able to do these two other things But the thing that really takes it to another level I think is how you work with everybody else along The chain because your business is not just everyone that's internal everyone that's on your payroll But your customers also define your brand what they feel about it how how they walk away Feeling about it what they associate with the brand The folks who sort of help you on the journey the weavers Whoever it is your suppliers, right and finally of course your employees because they're the first person that your Customers are going to see and the last person that they agreed before they get into their car. And so that's one thing that I could Sort of leave behind I'd probably say Focus on I guess what your brand's DNA is what your core values is and a lot of us here are in positions of influence and power And I'd say at every level there are ways where we could emulate these values And I think ultimately that's what makes the difference between are you going to be a good brand or really are you going to be something That's that's an iconic brand. That's that's going to endure. Okay. I think we're right up on time if we have any So that's it from me for the presentation If we have any questions I can perhaps do do a couple we can probably take one quick question if We have Okay What I understand is you basically like operate through your retail shops your Company owned shops. You don't have a franchisee system or you don't have a digital reach to the customers So how do you you know plan yourself in the next five years? So no, we do not have a franchisee model, but we do have an alley.com So it is available and we ship worldwide So that's one way in which we are able to tap into Segments that into areas where we don't have a physical presence And that's today We don't retail on any other platform and that's a very conscious strategic choice because I think it's still nascent I think e-commerce especially for a high-value segment like this is still very very nascent our Brand and our brand ethos and our customers. I think are such that they would Prefer to probably buy direct from us as and I think we're really at odds with Listing on any of the platforms, but I do want to make it clear that we do exist For anyone who doesn't have a physical store nearby apart from that. I think look the the way to expand and grow as an organization is really as Long as there is demand you've got to capitalize on it. There is a lot of demand We haven't even scratched the surface of it We've got 34 stores, but there is no way that I can say like I said you've seen the numbers It's 700 crores out of water 70,000 85,000 crore industry We've nowhere scratched the surface of what is possible and that's going to happen through any number of ways of course there will be opportunities for offline store expansion but Today's customer and someone Said this quite quite nicely to me and they said in India every five years is a generational change And I think I sort of agree with that and and luckily my entire team who works with me are all born in the 90s So I don't feel that you know, I don't feel that I'm left behind. Thanks to them But today's customer is much more tech savvy is much more vocal is you know is knows their mind much more clearly right and They engage with technology is just a medium and they engage with that medium in whatever way Right to sort of communicate with the brands and to sort of express themselves and so on I don't think e-commerce Today as it exists is really the most evolved state I don't think it is the steady state or the end state I think it is still something in progress But I certainly think going forward that growth and that expansion is going to come through a combination of offline stores with Certainly some level of omnichannel integration Maybe there's one more question would you like to show you mentioned you empower your entire team And you give them a lot of autonomy particularly your store staff. So can you Tell me what kind of autonomy would you empower them with? So stores like I said at the if you start from the head right from the people who make Merchandising decisions now typically if you look at any kind of an apparel Brand you'll have a merchandising function. Then you'll have a sales function Then you'll have a marketing function. You'll have like multiple sort of functions You may have a project team and so on and so forth Typically what happens is the sales even at a store head level He inherits the merchandise and then he's given a few Leavers that he can employ in order to achieve this target even the targets and all of that most of the time he inherits Now in our case, we don't give them and this may sound strange to you, but we don't give our Store heads any target? We basically tell them look it's yours. It's it's your store our regional heads the way that they work They understand and we've So let me back up a little bit as an organization We are a completely hundred percent privately held privately owned organization and we're fairly conservative on debt So what that means is all of the expansion that we have done how we have achieved 700 crores has been completely through the internal Generation of funds. No VC money. No P money. No external capital Because of that what it does is it puts a strong pressure on people to be very very operationally efficient So most of our stores they break even within the first year and then they start generating funds towards the corpus for expression within your tool and so a regional head really And most regional at most P and L people are that way, right? He's really looking at it in terms of okay, how much demand is there in my region? Let me put up the store and now it's now that I put up this one store I'm getting the returns from it. So with this let me go to the head office and say look I'm adding to your corpus and I see that there's demand for another store in this area So why don't you all back me up, right? And we say great you you've done the work and you've come to me with the business plan All you need is the capital and we're going to be like behind you 100 percent There's no central team that does that and pushes it down Right. All of this is really coming From the people on the ground from someone who is there saying I get customers walking into my store every day saying Why don't you have a store in this location? I have to travel all the way here from there to the folks who actually look at Who look at the sales of that store? Which is that particular store head? So we tell them look you have complete control over merchandise. It's very very difficult It sounds easy, but if you actually think about it most people if you tell them in your business Can you give the store head complete control over merchandise? They say no no no he's gonna make a mistake, you know I would rather put some guardrails and tell him no you need to have certain you know things in place We don't actually do that so we tell him it's completely up to you The only thing is I want you to protect the brand protect the reputation of the brand We stand for certain things and I want you to uphold that and ensure that we are competitive, right top line bottom line All of that is your targets you I mean all of that is your responsibility So you do what you need to do because you we know that we don't give you any we don't give you any marketing and we don't give you any You know provision for discount, so you've got to give them some way of You know some way of solving that so that's how it kind of gets empowered at every level where we look at it And we say okay What can we do to ensure that your? Employees are actually running this business for you right and if you do that I think the strong employees will actually bubble up to the surface and in the end they will be the ones that really run your brand Thank you very much miss Nali. Well, that's all the time we have ladies and gentlemen can we have a huge honor plus I Like to request mr. Ajit Nair national head advertising sales look mud group to kindly Join me on stage to present a token of our gratitude I'm a question