Mahindra Retail operates 114 Mom'n'Me stores across India specializing in products for expectant mothers, infants, and children up to age 9. While the stores have seen improvements, challenges remain around expanding the customer base, reducing costs, and improving profitability. There is also an opportunity to expand into e-commerce to tap new markets and customers. Mahindra Retail aims to develop a strategy to grow to $1 billion in the next 5 years by focusing on customer acquisition and retention, increasing lifetime customer value, and establishing an online presence.

1. MAHINDRA PARTNERS SECTOR
MOM’N’ME RETAIL BUSINESS CASELET
Mahindra Partners is the internal incubator of new businesses for the Mahindra
Group, supporting a portfolio of existing ventures across Retail, Logistics, Boats,
Energy and Media, while constantly exploring new ventures. This caselet pertains to
Mahindra Retail Business.
BUSINESS BACKGROUND
Mahindra Retail opened its first store in 2009, and in 4 years has expanded to 114
stores with an average area of 3000 sq. feet, across 46 cities and towns of India, with
a mission to dominate the Mother & Child space with quality products.
Mom&Me stores function as a destination outlet for every need of an expectant
mother, infants and kids up to the age of 9. The stores sell products across 11
categories – Maternity Apparel (Western & Ethnic), Non-Maternity Apparel (Ethnic),
Mother Wellness, Baby Wellness, Kids Apparel (0-9 years), Kids Footwear, Kids
Accessories, Nursery, Safety, Toys & Games, and Travel. The stores have a special
layout designed for the comfort of a pregnant woman or a mother with children, with
a feeding room, places to sit and rest, and a child-friendly floor plan. It also focuses
on providing the guidance & support needed to navigate pregnancy, infancy &
childhood confidently.
BUSINESS CHALLENGE: HELP MOM&ME TO INNOVATE AND GROW
The Retail Industry has had challenging times, affected by the severe economic
downturn and turbulence in the marketplace. Mahindra Retail has focused on
ensuring a disciplined operations strategy, focus on store profitability and cautious
expansion to tide over the challenging market conditions. Many Key Performance
Indicators of the business have shown significant improvement in the last quarter,
primarily owing to a strong location strategy. But the key challenges are the need to
expand customer base in existing markets, and realize faster growth in new markets.
The skyrocketing rental costs in good locations has posed a serious challenge to
expansion plans, forcing Mahindra Retail to re-evaluate their store development
strategy. There is possibly a need to reduce the store size, improve merchandise and
store layout, and optimise the product mix further. There is also a need to improve
sales of low penetration products across all categories. Feedback from loyal
customers indicates there is scope to expand the merchandise for kids in the 5 to 9
years age group. It has been observed that the stores become profitable only after
acquisition of about 5000 customers per store - how should Mahindra reach enough
of target group customers who are moving into the pregnancy stage in a store’s
catchment area, so as to acquire 5000 customers in each store? This requires IT
Systems to support Acquisition and Loyalty Programs. There is a need to look at
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Broadvision Perspectives Client Confidential Page 1 of 2

2. developing key affinity builders that can be implemented to excite, satisfy and retain
existing customers, preferably before moving ahead to acquire new customers. Due
to the nature of its business, Mom&Me attracts customers over a short span of time
(-9months to +9 years) with a need to innovate, to increase the Lifetime Value of a
Customer and improve revenues from existing customers.
With the rapid proliferation of Internet, Tablets and Smartphones, there is increased
competition from websites which serve untapped markets. With a good physical
infrastructure already in place, how can Mahindra Retail expand into the e-commerce
business for its product categories to power growth further. This would necessitate
increasing efficiencies in procurement and logistics to stay ahead of the competition,
and build a strong delivery system as a backbone to the e-commerce system.
Considering these pointers, develop a strategy for Mahindra Retail to grow into
a USD 1Billion company in the next 5 years, by solving 4 key challenges:
a. Reach enough of Target Group customers who will be moving in to the pregnancy
life stage in a given catchment area, so as to acquire 5000 customers in each
store.
b. Know and build relevant affinity builders for this segment that excite, satisfy and
retain existing customers, profitably.
c. Increase the Lifetime Value of a Customer, considering that they spend only a
small part of their purchase life currently in Mom&Me?
d. Tap the large e-commerce opportunity, convert routine purchases to the web and
become a multi-channel “click n mortar” model by managing knowledge,
information and relationship online by adopting new technologies.
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Broadvision Perspectives Client Confidential Page 2 of 2