There is a strong need to change the legacy mindset in the retail industry: Nitin Chhabra

In this interview with Adgully, Nitin Chhabra, CEO, Ace Turtle, reveals how the integration of technology and a forward-looking approach has propelled Ace Turtle to new heights, showcasing its impact on Lee and Wrangler brands and shedding light on the future of retail in a tech-infused landscape. Excerpts:

Congratulations on the remarkable growth and success of Ace Turtle and its impact on Lee and Wrangler brands in India. Could you tell us about the pivotal role that technology played in the turnaround of business for Lee and Wrangler?

Thank you. At Ace Turtle, our goal is to spearhead the retail industry’s next phase of evolution with technology and a vertically integrated business model. We are focused on scaling iconic global brands Lee, Wrangler, Toys“R”Us, Babies“R”Us and Dockers via omnichannel commerce across India.

Technology played a pivotal role in transforming the business for Lee and Wrangler. Embracing a vertical commerce model granted us control over the entire supply chain, enabling data-driven decisions. Our proprietary technology platform, Rubicon, ensured a unified view of the catalogue, inventory, and pricing across sales channels, providing customers with a seamless shopping experience. In-store innovations like Electronic Shelf Labels and Smart Mirrors elevated customer interactions. An extensive online presence met the growing demand for online shopping. Through technology’s transformative impact, we achieved remarkable growth and success, both online and offline and continue to evolve, fostering a thriving retail ecosystem for our iconic denim brands. Through Rubicon, we witnessed a remarkable business turnaround for Lee and Wrangler, achieving 100% order fulfilment and servicing 29,000 pin codes pan India. Overall, the sales of Lee and Wrangler have more than doubled in FY23 over FY22.

The growth of Lee and Wrangler brands in Tier 2+ regions surpassing Metro and Tier-1 regions is impressive. How did technology interventions through the Connect App contribute to this success? Could you elaborate on how it helped digitise retail operations and enhance overall efficiency?

We announced the launch of Connect 2.0 app recently. The Connect App digitises retail operations, revolutionising business operations conducted in retail stores and enhancing overall efficiency. With the Connect app, we streamlined and optimised various aspects of retail operations. To begin with, it provides a centralised platform for monitoring and managing operations across multiple stores, allowing for real-time visibility and control. This enables quick decision-making and agile responses to market demands. The app also facilitates seamless communication between the corporate office teams and the stores, ensuring a smooth flow of information and instructions and reducing the need for larger operational teams at individual stores, saving costs and improving resource allocation.

Through the Connect app, inventory management becomes more efficient. Stock levels, product assortment, and replenishment needs could be monitored and adjusted in real-time, preventing stockouts and overstock situations. This not only enhances customer satisfaction, but also improves the overall supply chain efficiency.

The app also enables better customer engagement through personalised experiences. By leveraging customer data and preferences, the app facilitates targeted promotions and offers, enhancing customer loyalty and driving repeat purchases. Furthermore, the Connect app provides valuable data insights on consumer behaviour and sales performance, allowing for data-driven decision-making. This led to more informed marketing strategies, better product positioning, and optimised pricing, driving sales growth in Tier 2+ regions.

Rubicon seems to be a critical platform for managing commerce operations across channels. Could you explain how Rubicon provided a unified view and optimised management of commerce operations for Lee and Wrangler?

Rubicon enables our brands to have a unified view and easy, seamless, optimised management of their commerce operations across channels. This starts from a single view of catalogue, inventory and price across channels like marketplaces, websites, endless aisles, social commerce, conversational commerce, etc., to customer order management, optimised fulfilment, deliveries, returns and customer support.

The implementation of Rubicon resulted in enhanced operational efficiency, reduced complexities, and improved customer experiences. With real-time access to crucial data, Lee and Wrangler maintained consistent pricing, catalogue information, and inventory levels across various channels, providing customers with a seamless shopping experience. They efficiently managed their commerce operations, expanded their market reach, and streamlined order fulfilment and delivery processes, contributing significantly to their growth and success in the retail space.

The recently launched Lee’s flagship store in Bengaluru with its advanced tech features sounds fascinating. Could you shed some light on how the smart mirrors in fitting rooms, electronic shelf labels, and the Endless Aisle solution have improved the overall shopping experience for customers?

The smart mirrors in the fitting rooms utilise advanced technology to identify the items customers bring in. These mirrors then display additional options in various sizes and colours, enabling shoppers to explore new pieces effortlessly.

Another technological addition is the Electronic Shelf Labels. These labels provide real-time updates on prices and discounts available on our online storefronts, giving customers a unified view of inventory and ensuring price parity. Even during online sales, our offline stores automatically adopt discounted offers, ensuring customers benefit from the same deals across both platforms.

Online sales accounting for 40% of total sales of Lee and Wrangler is a significant achievement. How did Ace Turtle leverage technology to drive this growth in the online sales channel?

The contribution of online channels to the total sales of Lee and Wrangler in India has gone up to 50%! The online sales channels include the brand’s webstores (www.lee.in and www.wrangler.in), along with online marketplaces such as Flipkart, Amazon, Myntra, Ajio and Tata Cliq.

We attribute this growth to our unique and heavily tech-driven operating model. Our proprietary omnichannel technology platform, Rubicon 3.0, powered by machine learning, plays a key role in enabling seamless inventory management and fulfilment across channels. The webstores of Lee and Wrangler have seen sales grow rapidly in the last year. Customers pan India love to shop for the latest merchandise sold on the webstores.

By selling our products (Lee, Wrangler and Toys”R”Us as of now) on major online marketplaces such as Flipkart, Myntra, Amazon, Ajio, Tata Cliq and Nykaa, we have expanded our reach pan India. Our commitment to innovation and customer-centric solutions drives our growth, as we continue to build more robust proprietary technology platforms.

Ace Turtle recently closed a Series B funding round with a substantial investment. How do you plan to utilise this investment to further enhance the role of technology in scaling the business of Lee and Wrangler brands?

We closed our Series B fundraise of $34 million in April this year. We aim to capitalise on the legacy of Lee and Wrangler and sustain rapid growth of over 100% in the current fiscal year as well.

At an organisation level, the funding will be deployed to acquire more brand licenses, revamping the data platform, expand the team and to develop new technology products that will focus on streamlining the supply chain processes and improving brick-and-mortar store operations. This would help us to drive business growth and customer satisfaction. Over the next 3 years, we are looking to build a highly scalable and profitable business with significant penetration across India for our portfolio of brands. We will also be adding more global brands to our portfolio.

As Ace Turtle operates in both India and Singapore, how do you see technology continuing to play a pivotal role in expanding your operations and presence in these regions?

Our headquarters is in Bengaluru, whereas our registered office is in Singapore. We currently serve the Indian market and feel there is tremendous headroom for growth. We will continue to double down in India across our portfolio of global brands – Lee, Wrangler, Toys”R”Us, Babies”R”Us and Dockers.

The positive impact on EBITDA margins for the brands is commendable. How did technology-driven interventions help in achieving this transformation, and what challenges did you face during the implementation process?

The primary objective was to drive technology adoption across our businesses and retain valuable consumer data to facilitate business scaling. Rubicon played a crucial role in enabling our brands to achieve this by offering a unified view and seamless management of their commerce operations across various channels.

Starting from a single view of catalogue, inventory, and pricing across platforms like marketplaces, websites, social commerce, conversational commerce, and more, Rubicon facilitated customer order management, optimised fulfilment, deliveries, returns, and customer support. As a result of these technology interventions and the vertical commerce business model of ace turtle, Lee and Wrangler saw their highest annual sales since entering the Indian market more than 25 years ago.

There were two main challenges when it came to implementation. One was changing the legacy mindset among franchise owners and brands regarding the importance of a technology-driven model. The second was making the entire business data driven.

One of the significant obstacles we encountered while implementing Ace Turtle’s data-driven approach was obtaining customer data. As this data was essential for the success of our business model, we had to take some difficult decisions. One such decision was to discontinue the wholesale business of Lee and Wrangler, which had been a significant source of revenue, when we took over the business from Kontoor Brands in 2021.

Additionally, we had to shut down several offline retail stores of Lee and Wrangler, and our distribution partnerships with department stores came to an end. This was due to their reluctance to share customer data with us. A crucial aspect for us was the willingness to adopt technology. We looked for partners who demonstrated flexibility in trying out new technologies and quickly scaling up upon achieving positive results. Our practice of introducing new initiatives every quarter required store operators to be aligned with our business model.

The retail landscape is ever-evolving. How do you foresee technology continuing to shape the retail industry in India and the broader global market in the coming years?

In this dynamic retail landscape, technology will continue to shape the industry in India and the global market. At Ace Turtle, we believe technology is the core driver of progress, and our goal is to lead the retail industry’s transformation through tech-driven interventions based on our Retail Nxt philosophy. We recognise the potential of AI tools such as ChatGPT in automating various manual tasks for brands and retailers. Currently, we leverage ChatGPT to generate product descriptions for the seasonal offerings of our global brands, Lee and Wrangler. Additionally, customers can engage with AI-powered chatbots to receive personalised product recommendations based on their body type, fit preferences, and shopping occasion. While technology like ChatGPT greatly enhances the retail customer experience, it cannot fully replace human interaction. Hence, we focus on creating a seamless user experience and providing a smooth transition to human agents when required.

Integrating ChatGPT with inventory management systems, like Rubicon, streamlines supply chain operations. It allows for real-time inventory updates, stock replenishment orders, and product availability monitoring, all of which enhance the overall customer experience.

By embracing the power of AI and other emerging technologies, retailers can elevate customer engagement, improve efficiency, and stay ahead in the ever-changing retail landscape.

What advice would you give to other companies looking to leverage technology to drive growth and transform their business operations?

To drive growth and transform business operations through technology, companies should embrace data-driven strategies. There is a strong need to change the legacy mindset, especially in the retail industry. Omnichannel is no longer a buzzword, but a business imperative. Companies need to embrace the omnichannel approach wholeheartedly to create a seamless customer experience across all touchpoints.