After Zara, a well-known Spanish high street fashion retailer, launched its new store in south-central Mumbai’s top-end Palladium mall,it wore an empty with not many buyers around, mostly window-shoppers of them. Just a day later, hordes of eager customers were seen queuing up outside it, to make the most of an attractive discount offers on handbags, T-shirts, shoes, trousers etc. They all were fast grabbed in no time. This sums up the driving power of discounts for you; and also a lesson to be learnt for vendors – in a country that’s also obsessed with ‘mileage’, as a TV ad states.
This is reflective of a peculiar phenomenon associated with consumers in India, begging a question whether only discounts and offers get shoppers out on their toes. Maybe, it’s also that they await lower price-points. So to attract them, retailers have to try every trick in their books especially during the festive season. Probably, those in the industry of gifting might have a thing or two to say about this..
Coming back to the topic, are the concerns over inflation and worries over faltering economy keeping consumers away, especially at mid and lower end of ‘discretionary’ goods? If a recent media report in The DNA publication is to be considered, even though footfalls have gone up, volumes in discount sales are rather suppressed. There has been a steady growth in value in segments like apparel. However, volumes have remained flat so most retailers are witnessing build-up of inventories, prompting them to advance discount ‘sale’ dates. They mostly launch these sales by January-end. This year though, the sales were launched as early as the first week of the new year.
According to market analysts, receding willingness or ability to purchase things causes a decrease in real spends, already down 7-10% from over 10% earlier. They point out the volume growth should be relatively better in the current quarter, albeit not up to expectations. Experts add that impulse shopping has been hit the most, with only end-of-season clearance sales providing some relief to retailers.
When will there be a revival in sentiment? Experts are banking on an improved global situation, having a spillover effect in India for a retail rebound. The key aspect to draw buyers for now is pricing as people indulge in ‘planned shopping’. Of course, establishing a strong brand identity is also very vital from the point of view of shoring up your sales.