With most negative factors like the recession and the financial meltdown left behind, retail players in the city are expecting to rake in the ‘mullah’ this festive season as consumers have gone on a unstoppable buying spree…And the fun just seems to have begun…
Growth in sales has already been as high as 25 to 30 %. And the last minute buying rush before Diwali is expected to add another 15 to 20% to that number. So what’s pushing sales? Marketing experts are attributing this to the cleverly packed offers with a jamboree of discounts and freebies and this mixed with the increasing consumer spending power has led to a surge in sales….A heady cocktail. But will the party last?
Yes say most marketing experts and retail bosses. However, the rules of the game are changing and to sustain growth innovative marketing concepts backed or rather driven by competitive price discounts will be the order of the day. Simply put “aggressive discounts are here to stay “, says Virendra Ghole, Marketing Head, Monginis Food Pvt. Ltd, India’s leading pastry, cake and general bakery chain. According to him “the recession of last year was felt even during the festive season”. Now with that changing, ambitious growth targets are being set and gaining more market share is uppermost in the minds of the marketers rather than gauging demand and setting targets”. So it’s all about capturing market share. He anticipates an overall “increase in demand to the tune of 20 to 25% on a year-on-year basis”.
As regards whether the growth is across all segments and will it continue, marketing ‘wizkid’, well not exactly ‘kid’, ‘Big Bazaars’, Kishore Biyani, who now qualifies to be a retail marketing guru, is equally optimistic as buying is spread across all consumables. According to the Future Groups, ‘head honcho’ ” business would be good in the furniture and electronics segments with an anticipated 35 to 40 % growth, while in fashion, the growth would be anywhere between 25 to 30 % as compared to last year”.
Saurabh Ray, Marketing Manager, ‘@home’, a home furnishing store agrees with that view and says that “in comparison to last year the %age increase in demand would be 40 %….the reason being that the market scenario has improved from the previous times.” As regards price cuts he said “There are enough discounts going on. There's no such increase or decrease in our discounts this year. We've being doing well, there has been a 40 % jump in sales,” he concluded .
Home Accessories exclusive store Bianca’s, Director, Neeta Dalal, is equally optimistic as her store has seen an increase in of around 70 % this year. She’s attributing this success to their “new innovative products and designs keeping latest trends in mind and our presence in Pan India.” Surprisingly, that number has come in although her store offers no discounts. According to her “Because the demand is more than the supply we don't offer discounts. Business for us is very good,” she revealed.
But her case may be an ‘exception to the rule. Elsewhere the name of the game is aggression, clearly reflected by leading Home appliances maker -LG Electronics India strategy. This giant would be spending around Rs140 crore on promotions alone this festive season, slightly higher than that last year. But as compared to last year’s revenue of Rs13, 089 crore, the company is aiming at sales of Rs17,000 crore for 2010. The strategy they are adopting is of visibility. The high spend on promotions is intended to maintain brand presence.
Others like Marks & Spencer Reliance India are also hoping to cash in on the festive mood. The company would be showcasing home furnishings and décor and dishing out a special ‘3 for 2’ offer on select items of its Home Collection.
On the fashion and personal accessories front too, a similar story is being played out. The going is good here also. Says Anil Lakhani, executive director, Gini & Jony, a dominant player in the Indian kids wear industry “This year the market has picked up fairly and people are in full swing to invite this festival with a boom. We are offering almost the same kind of discount as in the last festive season. We see this season far much better in terms of units sold and our average billings as compared to the last season,” he said. His company has witnessed a 20-25 % increase in demand for their products.
But discounts continue to be the mantra. To attract more customers, Retail player, Shoppers Stop is offering a discount of 10 to 20 % on branded jewellery names like Cygnus, Asmi and more. A discount of 10 % is also being offered on online shopping on all orders above Rs 1000.
But the cake is large .Jay Gupta, CEO of the multi brand retail chain-The LOOT says that they anticipate their business to grow at least by 20 to 25 % this festive season. “In India during the festive season we see a huge jump in demand like during id, we saw the sales jump to four times the normal sales. We expect this Diwali to be extremely good,” he said. But in spite of the high demand, they are offering 60 % plus discounts and other attractive offers to cash in on festive demand that lasts for very short spans.
Then there is Kanwal Kumar Bhatia, Marketing Head, Mumbai of Sportking the leader in sports wear garments, who knows the in-and-outs of street marketing and wonderfully gauges consumer preferences. According to him the categories which are booming today are the electronics, apparel, food, FMCG and durables. But to ‘sell well’ the format will have to be reworked. “Supermarkets, hyper and convenience stores are today’s primary outlets and will become the perfect avenue to catch eye balls and entice the "end” consumer. According to him ‘major sales contributions in the future will come in through multi-brand stores rather than large format stores.
So, overall the going is good and can be best be described in the words of Kumar Rajgopalan, CEO of Retailers Association of India. According to him “though demand is good this festive season, most of the retail players are still offering good discounts to attract more clientele. “Retailers have learned their lessons from the recession and would leave no stone unturned to do things better this time round. It is good for the consumers as they would be ones to benefit,” he said.
Simply put it means “Consumer Is King” once again.
Kishore Biyani. Future Group
Business is good in the furniture and electronics segments with an anticipated 35 to 40 % growth,
while in fashion, the growth would be anywhere between 25 to 30 % as compared to last year
Virendra Ghole, Monginis
Gaining more market share is uppermost in the minds of the all marketers and
aggressive discounts are here to stay;
Saurabh Ray, @home.
In comparison to last year the percentage increase in demand
is to 40%. We are in good times.
Neeta Dalal, Bianca
Success comes through new innovative products and designs keeping latest trends in mind. We have achieved that..
Mr.Anil Lakhani, Gini & Jony.
Last year was the phase when we were coming out of recession. Now we are out of it
Mr. Jay Gupta , ‘The LOOT’
We expect this Diwali to be extremely good .In spite of the high demand; we continue to offer discounts since this demand lasts for a very short span.
Kanwal Kumar Bhatia, Sportking
Supermarkets, hyper and convenience stores are today’s primary outlets and will become the perfect avenue to catch eye balls and entice the "end” consumer