Sales expected to be better than last year
This is festive time and every swanky mall and shopping complex in Mumbai is craving for more footfalls and in turn sales. Retailers along with the consumer durable firms are offering a plethora of attractive incentives like discounts, free gifts and interest free finance options to rev up sales and perk up consumer confidence. Mayura Shanbaug does a reality check and brings across some surprising facts…
According to recent survey by industry body, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), retailers are expecting an increase of 115% to 120% in the visitor footfall this season.
“Malls in Mumbai are likely to spend over Rs 100 crore on decoration including contemporary lighting and promotional campaigns during the festive season that started in the last week of September and will continue till early November,” says D.S. Rawat, Secretary General of ASSOCHAM. But the million dollar question is: Will the Footfalls Convert to Sales?
“Yes,” says Rawat. “Retailers and consumer durable goods’ makers are expecting an increase of about 45 to 60% in the sales during this period.”
This despite the fact that, with the skyrocketing inflation and ever-rising fuel prices, interest rates and inflation, buyers’ confidence was shaken and registered a dip in the footfall by about 20% during the first two quarters of FY 2011-12. Business again picked up during the third quarter thus resulting in retailers increasing their overall marketing budget by about 35% for this period alone.
According to Anil Lakhani Executive Director, Gini & Jony, who agreed to the fact that there hasn’t been significant increase in footfalls due to various reasons so far, hopes that with Diwali round the corner sales will now pick up. “We do expect an increase in the footfalls of 20 to 25% from last year and at our stores the conversion ratio of footfalls to sales would be not less than 55% to 60%,” he said. “We are targeting an increase of 30% sales (y-o-y) as compared to last year in terms of value,” he added.
However, everybody is not so gung-ho about the season, Thomas Johan, Sr. General Manager, Retail Operations & Institutional Sales, @home, a home furnishing retailer feels that there would not be a significant increase in the footfall percentage this season.
“We are expecting a 20% increase in footfall but increase in footfall percentage will remain the same be it now or for the season,” he said.
“Normally, 40% to 50% of footfall is expected to translate into an actual sale at the malls. We are expecting the same this time around,” he added.
What do the consumers prefer?
Videocon Industries, which has seen a 30% growth in sales as compared to last year and has recorded growth in both Consumer Electronics and Home Appliances sectors in most of their product categories like refrigerator, LCD/LED, washing machines and split air conditioners, have chalked out a winning strategy.
“The consumer never buys the product in the first visit and compares 3-4 options then he makes up his mind,” says Anirudh Dhoot, Director,Videocon Industries.
“We have done good business in the month of September. During the festive season footfall increases gradually, especially in consumer durables, so we think this exercise has already been started and it will definitely increase further in the next few days. The same is happening with secondary sales too. So this season would be definitely better than the last season,” he added.
A bigger slice of the Pie…
Since its Diwali, retailers are competing with each other by offering a plethora of attractive incentives and offers, which are sure to increase the footfalls. Most have outlined marketing strategies and innovative promotional activities and are offering value-added services to draw crowds and spur sales conversions during the festive season.
“But the market is becoming saturated and there is an increase in competition,” says Kishore Bhatija, CEO, Inorbit Mall. “Many retailers are rolling out new strategies and though consumers are reacting positively to these, the situation is getting fiercer,” he says. “So there might just be a 5 to 8% traditional increase in the trading density with 15 to 20% increase in the footfalls this season,” he added.
How are they promoting?
According to the survey, promotional activities by malls will include product launches by celebrities, food festivals, ‘mehndi’ and tattoo workshops by professional artists, cooking competition for women shoppers, exhibitions, gaming contests, tasks for kids, youngsters among other fun activities and sponsoring gift vouchers, gift items like apparels, artificial jewellery, accessories and cosmetics for those who win contests.
What’s On Offer…
Gini & Jony has a promotional scheme for the customers in select exclusive outlets. On shopping of Rs. 5000 the customer gets a Rs. 600 gift voucher and on shopping of Rs. 3000 the customer gets a gift voucher of Rs. 300.
Videocon has come up with various gifts & offers for the customers. With every purchase of Videocon LCD & LED, the company is offering a free set top box worth Rs. 2690. With premium products, the customers will get gifts like sunglasses, imported crockeries, rice cookers etc.
@home is cajoling customers to buy more through discount vouchers.
Inorbit Malls is conducting a 15 days experiential event across all malls this year as we have tied up with Sony Motion Pictures for the blockbuster release ‘Tintin’ which is the central theme of the event.
So, with all this and more, the Indian consumer is bound to get tempted to go out there and buy.
Retailers and consumer durable goods’ makers are expecting an increase of about 45 to 60% in sales.
D.S. Rawat, Secretary General, ASSOCHAM
We are targeting an increase of 30% sales (y-o-y) as compared to last year in terms of value.
Executive Director, Gini & Jony
Normally, 40% to 50% of footfall is expected to translate into an actual sale at the malls.
Thomas Johan, Sr. GM, Retail Operations, @home
This season would be definitely better than the last season.
Anirudh Dhoot, Director,Videocon Ind.
Many retailers are rolling out new strategies and though consumers are reacting positively to these, but the competition is getting fiercer.
Kishore Bhatija, CEO, Inorbit Mall