Try walking through T.Nagar’s (Chennai) shopping areas in October or November. If you have not done that before, chances are, you will have the experience of a lifetime. Irrespective of whether India is in the middle of a booming economy or a slump, there are millions of shoppers trying to wade through several options before they make their choice on clothing or electronics. The Indian consumer is choosy. The minutest of aspects is researched carefully. Several different options, across retail stores, are tried and tested before a final decision is made.
From organised players to family run setups, peak season sales also means working while the rest of the world is celebrating. Managing one’s workforce during seasonal sales is challenging. Of course, product mix and promotions is at the heart of influencing the consumer’s buying decision. The question is – what exactly goes on behind the scenes at retailers and retail product companies while they prepare themselves for the festive season?
Luring with deals
Attractive offers have become imperative to stand out amidst this entire dazzle and be the preferred destination for shopping. For instance, in the consumer durables segment, every vendor has a discount scheme going that includes either a direct discount or attractive deals like extended warranties or buy-one-get-one-free offers. “It becomes easy for national brands to plan pan-India offers during a season like Diwali,” explains Nitesh Giria, director, Girias – a consumer durable outlet with showrooms in Bengaluru and Chennai.
But, in addition to discount offers by brands, retail outlets plan their own discount offers. This year, Girias introduced a ‘fortune wheel discount scheme’ where buyers roll a dice and get discounts depending on the number they touch. This is just one instance of how this segment works. Viveks, another leading consumer electronics retailer in South India announced a slogan contest with the best slogan eligible for a house. Overall, they planned to give away 1,008 such gifts reducing in value progressively. From a consumer perspective, identifying the best deal from the clutter is the challenge. Retailers believe it is very difficult to understand buying behaviour; hence, leave no stone unturned.
The right packaging
There is one other aspect that is applicable around the world. While product and price are critical while shopping for your own needs, packaging becomes paramount while gifting. Cadbury India has, over the years, organised special project teams to sell its specially packaged chocolates during festive seasons. It created the ‘Celebrations’ brand to encourage gifting during festive seasons. Cadbury’s Diwali message this year goes beyond its age old ‘a gift for someone you love’ slogan. Explains a Cadbury’s spokesperson, “With the new commercials, we want to take gifting to the next level and encourage people to go beyond giving gifts to their close circle of friends and family.” Going beyond chocolates, Cadbury’s Celebrations also introduced the ‘rich dry fruit collections’ almost a decade back and it continues to be a successful product.
The Cadbury’s Celebrations concept has been a case study for business school students around the world. Without changing the product, packaging alone drove sales and it is something no other chocolate brand in the country has been able to emulate.
Clothing is one product category where demand is at its peak during festive occasions. Says Nalli Kuppusami Chetty, head of the Nalli Group. “For us, sales increases by over 100 per cent during Diwali. In addition to everything else, for us, Diwali means enhancing our collections and releasing new designs.” For a brand like Nalli, planning for increase in demand goes beyond the festive seasons. It plans out for wedding seasons when more designs, especially, in the more expensive segment makes sense for them.
Explaining the enthusiasm during festive occasions, Prableen Sabhaney, head of communications, Fabindia, says, “From our perspective, it is a time when customers and retailers pull in the same direction to create a buzz in the marketplace. Special promotions, gift packs, a celebration oriented range of clothing and jewellery, all form part of the initiatives we put into place,” she adds.
The increased footfall calls for better crowd management as well as employee management to cope with the crowds. “We see a pattern in buying,” explains Chetty. “As the shopping frenzy begins, people tend to shop for saris and materials as they need to give time for stitching. Towards the end of the buying season, we find people crowding the ready to wear dhotis and salwars,” he says. So, over the years, Nalli has learnt to manage its staff through rotation of duties, with more staff in crowded counters. Finding people just for the season has become impossible these days. Companies like Viveks and Fabindia has inculcated crowd management as a topic into its training programmes.
The key to managing inventory is demand estimation. Companies like Cadbury do not mind estimating on the higher side. While Cadbury’s Celebrations products are not offered at a discount during the festive season itself, they have offers in place after the festival is over.
Chetty believes that India’s logistics industry has improved quiet a bit, so turnaround from production to retail is much better.
“We have a unique relationship with artisans and crafts-persons who form the core of our supply chain,” explains Sabhaney. As a result, safe carrying of inventory has its challenges since its products are produced largely in rural areas for an urban market. Over the years, Fabindia has created processes in place to handle this.
Festivals become a time to celebrate not only for consumers, but, for retailers as well, because of the increase in business. While everything from inventory to discount offers is important, several retailers also believe that brand loyalty continues to be a very important factor. And, that loyalty can only be built over time.