Sunday, September 28, 2014

Joining the bandwagon

A few days ago I was quite surprised to see this advertisements for a fairly well known silk saree shop which has several outlets in the city. End Of Season Sale (EOSS) is by now a familiar sight in the Indian Retailscape with lifestyle stores screaming offers of up to 50% or even 70% Off.

This seems to be actually a new trend and is worth watching out for – Start Of Season Sale (SOSS) or is it a sign of desperation and this actually means Save Our Store Sales (SOSS)!

Retail Promotion, Lifestyle Retail, Sale, Offer, Apparel, Sarees

Some key elements which are worth debating about;
  • The festival season kicks off with Navratri/ Dushera and extends all the way till Diwali. This is the time for large spikes in sales, especially in the apparel segment and silk sarees would definitely qualify. Why should the Retailer have such aggressive Buy One Get One Free offers along with some very steep discounts also.
  • If the intent is to clear stocks, then their pitch of updated collection is misleading and is actually bound to create a negative impact in the shopper’s mind set if that is not true. This category is very high on the impact of word of mouth and such misleading information will soon spread the negative message.
  • If the range is indeed updated and has new designs for the festive season, why this aggressive offer? This segment sells based more on design, colour, quality and service. In that context, why is the Retailer making it into a mass merchandise?
Too often nowadays I find Retailers who opt for the easy way out of “Buying Sales”. This means that they have offers and promotions which have no long term or even medium strategy and usually the only objective is to increase sales with no perspective about the cost of getting such sales. Which is why I have used the terms “Save Our Store Sales” (SOSS). Such offers invariably lead to conditioning the customers to start waiting out the Retailer till they offer such promotions and very soon the Retailer is forced to make this into a regular occurrence.

On the other hand, this might be a very canny Retailer who is starting off a new trend of Start of Season Sales and will try to capture a larger share of the customers festival spends in this category. However, even in such a situation the long term impact is not very positive and it is bound to become a compulsive habit not only for that Retailer but for that segment as a whole.

Apart from the EOSS trend there are two examples to validate the fact that these trends can very soon lead to a repetitive habit forming pattern. The first is the year end sale in the CDIT stores which was started by a Chennai based Retailer to beat the low sales during that period and is now a annual occurrence across this segment. The other is the “Aadi Sale” which has a similar background and now has become a default annual affair. Although these occasions are now used to clear old models and excess stocks, am not sure whether this pattern of having some sort of sales for almost half the year is a healthy trend.

Tuesday, September 9, 2014

Industry status for Retail in India might now be considered

In June  2014 I had penned “A Retailer’s wish list to Shri Modi” which was published in ET Retail. Within a span of 100 days I got an update about one of the points highlighted in the wish list.

The Deputy Secretary of the Ministry of Consumer affairs, Food and Public Distribution has written to The Secretary, Department of Industrial Policy and Promotion requesting that the proposal of according industry status to retail be discussed and further necessary action to be taken if found to be suitable.

Retail, Indian Retail, Retail FDI, Retail Industry, Retail Sector

This letter was copied to The Hon'ble Prime Minister of India and myself.

The key highlights of why industry status would be of great help is as follows –
  • Would help classify Retail and define different guidelines for the various segments.
  • Streamline the licensing and other regulatory systems into a single window.
  • Help to enable national platforms like a national registry of products which will make the introduction of computerized billing easier.
  • Enable skill and vocational training and employment generation
  • Ease of financing as guidelines which are specific to Retail can be notified.
Plus, there are many more game changing implications. I do hope that this Retailer's wish comes true.

I am very impressed and needless to say thrilled to have received this letter copy. Kudos to the Prime Minister and his team for reading and responding to this Retailer.