It is raining discounts, but not enough reasons to cheer as consumers are in no mood to loosen their purse strings yet. Hit hard by pay cuts and job losses, household income has shrunk, and discretionary spending is put on hold, maintained retailers.
Store walk-ins are minimal but online sales are picking up —prolonged work from home and Zoom calls have made some room for wardrobe reshuffling.
Tanvi Malik, co-founder at FabAlley & Indya, said despite extending the duration of sale and offering wider discounts, demand was tepid. The retailer typically kicks off the June-July sale with a 25-30% discount, which is later increased to about 50% towards the end of July. This year, the sale started with a 50% discount. “Offline retail is worst-hit. Sales are 80% lower compared to the pre-Covid times. Discretionary spending is low,” Malik told FE. During the Myntra sale, the retailer managed to sell only about 50-60% of the 30,000-35,000 pieces it usually sold before the pandemic outbreak. However, sales from online channels, including its own website, have reached close to 80% of the pre-Covid levels. “By August, things should start looking up and get better with the onset of the festive season,” Malik said.
Consumers are buying lots of lounge wear and classic shirts for Zoom meetings, she added.
Women’s casual clothing brand Madame offered huge discounts, up to 60%, during its mid-season and end-of-season sales (EOSS) launched in June. But that failed to attract a rush of customers. “Sales at the stores are heavily affected. Footfalls have reduced as customers are more inclined towards online shopping,” said executive director Akhil Duggar Jain. To cash in on the shift towards online shopping, the retailer is gearing up to launch monsoon sale on its online platform.
Biba is planning to postpone its mid-season sale till the end of July, which, otherwise, took place in June. MD Siddharth Bindra said sales at the stores had been slow but was picking up in areas where the number of positive cases were lower. “We see footfalls being a challenge till we have a vaccine. We will witness the market first and then respond accordingly,” Bindra told FE. Despite high street stores opening up, footfalls in cities like New Delhi have been limited. Biba, which is currently generating nearly 30% of its sales from e-commerce, is running an online only sale. To cater to the present consumer needs, the ethnic wear brand has launched sleepwear and loungewear.
Ramesh Pandey, whole-time director (marketing and events) at Ambuja Neotia Group that runs the City Centre malls in cities like Kolkata, said fear of Covid-19 was still looming large while pay cuts and job losses had further restricted footfalls. However, demand for work from home enablers like laptops, mobile handsets and tablets had translated into sales. The group’s malls that are launching their EOSS starting July 1 expect the discount and sale events to give a fillip to the business. “We have achieved between 25% and 30% of our pre-Covid sales and are hoping the sales to get doubled because of EOSS,” Pandey said. Retail partners are offering discounts of up to 51% and even beyond.
Work from home, spurring demand for athletic leisurewear and fitness merchandise, has worked in favour of Puma. The company, which has just commenced its EOSS, said though footfalls had been lower than usual, conversion rates were up. “Our apparel and footwear categories are doing well in India and loungewear is showing traction,” said Abhishek Ganguly, general manager, Puma India and SEA.