“The consumer is still cautious. He is spending, but not splurging,” says Govind Shrikhande, managing director, Shoppers Stop Ltd. The chain has seen 17% less shoppers this festive season compared with last year. Still, Shrikhande says there are signs of things returning to normal by December.
“The Diwali month can make or break a brand or retailer,” says Nilesh Gupta, managing partner, Vijay Sales, which runs a chain of outlets selling products such as television sets and washing machines in western India.
“For makers of consumer products such as television sets and washing machines, the proportion of annual sales is 30-35%. It is a third for apparel makers and a fourth for firms in the jewellery business.”
Above positions are not my words but people who consider themselves as experts are mouthing these recently ! It just sums up the mood of market at present !
I have been long advocating ethical practices in retail specially in garment and clothing business in India. I have been telling clothing retailers to practice genuine discount and premium price must give value for money to attaract customers.
Recession or no recession the customers perception is very important to induce and close sales. It is ridiculous in name of discount what retailers are doing is selling repackaged old stocks, hiking the price 2-3 times and then offering upto 70 % discount, resorting to gimmicks like putting a big banner announcing discounted items and when you lead in only to find a very small proportion and useless stocks on discount. All of these have gravely eroded potential customer trust and confidence in branded apparel retail or for that manner even in other product retails. There are very few players on the top level brands who are close to being honest about discount and having used discounts to actually clear old season stocks rather increasing sales.
Recession has also made our generation learn a hard lession that is to use money wisely and not to indulge splurge or impulsive buying unnecessarily. In this light optimism shown by some retailers that good old time will come back soon is misplaced ! Forget it. You got to work out a sales model which is grounded to reality.
There is no other way to win the customer back other than being transparent, avoiding cheap gimmicks, giving honest value for money and being innovative in product and services. For this require change of mindset of promotors, top managers who should realise that building customer base is a serious business and retaining those customers into repeat buys harder still.
So stop looking at short term gain, dig in for long battle ahead !!!