“With the stores reopening, we have seen some buoyancy coming back in retail. Of course, COVID-19 has had a significant impact on business and with the changes in the local rules on business operations, we were dealing with a dynamic situation and responding to it the best we could. Month on month, we have seen a steady recovery across the retail sector. Customers are getting used to the new normal, and are assured that the safety measures taken by the industry have increased consumer confidence which is reflecting in the sales numbers. However, we are seeing some variations in different markets and formats. For example, Tier-1 markets have a slower recovery rate compared to the other tiers and stand-alone stores have shown much better sales recovery compared to mall stores. Mall business seems to be catching up though, slowly but surely,” informed Vinay Chatlani, Co-founder and Executive Director, Soch Apparels.
Retailers were eyeing Diwali and had their hopes high that with the year-end celebrations, the market will gradually revive and they will be able to clock good sales numbers. How has the market been for them was the question we posed to them to get an insight.
Spending alterations are visible
“One marked change in consumer sentiments during and post the lockdown has been conscious spending. I have visibly seen more buyers in the premium tier and the value categories. Our offering fits within the premium category and since we sell premium casualwear, which gives people freedom to wear the attire to work and at home too, so we have been able to cater to the demands of the present situation. Overall for us, Diwali was like a silver lining and the sales hint at a good year end. However, the literally ‘no sales’ in the period between March and July cannot be made up just by the festive sales. But we are hopeful and keeping our spirits high for the future,” Rajesh Jain, Managing Director and CEO of Lacoste India commented.
In terms of sales contributions, he mentioned that the brand has been able to register good numbers through online sales of which 40 per cent happened through the brand’s own website. The online shift from offline Rajesh highlighted has been possible owing to the pandemic and he said COVID has been the catalyst making people comfortable with online shopping.
“Since the unlock began, stores opened very sparsely as somewhere it was evening, somewhere odd even days, and at some places the weekends were closed. Hardly 10 per cent of the total stores opened in first month. Owing to this, we rarely got any fresh orders and business partners waited for response from customers with inventory already stocked by them. In the beginning of the Unlock phase, the sales were not as we had expected due to severity of COVID-19. There were hardly any customers in market. Malls had not opened and therefore many shops were not opened,” averred Rajesh Jain.
“Comparatively online sale was better than offline. People today still consider to shop online than stepping out of their homes for shopping,” mentioned Ramesh Kapoor, CFO, Numero Uno.
The brand had reduced the planned buying quantity by almost 30 per cent to cope with fall in sales due to lockdown and reduced pocket capacity of consumers. “Diwali has improved sales numbers for the brand and we saw reduction in degrowth as compared to LY.
Considering India, a country where festivals are celebrated with much oomph and zeal, the sales during this period always give profits. However, this time it wasn’t at par with that in the year 2019 or before but yes it was better than previous months of unlock. We hope with the renewed hopes of vaccine and improvement in reduction of COVID cases, things from here on will be positive. We expect to end the financial year on not so reduced numbers as compared to LY. We are focusing more on website business, e-commerce. However, it is important to point that despite all this as a brand we have not compromised on quality and our standards and are giving best value for money to customers,” Ramesh Kapoor further added.
Focusing on customer satisfaction
“It is not just us but our segment in general has not been able to register a big traction since March. With work from home and stay at home becoming the trend, clothes for home is more appropriate right now. Keeping this point in mind, it is obvious that our sales have suffered. With Diwali some shopping has been done, but that cannot make up for the months of no sales. Also, our experience is more on the customisation side, so it is very much need based and can only pick up when the shirting sector starts seeing demands again. Right now we are thus, focusing more on the customer experience and want to ensure that whenever our customers plan to shop, they know who to come to,” Akshay Narvekar, Chief Executive Officer at Bombay Shirt Company mentioned.
“We did see some momentum during the pre-festive and the festive season. We had taken a healthy like-to-like target for the month of October and we achieved it and are on track to deliver on our November targets as well. This sales recovery was definitely very encouraging for retailers and we expect the trend to continue in the days to come. During the lockdown, there was a build-up of stock cover, and we were able to balance and rationalise new buys and inventory so as to cover the festive requirements with adequate inventory. We were particularly spared from a large stock build up due to our business model which looks at shorter lead times and more frequent buys and drops. Typically we have 10 drops in a year, and as such we were not in a position where we had committed to the entire summer drops, and had yet to close on our festive buys. This has put us at relatively good inventory levels. While we expect a longer EOSS period again, we will most likely have a larger percentage of fresh merchandise in the stores. We have also had a careful relook at our spends; prioritising the critical spends, delaying some longer term investments and reconsidering some expenses altogether. The period has also helped us to have a rethink about how we look at our business, helping prioritise what is really urgent, critical and distinguishing between good and bad costs. Spends on digital marketing, e-commerce, omnichannel have gone up; however, they are giving large yields,” Vinay Chatlani elaborated.