Online product price markdowns are becoming less common as big Indian retailers are beginning to avoid them. Despite running ongoing discounts, including the more recent End-of-Season-promotions (EOSS) and Republic Day promotions, retail chains like Shoppers Stop, Arvind Fashions, Aditya Birla Fashion, and Retail and Lifestyle have changed their approach, citing their incapacity to adequately restart online sales.
In order to maintain profitable growth, brands are also shifting their attention away from the very competitive online market and towards physical stores.
“We have switched to new stock at full price and altogether stopped offering discounts online,” department chain Lifestyle International’s chief executive officer, Devarajan Iyer, stated. “As a result, we have seen our brick-and-mortar sales recover, but online sales are still struggling because the channel is used to having discounts.”
For the past two years, retailers have been struggling with a decrease in sales as consumer spending has been impacted by inflation and financial strains. Additionally, the industry saw a surge of digital-first companies that prospered on sales, particularly in the wake of the pandemic.
In addition to taking market share away from more established stores, these brands also compelled some of them to reduce their pricing. According to Shoppers Stop CEO-beauty Biju Kassim, the market is overheated and it is difficult to maintain deals and promotions while expanding the company at the same time.
Marketers are lowering their own margins and providing more discounts, particularly during EOSS or special days, to increase sales, according to brands, even though they are curtailing their own discounts. Despite e-commerce regulations prohibiting foreign direct investment from influencing the selling price of products and services, this is the case.
According to a survey by Vector Consulting Group, which collaborated with NielsenIQ, mistakes between planned inventory and actual sales account for about one-third of the clothing sold by retailers in India on discounts or EOSS. But in an effort to close the gap between supply and demand, businesses indicated they are tightening their back ends.
