Brick-and-Mortar retail in India has been in constant conflict with online retail for the past few years. One of the main reasons for this turmoil has been the depleting level of sales that offline retailers have had to deal with. It’s 2017 now, and things are looking a little upbeat for the offline retailers. At least the ones in the apparel and fashion divisions. For quite some time, online retail enjoyed all the customer attention. This was mainly due to the availability of products at a lower price online – clubbed with the obvious convenience that online shopping offers.
Offline retailers for the past few years have tried to do all things that are in their control to regain some momentum. Which includes – implementing dynamic pricing strategies for the products in-store, enhancing the overall in-store experience of customers, attending to customers on a multi-channel level, altering the overall retail marketing initiatives from time to time etc. But, the results with regards to sale were far from being favorable on a consistent basis. Until now of course. Although, only the apparel retail division is being considered here, it might just be the sign of things to come as far as offline retail in India is concerned.
Evidence of Fashion & Apparel Retail Division flourishing
As mentioned above, not much of what the in-store retailers have tried has worked in the last few years. But, the current lack of online discounts across various categories have turned the tide significantly. Now suddenly, customers value the in-store experience they get. The demand for cheap priced products online is slowly being trumped by the dynamic pricing strategies that offline retailers offer. Latest reports of the recent success of four of the country’s top listed retailers validate these facts.
The apparel and fashion division of these top four retailers in fiscal 2017 grew at the fastest pace in the last three years. The ‘Pantaloons’ division of ABFR, Future Lifestyle Fashions, Arvind’s lifestyle brands and Trent posted 14-26% sales growth in the year through March. Individually, the 2016-17 sales growth of each of them has been recorded to be 18%, 17%, 26% and 14% respectively. Shoppers Stop too recorded a growth of 7%.
Factors that led to the Offline Surge
A lot of reasons may be associated with the offline surge in apparel & fashion retail. As discussed earlier, one of the primary reasons include the inconsistency of online retail in providing lucrative offers across various categories to the customers. This is mainly due to the constant pressure exerted by the investors to report profit. Besides, offline retailers often brought down the store price of items just to match up to online. Also in recent times, online retailers have not been able to provide consistent discount on fresh merchandise. There are also reports that claim that a shift in regulatory norms has had a bearing on the pricing strategy of online retailers.
Meanwhile, offline retailers continued doing what they do best, i.e.- match up to the online retail through their retail operations. They understood that a multichannel presence will only make things more favorable for them as they could now appeal to online only customers as well. Dynamic pricing strategies in-store, coupled with online buying facility were bound to pay rich dividends sometime. Besides, experts from the top retail firms also confirm that not every customer is always concerned about discounts. There are customers who come in for the in-store experience and the latest merchandising as well.
Thus, the combination of a plethora of reasons has ensured that the growth in sales of the apparel & fashion division of the major retailers of India have skyrocketed. Time will tell whether this is a trend that is confined to only this sector, or if it’s a sign of things to come for the entirety of offline retail.