End of season sale still the biggest lure for consumers

While experts are positive about the season ahead with a stable government at the Centre, apparel retailers/brands are still awaiting the return of consumers. And much like previous seasons, several brands have already announced their end of season sale to attract higher footfalls.

The industry is facing a similar situation where brands/retailers have had to announce heavy and extended sale period lasting almost six to eight weeks to draw consumers, who are yet to loosen their purse strings.

The sale saga continues

Retailers like Pantaloons and single-brand retailers such as Mango and Guess have already begun their promotions this week. End-of-season (EOS) sales that earlier typically lasted for just three to four weeks have begun to get stretched over six to eight weeks since last year, keeping the low consumer sentiment and slow economic growth coupled with inflation.

Last year, most retailers had started EOS sales in the last week of June and the sale went on till the third week of August. The Aditya Birla Group’s Pantaloons Fashion and Retail, which now operates the Pantaloons department store, has announced a two-day special preview for its inner circle members, with up to 60 percent off, a precursor to the EOS sale. And Mango and Guess started their EOS sales last week.

Whereas Kishore Biyani’s Future Lifestyle Fashion’s Central has kicked-off its EOS sale from July 1, while Fashion @Big Bazaar (FBB), operated by Future Value Retail will start its EOS sale from July 4. Experts assert that though the discounts would continue, companies would follow a disciplined way of discounting. According to them, with better inventory position, discounting will be less than before, while the period of sale will remain the same.

Positive consumer expected to drive business

Despite the political uncertainty, high inflation and economic slowdown, a recent global study by market research firm Nielsen shows that India continues to be the second most optimistic country in the world. It has highest consumer confidence level since the fourth quarter of calendar 2012.

The study states that India's consumer confidence level increased six points in the first quarter of the current calendar year (January-March) with a score of 121, trailing only Indonesia, the most upbeat country for more than a year with 124 points. 68 percent of urban respondents in India feel the country is going through a recessionary phase, and within this 54 percent say the country will be out of it in the next 12 months.

If the consumer sentiment is positive in the country then what is driving the industry to offer steep discounts and freebies? One of the reasons behind the forced into discounts is consumers waiting for the sale season to shop. For example, on the weekend of June 7-8, Best Seller Retail India, which operates brands Jack and Jones, ONLY and Vero Moda, ran a 24-hour sale at its flagship store in the Mumbai suburb of Khar, offering flat 60 percent off. The sale attracted 35,000 people, according to the sources.

Indeed, experts businesses expect things to take a positive turn with a stable government in place. And they are willing to wait for six months to a year, for good times to roll in, as predicted by experts.