Post festive season, discounts back to boost sales

While almost all big retailers celebrated the festive season with a boom in sales, they were equally sceptical about business post Diwali. And their worries seem to be proving right. As in the past one week, hoardings and bill boards with ‘Flat 50%

off’ are back in stores and malls once again to attract consumers. Going with the tradition, the two-week-long ‘winter sale’ season should usually kick-start in the third week of January or first week of February, offering nominal discounts initially but this year, retailers along with big-ticket global brands like Zara have begun following the discount strategy much in advance with products at half the price.

During the Diwali period, while Shoppers Stop witnessed its highest single-day sales on the Sunday before Diwali at Rs 21.59 crores, leading a pack of big retailers celebrating the festive mood, others such as Future Group, Wills Lifestyle, Reliance Retail, Woodland and Lifestyle too saw one of their best week ever, with consumer sentiments bouncing back and stocks being cleared from shop shelves.

Experts point out that this year, the deep discount strategy has been adopted by the premium fashion brands first, since they have realised that they do better business in the sale month of January than in July-December. Therefore, in order to attract customers, these brands have started with a flat 50 per cent discount sale. The other reason behind early sale is, since brands and retailers start getting their new stocks from mid-February, they want to avoid existing or old stocks getting piled up. Meanwhile, the industry is worried that if business fails to pick up in despite discounted sales, the sale period may well stretch to a month like it happened last year.

The trend of announcing heavy discounts, much in advance and for longer time started last year, when consumer sentiments were low and the economy too was not upbeat. However, the trend was expected to witness a correction this year but unfortunately the it has continued and looks like, it’s here to stay.