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Brick-and-Mortar retail companies are back in the market

The physical retailers are also coming up with lot more promotional offers which have incentivised consumers to shop more.

twitter-logo Ajita Shashidhar        Last Updated: November 23, 2015  | 13:37 IST
Brick-and-Mortar retail companies are back in the market
The retailers have stepped up their advertising and marketing spends anywhere between 10 per cent to 15 per cent this year. (Photo: Reuters)

It's about a week after Diwali and the head honchos of several leading brick-and-mortar retail companies are on a well deserved holiday. After a lacklustre festival season last year (which was marked by empty malls with e-commerce luring a large chunk of consumers with irresistable discounts), the brick and mortar retailers, especially the fashion and apparel retailers have witnessed a 25-30 per cent growth in sales.
Almost 40 per cent of the traditional media (TV and print) ad spends in the last one year has been thanks to the e-commerce retailers. The likes of Amazon and Snapdeal had even hijacked all prominent outdoor media locations months before the festival season. However, this time around even the physical retailers have upped their ante to make sure that they don't lose consumers to e-commerce.

The first and foremost step most of the fashion retailers have taken is made sure that they haven't deep discounted on the various e-commerce platforms. "We allowed the e-commerce platforms only to deep discount on a single day, as the deep discounting last year had damaged our brand," says Manish Mandhana, MD, Mandhana Industries, which manages the Being Human brand.

Unlike last year, almost all the apparel and fashion brands have signed contracts with the online market places not to discount their current season merchandise. "If you notice there wasn't much deep discounting in fashion and apparel this year, most of the deep discounting happened only in mobile phones and electronic goods," points out retail consultant, Harminder Sahni, MD, Wazir & Co.

The physical retailers also stepped up their advertising and marketing spends anywhere between 10 per cent to 15 per cent this year. "We got into a strategy where we didn't discount, but communicated to our consumers that we we are a good value for money brand through print and television advertising. This really helped us have higher Diwali sales," says Subrata Datta, CEO, Fabindia.

Not only did the physical retailers communicate much more than than they ever did, they also came up with lot more promotional offers which incentivised consumers to shop more. From offers such as shop for more than Rs 5,000 and get free vouchers for Rs 750, to giving gifts to consumers who shopped for over Rs 8,000, the retailers this year have done everything they could have to woo consumers to walk in to their physical stores.

While promotional offers are not new, but the added marketing bucks spent and the buzz created by the brands has surely got the consumers back to the malls this festival season, points out Rajneesh Mahajan, Executive Director, Inorbit Malls. "When the advertising is aggressive, it creates a mood to shop. In fact, on the day before Diwali most of the fashion and apparel stores
 in our malls recorded the highest sales in a single day."

Inorbit Malls, itself, says Mahajan, had stepped up its advertising and marketing spends by over 10% this year and had done series of radio ads and social media activations especially during Diwali.

So, the debate on whether online retail will wipe out offline retail has finally ended. At least, the festival sales clearly shows that the Indian consumers have shopped offline as much as they have shopped online this year.


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