When the country went into a lockdown to fight the coronavirus pandemic in March, most fashion retailers had just about launched their spring-summer collection. The two-and-half month lockdown not just brought their business to a standstill, the fashion brands also ended up with a pile of inventory. They had taken orders for their fall-winter collection which would hit the stores in August. As business is limping back to normalcy during the Unlock 1.0, one expected massive discounting so that the fashion retailers are able to liquidate their inventory. However, contrary to perception, fashion retailers across the board have decided against offering deep discounts.
As stores have started opening up in green and orange zones, brands have launched their new collection at full price. Kavi Mishra, CEO of the Rs 1,000-crore House of Anita Dongre says that fashion retailers have unanimously decided not to discount deeply. The plan, instead, is to carry forward their spring-summer collection to fall-winter. "Extended sales would dilute brand equity, we rather take this opportunity to correct our business model. We have cut down our fall-winter orders by 50 per cent and would continue to sell at full price for as long as possible."
"Bulk of our designs are season agnostic and we will carry forward those designs in fall-winter too. Inventory will be a big challenge for all of us, therefore we have cut down buys for not just for fall-winter but also for spring-summer 2021," says Siddarth Bindra, MD, BIBA India.
Amit Kumar Sirrohi, Business Head, Raymond Retail, in a webinar organised by the Retailers Association of India, had said that spring-summer and fall-winter collections were a concept adapted from the western world and its relevance in the Indian context was frequently being challenged. "With India having varied climatic zones, the industry was already considering a demand-led model to start manufacturing closer to the season and that too for specific pockets and not for the entire country. COVID could be an opportunity to re-look at our business model." In fact, brand AND, says Mishra, would also be looking at launching shorter collections at regular intervals in order to avoid inventory pile up.
As of now the only silver lining for the fashion retailers is online sales. The likes of AND which didn't sell their latest collection online, have now started doing so. "Earlier, online was 15 per cent of our sales, I now see it going up to 30 per cent. Consumers are increasingly willing to buy at full price online (most consumers typically shop online for discounts)," points out Mishra of AND. Bindra of BIBA says that online sales have doubled. "It is currently 25 per cent of our overall sales and going forward it should contribute up to 30-35 per cent to sales."
Digital transformation is going to be the buzzword of the Indian fashion retail industry. Raymond is sending out e-catalogues to its loyal consumers, and all customers have to do is click on the link, browse through the collection and place their orders. House of Anita Dongre has started selling on WhatsApp. "We have started sharing our WhatsApp number to our consumers, through which we are sending them our catalogue. One of our customers in Hyderabad bought 24 pieces of garments and the entire transaction was done on WhatsApp," says Mishra of AND.
For BIBA, digital transformation is also about staying relevant to its consumers. Through the lockdown the brand has stayed in touch with its consumers by organising not just virtual styling shows but also cooking lessons. "We have been giving them tips on how to style themselves while they work from home. These initiatives have generated lot of traction on our website even when we were unable to sell during the lockdown period," explains Bindra.
It will be interesting to see for how long the fashion retail industry will be able to sustain without offering deep discounts. All of them have huge piles of inventory.