The sparring between online retailers and their brick-and-mortar counterparts may reduce somewhat with manufacturers of sports and lifestyle products deciding they will produce exclusive merchandise to cater for e-commerce consumers. Moreover, companies say they’re going to take a tougher stand on the quantum of discounts to be given by e-tailers and the duration for which they will be offered, given the rift it has created between them and offline channels and, in some instances, losses. Numero Uno, for instance, saw its offline sales slump 70% in the footwear and accessories segments thanks to the huge discounts online. A couple of them have already shot off letters to e-tailers, threatening to stop supplies if the discounts aren’t withdrawn.
Harkirat Singh, managing director, Woodland India, told FE, “We have a written agreement stating that they need our approval before putting products on discount, which they did not adhere to. The letter had an effect.”
Narinder Singh, managing director of Gurgaon-based Numero Uno, also confirmed to FE that although e-retailers committed to a specific discount, they often ended up being more generous. “Not everybody sticks to their commitment, especially if the stocks are not moving,” he pointed out.
The launch of separate product lines for the online and offline spaces is aimed at pacifying all parties. Numero Uno will soon roll out an exclusive line, Village Indigo, for fashion store Myntra. Woodland will roll out new footwear and apparel lines for online customers as early as in December.
“Given e-commerce is bound to grow, the best way out of the problem is to offer non-competing products,” Singh said.
Puma India MD Abhishek Ganguly too believes product differentiation is one way to address the conflict between channels.
“Products sold at our exclusive stores will not be available online while products available online are not sold at our exclusive stores,” Ganguly said. Puma, which generates close to a fifth of its sales from e-commerce platforms, is also taking care to ensure that none of its latest products is being sold at a discount.