Coronavirus Impact: As retailers open shop; serious shoppers make a return resulting in 50% sale of the inventory

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Updated: Jun 02, 2020 10:13 AM

Despite a drop in footfalls by 50%, retailers claim to have posted an increase in the average ticket price

According to industry estimates, fashion as a category which includes apparel, shoes and accessories have reported a total loss of about $21 billion.According to industry estimates, fashion as a category which includes apparel, shoes and accessories have reported a total loss of about $21 billion.

As India rolls out its unlock 1.0 plan, brick-and-mortar stores have gradually begun to open starting from green zones to areas which have reported fewer cases so far. From single-brand retailers such as Bestseller – the owner of brands such as Vero Moda and Only, Celio, Puma to multi-brand retail outlets such as Lifestyle, has opened shop while following all the social distancing norms. “With added advantages like merging technology to meet ever-evolving needs through tech-enabled payment and billing options, introducing new-age services such as ‘buy & try’ where customers can make their purchase and try it at home at their convenience and strengthening our offering through curated, occasion-specific collections – we are expecting adequate footfalls in our stores,” Vasanth Kumar, MD, Lifestyle International, told BrandWagon Online.

According to industry estimates, fashion as a category which includes apparel, shoes and accessories have reported a total loss of about $21 billion. Of the overall retail industry which is valued at $850 billion, fashion accounts for 10% that is $85 billion. According to Abhishek Shetty, CMO and e-commerce head, Celio India, compared to pre-Covid-19 era, footfalls have dropped by 40%-50%, across stores. “However the rate of conversion has become better. For example, if 100 customers visit a shop now, of that about 50% are serious buyers, compared to pre-Covid-19 era which only saw 15%-20% consumers actually spending,” Shetty explained.

Interestingly, retailers claim that with serious shoppers now thronging, it has led to an increase in the ticket price. “We have been able to regain almost 50% of the business wherever stores have been opened. Also, the basket size has increased,” Vineet Gautam, CEO, Bestseller India – the parent company for brands such Only, Vero Moda and Jack & Jones, noted. Celio too claims to have seen an increase in the average ticket price to the tune of Rs 3,000 – Rs 4,000, compared to Rs 1,500 to Rs 2,000, during pre-Covid-19 era.

For retailers, much of the goods are sold on the back of pent-up demands, as advertising has no role to play. Calling it discretionary spend retailers plan to refrain from spending on advertising on traditional media. “We have continued to advertise on digital platforms,” Shetty noted. If the trend continues retailers will be cautious on spending on advertising during the festive season, this year.

Moreover, e-commerce has also begun to play an important role, with retailers opting for omni-channel strategy. As per Kumar, Lifestyle store staff has been contacting its frequent shoppers to guide them through the online store so that they can shop the latest collection and get it delivered safely to their doorstep. “We’ve just launched the pilot and are seeing a good response,” he added. For other brands such as Celio and Bestseller e-commerce currently contribute to 20% and 155 of the sales. This is expected to increase by another five percent in the coming months.

What Covid-19 has also brought is a change in shopping trend with customers preferring to shop on weekdays as against weekends, in an effort to avoid crowds. Moreover, shops located at regular markets are being preferred as opposed to shopping malls. “A lot of the habit has changed and is also in the process of changing. Even as retailers are able to meet 50% of the demand, the question is by when will they be able to meet 100%,” Rajat Wahi, partner at Deloitte India, said. With most of the migrants returning, retailers currently face a challenge of running a fully functional operation, not to mention, the spread of the virus is only adding to their woes.

Read Also: FCB India’s Rohit Ohri on the relationship between brands and agencies during Covid-19

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