Deepak Bansal is a Whole-Time Director of the company. He is a graduate in mathematics from Delhi University. As a director, Deepak is responsible for the expansion and diversifying of the retail market and business of the company. He actively looks after the complete preparedness of marketing strategy. Deepak has an immense interest in finding the newer and upcoming markets & setting up retail footprints of the company there. He has an overall experience of 13 years in Retail Apparel Industry.
The COVID-19 pandemic has posed a prolonged uncertainty for most of the sectors of the world economy. Among the worst hit is the retail industry, as the aftermath of this pandemic has exposed the industry to an array of challenges that are impacting economy and livelihood.
Before the pandemic had hit the world, our retail industry accounted for 10% of India’s GDP and employed 8% of the workforce. While India ranked 63rd in the world for ease of doing business, the Indian retail industry stands to be the 5th largest global destination in retail space and 73rd in UN Conference on B2C Trade and Development in 2019.
However, the big money drivers, the malls, markets, and shopping complexes, were amongst the first to be shut down in the COVID19 era, even before the official announcement of the lockdown. While the demand for essentials soared, fashion retail suffered greatly.
As the lockdown was implemented, Fashion retail lost on the non-discount fresh merchandise period of sales. Furthermore, the supply chain broke and manufacturing halted. The migrant labour crisis left a huge deficit on the workforce, and a major drop in demand followed. Owing to gradual unlocking of the economy, as per the Confederation of All India Traders (CAIT), the overall retail industry suffered a loss of over Rs 5 Lakh Cr by May and Rs 15 Lakh Cr by mid-July.
Even in unlock 4.0, the challenges of lockdown remain, with various states implementing lockdowns suddenly and randomly, which is further causing disruptions in operations. These factors have majorly contributed to the big brands to reinvent their fashion retail strategy and leverage technology.
Extending end of season announcements. Contrary to popular belief, fashion retail is perishable. The goods may have a life to last years, but fashion does not. Hence, the brand new clothing line of this season gets old in a few months. Most retailers and brands had lost the peak of the season. Normally, the end of season sales are announced slightly early to push more purchases; however, this year many major brands have postponed the end of season sales dates between August and October to buy more time and push sales before the festive season.
Measured discount strategy. Mostly core brands like the apparel departmental stores went heavy on discounts during the sale period. However, not every brand is going berserk on sale discounts. Heavy discounts help to drive volume, which can justify the freebies by making more from the thin profit margin. However, in light of low demand, job losses, and reverse migrating population, many brands are not expecting demand to drive heavy sales by volume. Therefore, brands are opting to maximize value for sales by giving measured discounts.
Launches. The pandemic hasn’t deterred the brands from going forth with launches. Despite the uncertainty, many brands have gone ahead with the launch of new clothing lines and stores, sticking to their 2020 goals and keeping the excitement high.
Automating supply chain. Brands are leveraging technology for a number of objectives. As the demand begins to rise, brands are seriously integrating their supply chain processes via digital technology. The adoption of these technologies is adding greater visibility and data insights, which is helping brands comprehend the customer journey. Brands are leveraging enterprise resource planning technologies across stores, fostering end-to-end automation, from the purchase of raw materials to sales.
Omnichannel Approach: For fashion and apparel segment, physical stores are still more important in India. It is very important for an average consumer to feel the clothes or products they want to buy. However, COVID 19 has further pushed the already shifting behavioural change towards online purchases. E-commerce, which accounts for 5% of total retail and is primarily led by electronics (48%) and apparels (29%), has received a boost in the COVID era. Consequently, brands have fast-tracked upgrading to omnichannel retailing, extending to consumers a unified experience through an integrated eCommerce system, from brick and mortar to online marketplace, pushing offline and online sales. The industry is getting a good response from hyper-local, retail sales, and all D2C online initiatives.
Enhancing the customer experience. Staying in touch with the customers at the time of crisis is critical to retain customer loyalty. The industry is trying various measures to stay connected with confidence building communications, informing customers about safety protocols adopted at stores, and alerting them of discounts. Added to that, customer loyalty benefits are being enhanced through points and cash backs.
There is indeed customer reluctance to explore markets, and it is rightly so. The risks of contracting an infection cannot be ignored. However, the fear that COVID 19 can only be defeated by staying at home is partially counterproductive. In the recent past, more densely populated economies have contained the disease better by following the precautions actively while stepping out. If those microcosms of human habitat can perform better, then it is in India’s interest that we reinvent our strategies like the apparel retail and create a macrocosm of several such microcosms and allow the economy to revive.