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“Discount retailers and value-oriented brands stand to win”: Classic Polo

Usha Periasamy, Director, Brands & Operations, Classic Polo

Usha Periasamy Director Brands Operations Classic Polo“Consumer spending is dramatically curtailed during a recession. Consumers have adopted short-term behaviour during the pandemic that in many cases will become permanent, as a lesson learned from such unprecedented occurrences. Not only do consumers become more financially conservative but also credit may become less available and a large cohort may go into default on their debt, dramatically limiting purchasing power. Consumers will wake up from the pandemic in a new economic reality, changing their commercial behaviours in extreme ways. 

In this climate, discount retailers and value-oriented brands stand to win. This will also boost the trend toward value-oriented store brands. Spending will aggregate on need-based categories, with discretionary categories declining. Classic Polo is a value for money brand and therefore, presumes to stay stable with remodelling of strategies along with the advantage of in-house manufacturing. Future is cloudy and ambiguous for all brands and Classic Polo is no exception. How quick we understand consumer sentiment and resign the marketing blueprint with various permutation combinations will decide the business outcome.”

What is the current situation of India’s garment industry?

The COVID-19 pandemic forced retail down shutters, prompting an atypical disruption of economy. Retailers and brands will face numerous short-term challenges related to cash flow, supply chain, labour force, health and safety, consumer demand and marketing. Post pandemic a very different world would emerge. In order to ensure a future where businesses not only survive but also move ahead, it is critical to predict what a post-pandemic world has in store for us, and then we will begin to remodel to match the new reality. 

How would be the consumer spending be affected?

Consumer spending is dramatically curtailed during a recession. Consumers have adopted short-term behaviour during the pandemic that in many cases will become permanent, as a lesson learned from such unprecedented occurrences. Not only do consumers become more financially conservative but also credit may become less available and a large cohort may go into default on their debt, dramatically limiting purchasing power. Consumers will wake up from the pandemic in a new economic reality, changing their commercial behaviours in extreme ways. 

In this climate, discount retailers and value-oriented brands stand to win. This will also boost the trend toward value-oriented store brands. Spending will aggregate on need-based categories, with discretionary categories declining. Classic Polo is a value for money brand and therefore, presumes to stay stable with remodelling of strategies along with the advantage of in-house manufacturing. Future is cloudy and ambiguous for all brands and Classic Polo is no exception. How quick we understand consumer sentiment and resign the marketing blueprint with various permutation combinations will decide the business outcome.

China has played a pivotal role in the garment industry but after this, can we look at India as the next sourcing hub?

China being the major and main source for all industries, the slowdown will surely have an impact on overall business in a negative way. Significant qualities of our woven fabrics come from China and naturally if goods do not arrive on time, readymade garments industry is affected. If the crisis in China is prolonged, the impact would be severe. It is not easy to shift sourcing destination overnight. But buyers will have to look for alternative sources. Are the buyers ready to pay more is a million dollar question? So, it is not that easy. But yes, companies will look beyond China to survive in the long run. Need to wait and watch.

How is Classic Polo overcoming this challenge?

Those that sell high-demand pandemic necessities online are/will aggressively hire to meet demand they are increasing employee pay and boosting their supply chains. These retailers could well emerge with growth on a consistent scale. 

How do you foresee this fiscal year performing?

The net result for retail may be that a few retailers emerge stronger and many specialty stores and independents no longer exist.  Even well-positioned retailers may find they have to permanently close under-performing stores and make drastic cost cutting efforts to bolster their balance sheets. It’s easy to imagine India having 20-30 per cent less retail space by the end of the pandemic.

Has the government done enough to take care of the garment industry during this challenging time?

Apparel industry bodies are approaching government with various pleas and suggestions to support and combat the situation, which are yet to formalise. Common support on extension of tax payment and other deferments are being extended, while how much this will support businessmen and industry to overcome the pandemic’s residual effect is inexplicable. A significant consolidation of retailers will fundamentally result in emergence of new competitive landscape and partner ecosystem, this is a puzzle to solve. 

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