Early Bird Discounts: Are festive e-commerce sales stealing brick and mortar store’s thunder?
Every year, as the festive season nears a battle royal brews up between online and offline retailers. E-commerce majors like Amazon and Flipkart launch their festive sales weeks in advance, offering deep discounts and tempting deals. This raises a crucial question: are these early online sales cannibalizing offline sales that traditionally peak closer to Diwali?
As per RedSeer Consulting estimates online festive sales in 2023 reached a $15.2 billion. For 2024, projections are even higher, and some analysts predict the figure will cross $18 billion. While the online fashion and apparel segment contributes significantly to this growth, precise figures are difficult to isolate. We are seeing a definite trend of consumers starting their festive shopping earlier, drawn by the attractive online deals," says Kumar Rajagopalan, CEO, Retailers Association of India (RAI). "This inevitably impacts footfalls and sales in brick-and-mortar stores closer to the actual festival."
Meanwhile e-commerce platforms have reported significant year-on-year growth in festive sales. Flipkart, for instance, claimed a 330 million user visit during the first two days of its Big Billion Days sale in 2024. Meesho reported a 100 per cent increase in sales compared to the previous year.
Shifting market share
Indeed, the impact of early e-commerce sales on the overall market size is a complex issue. While some argue it simply shifts sales from offline to online, others believe it expands the overall market by encouraging early purchases.
"Early discounts create a sense of urgency and excitement, prompting consumers to buy items they may not have otherwise purchased," says Satish Meena, an e-commerce analyst. "This can lead to an overall increase in spending during the festive season." However, for traditional brick-and-mortar stores, especially smaller retailers, the early online onslaught poses a significant challenge. They often lack the resources to match the deep discounts offered by e-commerce giants, leading to a potential loss in sales.
The lines between online and offline are blurring. Many brands now adopt an omnichannel strategy, integrating both online and offline channels. This trend is likely to continue, with increased personalization. E-commerce platforms will leverage data to offer personalized deals and recommendations, further enticing customers. And offline stores will focus on providing unique experiences to draw customers back in, emphasizing personalized service, exclusive products, and engaging events.
While the impact of early e-commerce discounts on offline sales is undeniable, the extent of the impact remains debated. The festive season is undoubtedly becoming increasingly digital. Both online and offline players will need to adapt and innovate to thrive in this evolving landscape.
