08 August 2024, Mumbai
The much-anticipated End of Season Sale (EOSS) this July has failed to deliver the desired boost to the Indian fashion and apparel industry. Despite aggressive discounting and promotional offers, retailers are grappling with sluggish sales and mounting inventory pressures. Experts attribute this lackluster performance to several factors, including changing consumer behavior, inflationary pressures, and the early onset of EOSS.
Early onset of EOSS a dampener
A recent report by ICICI Securities revealed a 15 per cent year-on-year decline in sales for leading retailers like Shoppers Stop, Pantaloons, Reliance Trends, V-Mart, Max, Lifestyle, and Westside. To clear inventory, many brands initiated EOSS two weeks earlier than usual, some even in June, hoping to offload excess stock. This diluted the impact of the traditional sale period. While some retailers like Shoppers Stop offered discounts as high as 62 per cent, others like Reliance Trends, Lifestyle, and Pantaloons were in the 41-25 per cent range. Mall operators too reported lower-than-anticipated foot traffic during the EOSS period, suggesting a decline in consumer interest in traditional sales events.
Despite aggressive discounting, Reliance Trends witnessed a slower-than-expected sales growth during July. Industry analysts attribute this to increased competition and changing consumer preferences. Similarly, Shoppers Stop managed to clear a significant portion of its inventory, overall sales growth was muted compared to previous years.
Analysts attribute the lackluster EOSS performance to a shift in consumer behavior. Customers are becoming increasingly discerning and are no longer swayed solely by discounts, say market analysts. They are seeking value for money, quality products, and unique offerings, rather than blindly following sales.Moreover, the growing preference for online shopping and the rise of private labels have also impacted traditional brick-and-mortar retailers. And the early start of EOSS might have cannibalized sales from other periods, leading to a diluted impact overall. Retailers need to re-evaluate their discounting strategies and focus on building long-term customer relationships.
Then online platforms offering year-round discounts and personalized shopping experiences too have eroded the appeal of traditional sales events. And rising inflation and job insecurity might have impacted consumer spending on non-essential items like apparel.
Way forward
To revive the EOSS and drive sales growth, retailers need to focus on the following:
Personalized Offers: Offering tailored discounts and promotions based on customer preferences can enhance the shopping experience.
Omni-channel Strategy: Integrating online and offline channels to provide seamless shopping experiences can attract more customers.
Focus on Value: Instead of relying solely on discounts, retailers should emphasize product quality, sustainability, and unique offerings.
Indeed, the subdued performance of EOSS raises concerns about the overall health of the Indian fashion industry. Retailers are expected to focus on inventory management, strategic discounting, and omnichannel strategies to navigate the challenging market conditions.
