Apparel retailers ride promotion bandwagon to boost sales

 

Apparel maker and retailer Provogue offers an assured gift and allows shoppers to choose from its private brands under its ‘Winter Double Blockbuster’ offer. Shoppers who buy merchandise worth Rs 3,999 can win gifts such as a Videocon LCD television, Kodak digital camera, a 3-day/2-night holiday, among others. 
 

Loyalty card holders of department store Pantaloons can win a Sumo Grande MK-II vehicle or a 3 night/4 day Thomas Cook Holiday International Cruise if they shop for more than Rs 2,500. The chain also offers an imported designer glass set for only Rs 249 if shoppers shop for Rs 3,500 under its New Year Fashion Carnival. 
 

Shoppers can win a free Europe trip for four if they shop for more than Rs 1,500 at Tata’s Westside. 
 

Jeanswear brand Levis offers goodies such as party bags, Tarun Tahiliani make-up kits and more on ladies’ jeans.

Taking a leaf from consumer durable and automobile companies, apparel retailers have embraced innovative offers and promotions to entice shoppers to loosen their purse-strings further in the current season. While steep discounting was the norm in last winter’s sales, apparel retailers are doling out eye-popping offers this time, to sell more merchandise before the season ends.

“Our end of the season sales starts from January 15. We want to push out as much inventory as possible in the current season. Gaining market share in the peak season is always better than gaining it in the off season, as we can extract more value,’’ says Nikhil Chaturvedi, managing director of Provogue.

“Such offers create a lot of curiosity and increase footfalls by 20-25 per cent,”’ he adds.

However, last winter’s sales story was completely different. Hit by slowing sales, apparel retailers gave as much as 80 per cent discount to clear inventories and meet working capital requirements. Besides, they also gave discounts three weeks in advance.

Analysts say despite a jump of 20-25 per cent in the current season’s sales compared to last year, due to economic upswing, retailers are trying to push sales further to compensate for slower sales in the first half of this year.

“Everybody has gone through a tough phase in the first half of this year. Though the X-mas-New Year sales are up by 20 per cent, they want to bring further momentum,’’ says Purnendu Kumar of Technopak Advisors, a business consultancy.

Adds Ashesh Amin, a senior executive from S Kumars Nationwide: “Retailers are trying different schemes to liquidate their inventory. Whether it is discounts or offers, the impact is same.’’

While discounts shave 8-10 per cent off retailers’ gross margins, offers and promotions have marginal impact on margins, Kumar says. “Marketing budgets normally take care of offers and promotions and even brands participate in such offers,’’ he adds.