At Kishore Biyani-run hypermarket Big Bazaar, T-shirts for kids are showcased at three to four places within the store and not only at the earmarked space. The idea is, since such apparel falls under “impulse shopping category”, the retail chain is projecting the segment to push sales, says Sadashiv Nayak, joint-chief executive officer.
The chain has also cut apparel inventory turns by one to one-and-a-half weeks to have 'leaner inventory' and get 'retail ready' packs from its vendors' factories to reduce touch-points and cut costs.
"Every rupee we save in the supply chain, we want to pass it on to the consumer. Temporarily, it may look like cutting down orders, but it is a one-time correction to have learner inventory,” said Nayak.
The need arises from the fact that Pantaloon Retail, which runs Big Bazaar, had posted one of the lowest same-store sales (SSS) growth in the September quarter in the value and lifestyle segments in two years, indicating subdued consumer sentiment amid uncertain economic conditions. Its value segment has formats such as Big Bazaar, Food Bazaar and KB's Fair Price. The lifestyle segment has Central and Pantaloons, among others.
| FOR A LEANER LOOK |
| * Big Bazaar cuts apparel inventory turns by one to one-and-a-half weeks |
| * Gets retail ready packs from vendors’ factories |
| * Has more display counters for T-shirts for kids |
| * Provogue cuts down on apparel purchased from vendors to 1,500 from 1,800 |
| * Aldo, Nine West give mid-season sale |
Same-store sales is a metric which helps investors to know what portion of sales come from existing stores.
Hit by a slowdown in consumer spending and rising inventories, retail chains are cutting their orders and using innovative marketing tricks to push sales.
Apparel retailer Provogue, which used to buy 1,800 pieces from vendors every season, now buys only 1,500 pieces due to the current slowdown in sales. The chain is also giving a Rs 1,000 gift voucher on purchase of material worth Rs 4,000 to “motivate its customers,” said managing director Nikhil Chaturvedi. "In a bullish market, we do not mind inventory. But in a slowdown, we do not want a pile-up on our inventory.”
Rahul Mehta, president of The Clothing Manufacturers Association of India said retailers were delaying procurement orders from vendors. "There is a 20 per cent drop in the number of orders that come in," Mehta said.
A number of brands are going for mid-season sale or giving one off discounts to woo buyers. If women's apparel store chain Sepia is opting for “silent sale”, giving a 10 per cent discount, shoes and accessories chain Nine West and Aldo are doing part sale, where they give up to 50 per cent discount. And, shoe and accessories brand Charles and Keith is giving 30 per cent off on the second pair of shoes.
These brands usually do not give such offers and discounts.
"Lower consumer spend due to increase in prices, especially in fashion category, also resulted in most competitors extending their end of season sales by a week or two,” Pantaloon Retail said in the latest analyst presentation.
Pantaloon recently rebranded its Fashion @ Big Bazaar concept into FBB to make it trendier, youth-focused and Big Bazaar revamped visual merchandise inside the stores. Apparel prices have gone up 30 to 40 per cent in 12-18 months due to rise in raw material prices, increase in excise duty on branded apparel and so on, which has discouraged buyers. A slowing economy, falling markets and rising equated monthly installments have left lesser disposable money in the hands of people, say analysts and companies. "There is a stagnancy in growth. Retailers should offer more affordable products and cut out on the premium products,” said Arvind Singhal, chairman at retail consultancy Technopak Advisors.
