PRIM­ING UP FOR HIGH OC­TANE FES­TIVE SALES

NEW PROD­UCTS, SPE­CIAL FES­TIVE RANGES, GIFT PACKS AND IN­NO­VA­TIVE OF­FERS FOR CUS­TOMERS

Progressive Grocer (India) - - Front Page - By San­jay Kumar

It’s that time of year again. With Rak­sha­band­han, Onam and Jan­mas­thami act­ing as pre­cur­sors to the great In­dian fes­tive sea­son that will peak around Di­wali and cul­mi­nate with Christ­mas and New Year, the air’s abuzz with the cel­e­bra­tion of good food, drinks and more re­tail ther­apy than usual. While fes­ti­vals and hol­i­days oc­cur through­out the year in In­dia, the sec­ond half of the year is widely con­sid­ered the fes­tive sales pe­riod, as it fits in nicely with a lot of cel­e­brated hol­i­days. Tra­di­tion­ally, cus­tomers in In­dia wait for the fes­tive sea­son to make bulk pur­chases and in­dulge in pre­mium pur­chases. Tak­ing this be­hav­ior into ac­count, brands and re­tail­ers set in mo­tion their plans to cash in on the fes­tive spirit by launch­ing new pro­mo­tional cam­paigns, prod­uct lines, at­trac­tive prod­uct as­sort­ments, great deals and sales strate­gies. The sea­son is par­tic­u­larly im­por­tant for the re­tail busi­ness, given the fact that sales vol­umes go up sig­nif­i­cantly dur­ing the pe­riod, thus boost­ing the yearly per­for­mance.

For most re­tail busi­nesses, the sea­son is a fi­nan­cial wind­fall, and there’s plenty of rev­enue for the tak­ing. Fes­tive shop­ping ac­counts for about 40 per cent of an­nual sales for most re­tail­ers. Del­hincr based 24 SEVEN con­ve­nience stores chain an­tic­i­pates a surge in busi­ness dur­ing the fes­tive sea­son this year as has been cus­tom­ary in the past as well. For the re­tailer, busi­ness fares much bet­ter this time around as the con­sumer sen­ti­ment is more up­beat and shop­pers spend not only on gift­ing to oth­ers but on self as well. That is why re­tail sales dur­ing the fes­tive months have tra­di­tion­ally out­per­formed busi­ness ac­tiv­ity in rest of the year and this spike in con­sumer ac­tiv­ity bodes well for busi­nesses in gen­eral and the re­tail in­dus­try in par­tic­u­lar. Shop­pers en­joy the mass fes­tive sales as many of them hunt for good bar­gains and mer­rily part with their money in fes­tive cheer. To meet this trend, 24 SEVEN port­fo­lio will also be brim­ming with new items and will see the re­turn of fa­vorite hot sell­ers from last year to sat­isfy the over­all gift­ing needs. The stores will also be decked up dur­ing this pe­riod to con­vey the joy, hap­pi­ness and spirit of the sea­son. The chain is also work­ing on joint busi­ness plans with brands – from cre­at­ing unique as­sort­ment to spe­cial of­fer­ings and to bring about im­prove­ment in its fill rate – with the sole agenda of con­nect­ing more mean­ing­fully and reach­ing out to its cus­tomers in big­ger ways this fes­tive sea­son as com­pared to the pre­vi­ous years.

Like­wise, Lud­hi­ana-based Kipps Mart is pre­par­ing to roll out the red car­pet this fes­tive sea­son. “Ev­ery year, we ex­pect some­thing new and ex­cit­ing to en­ter the mar­ket in the fes­tive sea­son. This year too, we are plan­ning some in­no­va­tive ideas for the com­ing months and ex­pect a good re­sponse from cus­tomers. We are look­ing to com­bine the oc­ca­sion of Di­wali with the wed­ding sea­son this year, which wit­nesses a gift­ing spree and a boom in the de­mand for items like gift bas­kets. Mid­novem­ber is the time­frame we are tar­get­ing to roll out our fes­tive of­fers. At the mo­ment the mar­ket is dull but we ex­pect things to pick up soon. We wit­ness slow busi­ness trac­tion around Dussehra and the nine-day Navra­tri cel­e­bra­tion as con­sumers sel­dom pur­chase mar­ket prod­ucts dur­ing re­li­gious fast­ing. This is an ob­sta­cle in an oth­er­wise prof­itable sea­son,” says Hitesh Arora, Di­rec­tor, Kipps Mart whose prod­uct range mostly fo­cuses on gourmet items with al­most all its prod­ucts im­ported and sourced from in­ter­na­tional brands.

Ac­cord­ing to mar­ket sur­veys, shop­pers re­sort to a higher spend in al­most all key cat­e­gories – a 25 per cent in­crease in av­er­age monthly spend on sta­ples and pack­aged foods dur­ing the three months of the fes­tive sea­son (Oc­to­ber-de­cem­ber), com­pared to the av­er­age monthly spend in the pre­vi­ous six months till Septem­ber. It is es­ti­mated that there is

We are look­ing to com­bine the oc­ca­sion of Di­wali with the wed­ding sea­son this year, which wit­nesses a gift­ing spree and a boom in the de­mand for items like gift bas­kets. Mid-novem­ber is the time­frame we are tar­get­ing to roll out our fes­tive of­fers. — Hitesh Arora Di­rec­tor, Kipps Mart

a 12 per cent in­crease in spend­ing on gro­ceries and a 50 per cent in­crease in spend­ing on ap­parel in the Oc­to­ber to De­cem­ber pe­riod com­pared to the three months end­ing Septem­ber. Some­time ago, in­dus­try body As­socham came out with a re­port that said con­sumers ex­pected to splurge about Rs. 52,000 crore on shop­ping dur­ing the fes­tive sea­son, be­gin­ning with Navara­tras and con­tin­u­ing well up to Christ­mas. His­tor­i­cally, shop­pers tend to spend more dur­ing the fes­tive sea­son and their spend­ing dur­ing the hol­i­day sea­son is of­ten ex­u­ber­ant and un­re­strained. A large per­cent­age of con­sumers set aside a bud­get for their fes­ti­val spend­ing for buy­ing gifts for them­selves, chil­dren, fam­ily, friends and rel­a­tives.

Gift­ing: A Big Pull Fac­tor for Re­tail­ers and Brands

Ac­cord­ing to re­tail con­sul­tancy Technopak, the gift­ing in­dus­try in In­dia has regis­tered a strong growth over the past decade thanks to the ris­ing in­come lev­els and as­pi­ra­tions. Also, aid­ing this growth are such fac­tors as (on the de­mand side) the widen­ing of the cus­tomer base, and (on the sup­ply side) the of­fer­ing of in­no­va­tive prod­ucts at at­trac­tive prices. The gift­ing mar­ket’s size is es­ti­mated at USD 42 bil­lion, with many in­dus­try play­ers re­port­ing an­nual growth in the range of 20-40 per cent dur­ing the fes­tive months. With gift­ing be­ing an in­dis­pens­able part of the fes­tive sea­son, the cat­e­gory has tra­di­tion­ally been dom­i­nated by sweets, dried fruits and choco­lates. How­ever, in re­cent years, the gift­ing seg­ment has grown and ex­panded con­sid­er­ably and now in­cludes myraid prod­uct cat­e­gories, even within the food seg­ment. No won­der that mar­kets sud­denly come alive with an ar­ray of ‘gifta­bles’ dur­ing the fes­tive months. Though the sea­son con­tin­ues to be strongly dom­i­nated by sweets, choco­lates, dry fruits and snacks, sales of non-tra­di­tional prod­ucts like tor­tilla packs, ex­otic teas, cof­fee and fruits, jams, honey, saf­fron, marsh­mal­lows, crack­ers, sauces, wines, etc, have picked up sharply in re­cent years.

“Fla­vor­ful and ex­otic drinks are pop­u­lar with health-con­scious and well-trav­eled con­sumers. Chia-based prod­ucts have be­come best-sell­ers. Tea and cof­fee gift­ing items have also re­ceived a good re­sponse. We have a spe­cial gift­ing bas­ket for tea, which has a se­lec­tion of dif­fer­ent fla­vors of tea and is pack­aged with a ket­tle. This par­tic­u­lar ham­per is ex­pected to work well this sea­son as the win­ters are around the cor­ner and con­sumers like to gift loved ones an ex­otic hot bev­er­age to spread warmth. We also op­er­ate a sep­a­rate bak­ery seg­ment that has its own gift­ing range, which in­cludes ham­pers of pop­u­lar bak­ery items like mini cup­cakes. Dry fruits have al­ways been a pop­u­lar gift­ing choice but we see an in­cli­na­tion to­wards healthy eat­ing and that shows up even in the sweets cat­e­gory. Seeds and nuts gift­ing bas­kets are also com­mon now as they speak to con­sumers by way of their health ben­e­fits. We also have a cater­ing com­pany that sees a lot of busi­ness at this time. Start­ing Oc­to­ber, we will be launch­ing the gift­ing range at our re­tail out­lets,” in­forms Kipps Mart’s Arora.

Re­tailer 24 SEVEN be­lieves that gift­ing is a pull fac­tor and stores can dif­fer­en­ti­ate only by up­grad­ing to bet­ter op­tions, bulk deals and cor­po­rate gift­ing. In keep­ing with this ap­proach, it will of­fer­ing spe­cially cre­ated bas­kets in dif­fer­ent cat­e­gories such as snacks, fruits, dry fruits, juice, choco­lates & sweets and many other unique prod­ucts and tai­lor made gift bas­kets de­pend­ing on cus­tomer de­mand. The fo­cus would be on of­fer­ing healthy op­tions with unique pack­ag­ing and at price points rang­ing across Rs. 150 -200, Rs. 400-600, and Rs. 1,200-1,500. In fact,

one way for food gro­cers to of­fer great value and also nour­ish their bot­tom lines is to fo­cus on help­ing shop­pers make the most nu­tri­tious choices for the sea­son. The fes­tive sea­son shouldn’t be an ex­cuse to jet­ti­son one’s com­mit­ment to healthy eat­ing en­tirely, although smart in­dul­gences can cer­tainly be per­mit­ted.

What can brands and re­tail­ers do to en­cour­age shop­pers not to fall off the healthy-eat­ing wagon? For a start, they can stock plenty of lower-sodium, no-sugar-added, gluten-free and re­duced-fat ver­sions of hol­i­day fa­vorites, place them on prom­i­nent dis­play, ad­ver­tise them in cir­cu­lars and fur­ther sweeten the deal with dis­counts and crosspro­mo­tions. Ad­di­tional in­cen­tives in­clude recipes us­ing the health­ier prod­ucts, in-store sam­pling, and spot­light­ing bet­ter-foryou items in so­cial me­dia fo­rums. Such moves may not con­vert all con­sumers, espe­cially dur­ing pe­ri­ods that many view as prime time for fes­tive food free-foralls, but they will aid those who are try­ing to stick to health­ier eat­ing habits and main­tain their di­ets (and waist­lines) dur­ing a time nor­mally fraught with culi­nary temp­ta­tion. Per­haps most im­por­tant for gro­cers, th­ese tac­tics will in­spire last­ing loy­alty in shop­pers, who’ll know that their go-to gro­cery store has their back when it comes to health and well­ness.

Fes­tive sea­son, through the medium of gift­ing, es­tab­lishes con­nect and this is a theme present across all prod­uct cat­e­gories. This trend helps brands to cre­ate buzz by launch­ing new prod­ucts in the mar­ket. Also, launch­ing gift packs is al­ways ben­e­fi­cial for both the pro­ducer and con­sumer. Con­sumers get more op­tions and choices and the man­u­fac­turer gets the ben­e­fit of place­ment of the prod­uct. That way, the qual­ity of prod­ucts gets tested and ul­ti­mately the good qual­ity prod­uct is able to carve its iden­tity in the mar­ket. Once the prod­uct is ac­cepted, the man­u­fac­turer can con­vert the gift pack into reg­u­lar busi­ness. “We have theme-cen­tric gift­ing op­tions for our cus­tomers. For ex­am­ple, as part of a range meant for baby show­ers, we in­tro­duced a cake spe­cial bas­ket that in­cluded prod­ucts re­lated to bak­ing and con­fec­tionery. El­e­ments in the cake bas­ket in­cluded items like bak­ing pow­der, choco­late chips, Nutella, cook­ing in­stru­ments such as oil brushes, spat­u­las and oven­friendly con­tain­ers used for pack­ag­ing the bas­ket. The con­cept be­hind such in­no­va­tive bas­kets is to have the cus­tomer be able to use ev­ery prod­uct in the bas­ket. Ev­ery item is care­fully se­lected so that the cus­tomer can make ev­ery­day use of it. Even the bas­kets them­selves are re­us­able and of­fer an ad­di­tional prod­uct at­tribute,” in­forms Arora.

His store is also known for in­tro­duc­ing cuisine­cen­tric bas­kets that come pack­aged in a non-stick pan and have the same ‘use ev­ery­thing’ phi­los­o­phy. One ex­am­ple is that of a spe­cially cu­rated gift bas­ket for con­sumers who en­joy Ital­ian cui­sine. The Ital­ian bas­ket comes packed with good­ies such as olives, dif­fer­ent types of pas­tas, va­ri­eties of cheese, healthy cook­ing oils etc. Some of its gift items come pack­aged in wooden trays that can be used in each house­hold for sev­eral dif­fer­ent pur­poses. This con­cept also re­duces dis­pos­able trash and is an eco-friendly ap­proach. “In my opin­ion, a gift item should be such that it is us­able on a reg­u­lar ba­sis and must have func­tional at­tributes. A dec­o­ra­tional item may be more pleas­ing to look at, but the per­son who re­ceives a gift like that of­ten places it some­where and for­gets about it,” says Arora. Ac­cord­ing to var­i­ous stud­ies on con­sumer spend­ing habits dur­ing the fes­tive sea­son, the largest por­tion of a con­sumer’s hol­i­day bud­get go to­ward gifts for fam­ily mem­bers, on kids, par­ents, friends and co-work­ers. Shop­pers want­ing to treat their loved ones to some­thing spe­cial are tempted to take ad­van­tage of spe­cial pro­mo­tions and dis­counts to treat them­selves and their loved ones. Re­tail­ers slash prices with the ex­pec­ta­tion that fes­ti­val pro­mo­tions will mo­ti­vate shop­pers to buy more of their prod­ucts as gifts for fam­ily and friends. Com­pa­nies in­vest heav­ily to pro­mote the sales they are hav­ing, lead­ing to a dis­pro­por­tion­ate amount of spend­ing dur­ing this sea­son among brands and con­sumers. Ac­cord­ing to Nielsen’s Shop­per Trends Study con­ducted two years ago, about 38% of shop­pers claimed to be ac­tively seek­ing prod­ucts at dis­counted prices as against 35% in 2015. Shop­pers are con­sciously seek­ing deals; hence ef­fec­tive promo com­mu­ni­ca­tion at the point of pur­chase be­comes ex­tremely im­por­tant for brands and re­tail­ers.

De­ploy­ing Strate­gies for Con­sumer Con­nect

As con­sumers around this time are in the mood to spend – whether shop­ping in-store, on­line or on their phones – brands and re­tail­ers are only too happy to of­fer them good value for their money. So,

Shop­pers en­joy the mass fes­tive sales as many of them hunt for good bar­gains and mer­rily part with their money in fes­tive cheer. To meet this trend, 24 SEVEN port­fo­lio will also be brim­ming with new items and will see the re­turn of fa­vorite hot sell­ers from last year to sat­isfy the over­all gift­ing needs.

many re­tail­ers and brands com­pete on price, caus­ing the hol­i­day sea­son to be very pro­mo­tional and mak­ing the pe­riod a tremen­dous win for con­sumer. An­other sure­fire way for busi­nesses to con­nect with con­sumers and make them em­brace the hol­i­day spirit is to launch and come out with fes­ti­val themed and gift­ing prod­ucts. For­tunes have been made by re­tail­ers and brands that are able to suc­cess­fully pre­dict new trends that break from pre­vi­ous pat­terns. But re­tail­ers and brands also need to work over­time to stream­line their fore­cast­ing and or­der­ing sys­tems to con­trol their in­ven­tory, which is cru­cial to their suc­cess. They need to ex­er­cise dis­ci­pline and sharpen their strat­egy for the rush fes­tive sea­son to emerge as win­ners. ““Our plan is to ex­ceed guests’ ex­pec­ta­tions, sur­prise them through se­lec­tion, taste and over­all shop­ping ex­pe­ri­ence, truly mak­ing it a great fes­ti­val shop­ping ex­pe­ri­ence. We are al­ways re­search­ing trend­ing op­por­tu­ni­ties and for this year fes­tive sea­son, we will have at­trac­tive mer­chan­dis­ing dis­plays show­cas­ing dif­fer­ent va­ri­eties of prod­ucts,” says Arora.

Gift packs for choco­lates and banded salty snacks are nor­mally big sell­ing items dur­ing fes­ti­vals like Di­wali. “Choco­lates have al­ways been pop­u­lar and any new for­mat of fla­vor proves suc­cess­ful with con­sumers. We carry gift­ing ham­pers with pop­u­lar and mixed choco­late sam­ples from Lindt USA and Go­diva. Our Lindt choco­late col­lec­tion starts from Rs. 800 and has pack­ages avail­able in dif­fer­ent sizes for dif­fer­ent price points. Our gift­ing range tarts from Rs. 1,500 and ex­tends to Rs. 5,000. We also have pre­mium ranges avail­able for Rs. 8,000. In more re­cent times, gift­ing trends have moved away from just stand-alone choco­lates and have fo­cused on com­bined bas­kets with a cen­tral theme. One can also see how the gift­ing cat­e­gory now in­cludes sa­vory com­po­nents in ad­di­tion to tra­di­tional sweets,” in­forms Arora.

Shop­pers are in­creas­ingly be­com­ing deal seek­ers with the ob­jec­tive of max­i­miz­ing their sav­ings. Bulk packs with large dis­counts tick all the rel­e­vant boxes on sav­ing, value and dis­count for the shop­per. As ex­pected, most bud­gets will be al­lo­cated to hol­i­daythemed prod­ucts with a gift­ing ap­peal. While there will be plenty of pop­u­lar items on con­sumer wish lists this fes­ti­val sea­son, but the most sought-af­ter cat­e­gory ap­pears to be gifts in the form of choco­late, snack, bev­er­ages, sweets, dry fruits and nuts and espe­cially pre­pared food gift ham­pers. It has been ob­served that con­sumer spend­ing on dur­ing fes­ti­vals on con­fec­tionar­ies, bak­ery prod­ucts, snacks and bev­er­ages, etc. in­creases sig­nif­i­cantly. Ac­cord­ing to Nielsen, Foods which in­clude pack­aged foods, sta­ples and bev­er­ages gen­er­ally make up 65% of ur­ban In­dia’s an­nual re­tail mod­ern trade sales. This con­tri­bu­tion re­mains the same dur­ing fes­ti­vals like Di­wali, when we see al­most two-thirds of the sales com­ing from this seg­ment. Pack­aged foods and sta­ples are the largest con­trib­u­tors to the food seg­ment.

Pack­aged foods’ con­tri­bu­tion dur­ing all big events and oc­ca­sions is 29%, but dur­ing Di­wali, it goes up to 35%. Cat­e­gories like ghee, salty snacks and choco­lates peak in sales dur­ing Di­wali, though, ac­cord­ing to Nielsen, this in­creased con­tri­bu­tion does not com­pletely hinge on price pro­mo­tions. But this is the pe­riod when food and bev­er­age com­pa­nies have the big­gest op­por­tu­nity to con­nect with the In­dian con­sumers with their new prod­uct of­fer­ings for the fes­tive sea­sons through in­no­va­tive ad­ver­tise­ments and mar­ket­ing cam­paigns, lu­cra­tive dis­counts and of­fers such as buy one get one free. For ex­am­ple, Cad­bury came up with a new ad cam­paign for their prod­uct Dairy Milk dur­ing Di­wali through which they ad­ver­tised choco­late as a sub­sti­tute for the Di­wali sweets. Coca-cola In­dia had in last quar­ter of 2016 re­leased its So­cial Oc­ca­sions cam­paign for the fes­ti­val sea­son fea­tur­ing ac­tor Deepika Padukone.

With con­sumers out in the stores look­ing for hol­i­day gifts, re­tail­ers are en­cour­aged to pro­mote hol­i­day mer­chan­dise, unique pri­vate-la­bel of­fer­ings and re­spond to the needs of their shop­pers who are also ac­tively scout­ing for bar­gain hunt­ing. It is cus­tom­ary for com­pa­nies to de­vise and come up with dif­fer­ent ways of demon­strat­ing great value to their cus­tomers by mak­ing of­fers that pro­tect the brand in­tegrity but also pro­vide value to the con­sumer. As con­sumers be­come more price- and- value-con­scious, the key to win­ning them over is hav­ing the right

While there will be plenty of pop­u­lar items on con­sumer wish lists this fes­ti­val sea­son, but the most soughtafter cat­e­gory ap­pears to be gifts in the form of choco­late, snack, bev­er­ages, sweets, dry fruits and nuts and espe­cially pre­pared food gift ham­pers.

price and pro­mo­tions strat­egy in place in the buildup to the fes­tive sea­son and the New Year. Re­tail­ers also need to in­vest in other sources of value beyond dis­counts – unique mer­chan­dise, cus­tomer re­wards, added ser­vices, en­gag­ing in-store ex­pe­ri­ences – that help build loy­alty and sales. At the same time it is also im­por­tant to lis­ten to cus­tomers and mea­sure their be­hav­iors through test­ing and scal­ing. One also needs to keep an eye on longer-term trends ver­sus just short-term re­ac­tions and be agile enough to tackle the change – from de­sign to mes­sag­ing, tech­nol­ogy re­quire­ments and train­ing – with cross­func­tional teams rather than hand-offs across si­los.

In a coun­try like In­dia, where pur­chase de­ci­sions are mostly driven by emo­tions, the fes­tive sea­son comes with a big bonus of re­mind­ing cus­tomers about the In­dian cul­ture by as­so­ci­at­ing it with fes­tive good­ies and prod­ucts. Fes­tiv­i­ties pro­vide com­pa­nies with a very good op­por­tu­nity to re­con­nect with their cur­rent and prospec­tive clients or cus­tomers. Com­pa­nies, there­fore, plan out ef­fec­tive mar­ket­ing strate­gies dur­ing the fes­ti­vals that will help them make a bet­ter con­nect with cus­tomers or clients. For most re­tail­ers, the fes­tive sea­son can prove to be cru­cial in terms of a make or break sales sea­son. As the fes­tiv­i­ties get un­der way, com­pa­nies also face in­tense com­pe­ti­tion to win sales as con­sumers go bar­gain hunt­ing and seek out the best deals. As such, most re­tail­ers are only too will­ing to roll out huge dis­counts, bun­dled of­fers, free­bies and cash­back to lure shop­pers. Across sec­tors, from food and gro­ceries to ap­parel and life­style, re­tail­ers are ex­pect­ing dou­ble-digit sales growth this fes­tive sea­son.

Go­ing Beyond Of­fers, Dis­counts, Cash­backs…

How­ever, some re­tail­ers like Ajay Dhar, Di­rec­tor of Ncr-based Needs Su­per­mar­ket, feels the hype and hoopla around gift­ing dur­ing the fes­tive sea­son to be slightly over­rated. He says that un­til ten or fif­teen years ago, it was a known fact that Di­wali had the po­ten­tial to dou­ble or triple your sales. But over a pe­riod of time, peo­ple have be­come smarter and more in­tel­li­gent. For in­stance, in a niche mar­ket like Gur­gaon where Needs is present, the gift­ing trend is not too much vis­i­ble dur­ing the fes­ti­val sea­son. “I don’t be­lieve gift­ing is re­stricted to Di­wali fes­tive pe­riod alone. The ten­dency to spend huge amounts of money on gifts on Di­wali has died down. Ear­lier on, there was a clear 30-40% in­crease in sales dur­ing fes­ti­val sea­son. Now, one ob­serves a slim 15% growth in sales. We did see a lit­tle bump in sales around this time last year. How­ever, as a re­tail brand, we don’t de­pend on fes­ti­val sales and don’t fo­cus on pro­mot­ing the same,” says Dhar adding that cus­tomers in his stores catch­ment area are not very price-sen­si­tive but are con­scious of what brands they pick up while shop­ping.

“For the past six or seven years, our cus­tomers in Gur­gaon have shown no in­crease in pur­chase of gift­ing items around Di­wali. So rather than spend­ing on gifts to give to their ex­tended fam­ily and friends, they have cho­sen to spend their money buy­ing gold or in­vest­ing in as­sets for them­selves and their chil­dren. So those big spend­ings on gift ham­pers worth ten thou­sand or five thou­sand bucks

Our in-store cam­paigns in­volve our team of chefs and bak­ers that make pos­si­ble sam­pling ini­tia­tives for new and ex­ist­ing prod­uct lines. We be­lieve in keep­ing spe­cific brands in stock and not fill­ing our shelves with ev­ery­thing in the mar­ket and then at­tempt at sell­ing them in a dis­counted way, dur­ing fes­ti­val sea­son and oth­er­wise. — Ajay Dhar Di­rec­tor, Needs Su­per­mar­ket

have come down dras­ti­cally. As far as com­pa­nies are con­cerned, most of them have pared down their bud­get for gift­ing and it is now re­stricted to only se­lect clients now. Since Gur­gaon has a nu­clear mar­ket, gifts dur­ing this time are lim­ited to very close friends and fam­ily. A life­time ago, Di­wali used to be syn­ony­mous with meet­ing a 100 peo­ple. Nowa­days, that num­ber is re­stricted to ten or maybe twenty peo­ple. Our brand sees more traf­fic dur­ing the Christ­mas sea­son and we do a num­ber of au­then­tic plum cakes for which soaked in­gre­di­ent prepa­ra­tions have al­ready started,” re­veals Dhar.

To make the most of the fes­tive pe­riod, Needs Su­per­mar­ket will mainly fo­cus on in-store mar­ket­ing. As most of its cus­tomers are reg­u­lars, Needs Su­per­mar­ket runs an ef­fec­tive loy­alty pro­gram that gives it a wide enough au­di­ence base. It won’t ad­ver­tise ag­gres­sively dur­ing the fes­tive sea­son be­cause it wants to give that sort of money back to the cus­tomer rather than spend­ing it on mar­ket­ing cam­paigns out­side the store. “Our in­store cam­paigns in­volve our team of chefs and bak­ers that make pos­si­ble sam­pling ini­tia­tives for new and ex­ist­ing prod­uct lines. We be­lieve in keep­ing spe­cific brands in stock and not fill­ing our shelves with ev­ery­thing in the mar­ket and then at­tempt at sell­ing them in a dis­counted way, dur­ing fes­ti­val sea­son and oth­er­wise,” says Dhar.

But by and large, peo­ple are gen­er­ally in­ter­ested to buy new things dur­ing the fes­tive sea­son, and brands and re­tail­ers tar­get this propen­sity of cus­tomers to in­tro­duce some very at­trac­tive of­fers. This is done mostly in the form of dis­counts, free sam­ples, buy-one get one free of­fer, dis­count on sec­ond pur­chase and so on. Re­tail­ers can launch ‘Di­wali Spe­cial’ by in­tro­duc­ing some com­bos and pack­ages, etc. It de­pends on prod­ucts and their unique idea that cre­ates the dif­fer­ence. Re­tail an­a­lysts point out that con­sumers have im­por­tant pri­or­i­ties and var­i­ous con­sid­er­a­tions when it comes to fes­tive shop­ping for gifts and other prod­ucts for Puja cel­e­bra­tions and Di­wali. Among the big­gest “very im­por­tant” con­sid­er­a­tion is “Find­ing the best sales and dis­counts”, “Shop­ping where it’s most con­ve­nient”, “Shop­ping where I can get the best cus­tomer ser­vice” and “Shop­ping where I can find the ‘hot’ prod­ucts of the sea­son”. As in the pre­vi­ous years, the most im­por­tant fac­tor when shop­ping this fes­tive sea­son is sales or price dis­counts but cus­tomer ser­vice and qual­ity of mer­chan­dise con­tinue to be vi­tal com­po­nents in con­sumers’ de­ci­sion mak­ing pro­cesses, high­light­ing the grow­ing im­por­tance of value when it comes to gift and fes­tive shop­ping.

Re­tail­ers like Kipps Mart are look­ing to keep its reg­u­lar cus­tomers happy by giv­ing them ad­di­tional ben­e­fits and thank-you gifts. At the same time, it also wants to draw in new cus­tomers to the store. “We re­cently launched a bunch of dis­counted of­fers such as prod­ucts at Rs. 999, 10% off on bills above Rs. 3,000 and other of­fers. Th­ese schemes were also ad­ver­tised well. How­ever, we saw that most of our loyal cus­tomers didn’t pay heed to th­ese and didn’t ask for the dis­counts we were of­fer­ing. I feel that spe­cialty stores like Kipps don’t func­tion on dis­counted of­fers as we are more prod­uct and qual­ity-ori­ented as com­pared to other value-ori­ented brands. We are more pop­u­lar for the va­ri­ety of prod­ucts at our store and their high qual­ity rather than our dis­counts. Good cus­tomer ser­vice is of top pri­or­ity to us and we aim at pleas­ing our cus­tomers. This sea­son we are plan­ning on hand­ing out small to­kens and gifts such as money plants and in­door bam­boo plants,” dis­closes Arora.

The in­sights al­low mul­ti­chan­nel re­tail­ers to re­fine their mar­ket­ing, mer­chan­dis­ing and pro­mo­tions strate­gies to ef­fec­tively reach fes­tive shop­pers. Re­tail­ers that are in tune with the mind­set of their shop­pers are poised to achieve the strong­est re­sults dur­ing the fes­tive shop­ping sea­son. The in­sights also help to in­form re­tail­ers in driv­ing greater re­sults and en­hance their prof­itabil­ity. So even though re­tail­ers are ex­pe­ri­enc­ing mo­men­tum as the fes­tive sea­son ap­proaches, it is crit­i­cal to en­gage cus­tomers with rel­e­vant of­fers and com­pelling shop­ping ex­pe­ri­ences to en­tice them to make a trans­ac­tion. One-toone mar­ket­ing, seg­men­ta­tion, so­phis­ti­cated email pro­mo­tions and new av­enues of reach­ing shop­pers such as so­cial sites and smart­phones will draw shop­pers to re­tail sites. The most com­pelling on-site ex­pe­ri­ences will then con­vert browsers into buy­ers, and will de­liver op­ti­mal re­sults this sea­son.

Peo­ple are gen­er­ally in­ter­ested to buy new things dur­ing the fes­tive sea­son, and brands and re­tail­ers tar­get this propen­sity of cus­tomers to in­tro­duce some very at­trac­tive of­fers. This is done mostly in the form of dis­counts, free sam­ples, buy­one get one free of­fer, dis­count on sec­ond pur­chase and so on.

Lever­ag­ing the In­ter­net and So­cial Me­dia Plat­forms

As the In­ter­net quickly be­comes a des­ti­na­tion for time-strapped shop­pers, more peo­ple will seek out re­tail­ers’ hol­i­day deals on the In­ter­net this year and nearly half of them will buy on­line. Ad­di­tion­ally, the av­er­age hol­i­day shop­per plans to do some part of their shop­ping on­line, whether they’re com­par­ing prices, re­search­ing prod­ucts or ac­tu­ally mak­ing a pur­chase. On­line shop­pers plan to spend more as well; the av­er­age per­son who will shop on­line this hol­i­day sea­son will spend more than those con­sumers who only plan to shop in stores. Adults age 25 to 34, many of whom have small chil­dren and crave con­ve­nience, will com­plete a sig­nif­i­cant per cent of their hol­i­day shop­ping on­line, the most of any age group. Nearly four in 10 shop­pers to­day cite con­ve­nience as the pri­mary rea­son for pre­fer­ring to shop on­line and this trend is ex­pected to gather mo­men­tum dur­ing the rush fes­tive sea­son when the de­sire to fight crowds in the stores and the cu­rios­ity to com­pare prices will be at its peak.

Some time ago, Re­tail­ers As­so­ci­a­tion of In­dia (RAI) com­mis­sioned a cus­tomer sen­ti­ment in­dex for the fes­tive sea­son. Of the 50, 000 In­dian con­sumers sur­veyed in the cus­tomer sen­ti­ment in­dex, 86% re­spon­dents said they looked for­ward to shop­ping dur­ing the fes­tive sea­son. Among the re­spon­dents, 57% have said they will shop on­line whereas 49% pre­ferred malls to shop for the fes­tive sea­son. Also, 61% re­spon­dents said they would make their buy­ing de­ci­sion based on avail­able in­for­ma­tion on so­cial me­dia, whereas 57% said they would make their pur­chase de­ci­sion from dif­fer­ent dis­count an­nounce­ments made by com­pa­nies. What is im­por­tant is that in­creas­ingly shop­pers want to shop at their fa­vorite stores, when­ever they want and how­ever they want and re­tail­ers have to de­cide how they are go­ing to re­spond to this de­mand.

As per es­ti­mates, more than 50 per cent of all fes­tive pur­chases in the up­com­ing sea­son would be in­flu­enced by dig­i­tal en­gage­ment and in­ter­ac­tions. Un­der­stand­ing the im­por­tance and util­ity of the dig­i­tal tool is there­fore para­mount to the suc­cess of brands and re­tail­ers.

As e-com­merce growth rate is much higher than the over­all rate of growth for re­tail sales, brands and re­tail­ers will have to drive rapid adop­tion and us­age of dig­i­tal shop­ping tools. Ac­cord­ing to one re­cent re­search sur­vey, 73% per cent of mo­bile de­vice own­ers plan to use their de­vices for fes­tive shop­ping. And 84 per cent of shop­pers use dig­i­tal tools be­fore and dur­ing their trips to stores. As per es­ti­mates, more than 50 per cent of all fes­tive pur­chases in the up­com­ing sea­son would be in­flu­enced by dig­i­tal en­gage­ment and in­ter­ac­tions. Un­der­stand­ing the im­por­tance and util­ity of the dig­i­tal tool is there­fore para­mount to the suc­cess of brands and re­tail­ers.

Time-starved shop­pers fac­ing be­wil­der­ing num­bers of prod­uct op­tions rely on dig­i­tal to help them make choices. One of the most used in-store apps is Ama­zon, but not for the rea­son one com­monly thinks – 90 per cent of Ama­zon. com vis­i­tors could be pur­chas­ing else­where. Yes, shop­pers are price com­par­ing but rat­ing and re­views are piv­otal – re­search demon­strates that prod­ucts with an av­er­age 3+ star rat­ing are 45 times as likely to be pur­chased as those with­out. Ama­zon is also in­flu­en­tial in an­other util­i­tar­ian de­vel­op­ment – vis­ual search – set­ting a new be­hav­ior in mo­tion, one that is bound to fur­ther grow in com­ing years. Then, there is also the as­pect of the dig­i­tal wal­let. Not only do dig­i­tal pay­ment so­lu­tions push cus­tomers through check­outs faster, but they also can in­crease cus­tomers’ con­fi­dence in the buy­ing ex­pe­ri­ence. It’s un­likely that shop­pers will use mul­ti­ple for­mats, so which one will win out? It is quite likely that the one that of­fers the great­est sim­plic­ity in trans­act­ing will at­tract the big­gest num­bers.

Given the fact that con­sumers are eager to hit the Web this fes­tive sea­son, re­tail­ers and brands have their task cut out. The pri­or­ity will be prep­ping and op­ti­miz­ing their sites, be­gin­ning their mar­ket­ing and pro­mo­tions early, and plan­ning plenty of in­cen­tives and of­fers aimed at pro­vide value and con­ve­nience for their shop­pers. They will also need to lever­age their so­cial me­dia and mo­bile plat­forms for savvy shop­pers on the go, know­ing how im­por­tant cus­tomer re­views and com­par­i­son shop­ping ap­pli­ca­tions are to hol­i­day shop­pers. When it comes to re­tail­ers’ fes­tive sea­son on­line pri­or­i­ties, many have al­ready in­vested in new tech­nolo­gies and site and ser­vice fea­tures. Plans are un­der way to sig­nif­i­cantly in­vest in mo­bile-op­ti­mized web­sites and also in­vest in tablet de­vice apps. Ad­di­tion­ally, some are plan­ning to sig­nif­i­cantly in­vest in QR codes in off­line ad­ver­tis­ing, such as mag­a­zine ads and bill­boards. Of those who reg­u­larly use so­cial me­dia plat­forms, a sig­nif­i­cant ma­jor­ity say they have al­ready in­vested in Face­book and Twit­ter ac­counts.

Apart from in­vest­ing in tech­nol­ogy and dig­i­tal plat­forms, com­pa­nies will also need into look into

With the right dig­i­tal tools and tech­nol­ogy, re­tail­ers are in a po­si­tion to ex­po­nen­tially in­crease their po­ten­tial to serve the right mes­sage to the right shop­per in the right place at ex­actly the right time.

the con­cerns of dig­i­tal se­cu­rity and sat­u­ra­tion. Shop­pers are start­ing to re­think how they shop given the re­cent breaches of per­sonal data…. Ul­ti­mately, con­sumer pa­tience will wear thin and re­tail­ers that fail to pre­vent and proac­tively ad­dress se­cu­rity breaches will risk the loss of sub­stan­tial brand trust as con­sumers look to shop else­where. The re­al­ity is, con­sumers and re­tail­ers need to be more vig­i­lant with their data. Sat­u­ra­tion is the other sleeper trend to watch. With dig­i­tal ad­ver­tis­ing ex­pen­di­ture con­stantly on the rise, con­sider that the cost per ‘000 can be as low as 1 per cent of tra­di­tional TV – or put an­other way for the same ex­pen­di­ture one can de­liver 100 times as much ad­ver­tis­ing. So ex­pect more dig­i­tal ads, which is set to grow 30 per cent in In­dia this year, ac­cord­ing to me­dia agency Groupm es­ti­mates. With the right dig­i­tal tools and tech­nol­ogy, re­tail­ers are in a po­si­tion to ex­po­nen­tially in­crease their po­ten­tial to serve the right mes­sage to the right shop­per in the right place at ex­actly the right time. Get it right and the shop­per will value the brand and re­tailer for un­der­stand­ing them and their needs. Get it wrong and cross the line from in­ter­rup­tion to in­tru­sion and shop­pers will block you out of their dig­i­tal eco-sys­tem as fast as you can say “spam.” So, the con­clu­sion that em­braces all th­ese trends is value – pro­vide real util­ity that is valu­able to the shop­per, demon­strate your value by be­ing an ac­tive part of their ev­ery­day lives, value their pri­vacy, and value their time and at­ten­tion.

In or­der to main­tain their bud­gets, more shop­pers are ex­pected to use the In­ter­net to con­duct re­search on prod­ucts and pric­ing be­fore mak­ing pur­chases. With the grow­ing pro­lif­er­a­tion of smart­phones and avail­abil­ity of In­ter­net, con­sumers will most prob­a­bly con­duct on­line re­search in ad­vance to find the best deals. As con­sumers to­day are well in­formed and ed­u­cated, brands and re­tail­ers will do well to keep in mind the afore-men­tioned pri­or­i­ties. A hol­i­day-shop­ping study notes that con­sumers’ “new habits are now firmly en­trenched . . . . They are cau­tiously writ­ing their lists, check­ing them twice, and only spend­ing if they deem the value is right.” With cus­tomers now more fo­cused than ever on value and metic­u­lously cal­cu­lat­ing the best ways to stretch their wal­let, re­tail­ers will need to en­tice shop­pers with pro­mo­tions that go beyond dis­counts, whether

In or­der to main­tain their bud­gets, more shop­pers are ex­pected to use the In­ter­net to con­duct re­search on prod­ucts and pric­ing be­fore mak­ing pur­chases.

they’re pro­mot­ing free gifts with pur­chase, an ex­tended war­ranty, or stel­lar cus­tomer ser­vice.

Ac­cord­ing to a re­cently pub­lished re­port by re­search firm Red Seer Con­sult­ing on on­line fes­tive shop­ping this sea­son, top on­line re­tail firms led by Flip­kart and Ama­zon are ex­pected to gen­er­ate as much as $3 bil­lion of sales dur­ing their spe­cial five-day fes­tive sea­son sales next month. The gross mer­chan­dise value (GMV) gen­er­ated in In­dia’s e-com­merce busi­ness dur­ing Di­wali may touch $2.5-3 bil­lion this year, ac­cord­ing to the re­port. This would im­ply that sales dur­ing this fes­tive sea­son would ef­fec­tively dou­ble from last year. E-com­merce firms typ­i­cally gen­er­ate a ma­jor­ity of their an­nual sales in the fes­ti­val-filled Di­wali quar­ter when cus­tomers spend on a host of prod­ucts.

Like their on­line coun­ter­parts, off­line re­tail­ers will also need to read­just their strate­gies to re­flect the com­ing re­tail en­vi­ron­ment and con­sumer pur­chas­ing power. Even in stores, dig­i­tal looms large as con­sumers use smart­phones to com­pare prices and read prod­uct re­views be­fore mak­ing in­store pur­chases. Stores can re­duce their ex­po­sure to neg­a­tive con­sumer spend­ing fac­tors by re­ex­am­in­ing in­ven­tory com­mit­ment, fo­cus­ing on in-store pro­mo­tional plans, and of­fer­ing cre­ative pur­chas­ing op­tions or as­so­ci­ated value added ser­vices. One ad­van­tage stores have over e-com­merce is brickand-mor­tar of­fers the chance for con­sumers to get that fes­tive cheer feel­ing. There is a so­cial as­pect to shop­ping. Go in there and you feel that hol­i­day cheer. That’s what the re­tail­ers can do.

Re­tail­ers must also put spe­cial em­pha­sis on max­i­miz­ing their con­ver­sion rate. It will be crit­i­cal for re­tail­ers to care­fully man­age their tal­ent and align their sea­sonal hir­ing plans and train­ing to en­sure a high level of cus­tomer ser­vice. Th­ese as­pects as­sume greater sig­nif­i­cance in light of the fact that con­sumers will in­creas­ingly shop and buy both on­line and in-store this fes­tive sea­son. Many re­tail­ers have plans to keep con­sumers in­formed of their in-store of­fers through the use of so­cial me­dia in the hopes of in­te­grat­ing their dig­i­tal and in­store pro­mo­tions, work­ing to cre­ate that seam­less shop­ping ex­pe­ri­ence that they know con­sumers de­mand and ex­pect.

Re­tail­ers and brands should ex­pect two key themes for the hol­i­day sea­son: tim­ing and tar­get­ing. They need to be ahead of the curve in terms of trend in­for­ma­tion, pre­dic­tive bench­mark data and an­a­lyt­i­cal in­sight from across the mar­ket­ing land­scape. That is nec­es­sary in giv­ing mar­keters a more ac­cu­rate and com­plete un­der­stand­ing of how con­sumers re­spond to fes­tive of­fers and when they be­gin think­ing about their fes­tive shop­ping. Chan­nels such as e-mail, mo­bile, search, di­rect mail and so­cial me­dia should be care­fully an­a­lyzed so as to pro­vide in­sights on the mul­ti­chan­nel at­ti­tudes and be­hav­iors of con­sumers. To make their mar­ket­ing in­vest­ment count, com­pa­nies must en­sure that their cam­paigns are af­ford­able, ex­e­cutable, mea­sur­able and ef­fec­tive. Seg­men­ta­tion sys­tems will be key to sort­ing and mak­ing sense of the myr­iad of con­sumer data needed to un­der­stand buy­ers and their be­hav­iors. By lever­ag­ing the data and best prac­tices, mar­keters can bet­ter align of­fers to their cus­tomers and en­gage them more ef­fec­tively.

Many re­tail­ers have plans to keep con­sumers in­formed of their in-store of­fers through the use of so­cial me­dia in the hopes of in­te­grat­ing their dig­i­tal and in-store pro­mo­tions, work­ing to cre­ate that seam­less shop­ping ex­pe­ri­ence that they know con­sumers de­mand and ex­pect.

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