PRIMING UP FOR HIGH OCTANE FESTIVE SALES
NEW PRODUCTS, SPECIAL FESTIVE RANGES, GIFT PACKS AND INNOVATIVE OFFERS FOR CUSTOMERS
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.