The excitement around end-of-season-sale (EOSS) seems to be fading away, what with retailers offering almost year-long discounts to clear stocks. Demand has been lacklustre during this monsoon season, with almost no growth in sales compared to last year. Frequent discounts have washed away the attraction of EOSS, rue industry experts.
In earlier years, customers used to wait for EOSS to shop branded outfits at huge discounts. The trend has changed in the past couple of years with many online and offline retailers offering attractive discounts all year round, which has impacted the frequency of purchases during EOSS. Ashish Dikshit, managing director, Aditya Birla Fashion and Retail, said their end-of-season-sale that started two weeks in advance this year has remained a no-show. “Market conditions are subdued and demand remains sluggish. We started our EOSS in the first week of June this year, but going forward we are trying to reduce the sale period to improve our margins,” Dikshit said.
A senior official from Lifestyle, refusing to be identified, said discounts this year are similar to last year’s, but sales have remained flat.
This is mainly because contrary to earlier end-of-season-sale, retailers and brands now offer a mid-season sale. Moreover, brands try to give some innovative offers along with purchases almost every weekend. Anil Talreja, partner, Deloitte, said usually retailers and brands witnessed sales growth of 15%- 20% during end-of-season sales.
“But in the past couple of years, with online players getting aggressive, the scenario has changed, leaving retailers seeing no spurt in sales during EOSS,” he said.
But brands are not to blame. Competition forces them to offer aggressive discounting for most of the year, which is going to continue. “Companies are trying to mitigate the impact on margins by cost-cutting measures and driving volumes to partially offset it,” said Pinaki Ranjan Mishra, partner, Ernst & Young.
Marks & Spencers, Pantaloons, Louis Philippe, Aldo, Vero Moda, Hennes & Mauritz (H&M), Only, Globus, Benetton, Lifestyle and Shoppers Stop, along with online fashion portals like Myntra, Jabong Amazon Fashion, are currently offering discounts ranging between 40% and 60% on their merchandise.
Kavindra Mishra, chief executive officer and managing director, Pepe Jeans, agreed that customer fatigue has kicked in due to year-long sales. “We have also witnessed flat sale season this year. However, our new merchandise is selling well,” Mishra said.
It all started with retailers trying to attract customers to showcase their fresh stock while getting rid of old stock by offering mid-season sales. Shashwat Goenka, sector head, Spencer’s Retail, added, “It works well for both retailers and customers, as retailers are able to liquidate stocks faster and get customers to walk into the store, resulting in sale of fresh merchandise as well. It’s a win-win for both brands and customers.” This worked initially, but now customer fatigue has settled in.
Online retailers are in the same boat. As per a Jefferies report, online retailers got aggressive in July this year compared to June, running sales apart from end-of-season ones, like Prime Day by Amazon. Both Amazon and Flipkart declined to comment on the story.
Source: Financial Express