The festive season is round the corner and both Indian retailers and consumer brands are leaving no stone unturned to hit the right note with the consumers, who will be loosening their purse strings to the fullest in the coming months. Be it upping the advertising spends, bringing out newer promotions, or laying out festive special spread, the efforts seem to be many.
Also luxury brands and fashion designers from Hermes and John Lobb to Ritu Kumar and Rajesh Pratap Singh are increasingly betting on India-specific mobile applications to appeal and engage affluent fashion-conscious consumers in the country.
Retailers up their ad spends to lure consumers
The upcoming festive months will see Indian retailers spending over Rs. 2,000 crore on advertising, marketing and promotions, which will be a five-year record, and a sharp contrast to the pessimism of the past few years. The heaviest ad spending will be concentrated in the Onam to Diwali (September–October) period. E-commerce companies such as Flipkart and Amazon will be major spenders during this time. So will be big companies selling everything from smartphones and clothes to flat screen TVs, feature-rich refrigerators, and cars and cosmetics. The big spenders, apart from the above two e-commerce giants, will be Sony, Samsung, LG, Amazon, Reliance Retail and many others. Industry experts attribute the sharp hike to change in sentiments following the change in government, an uptick in macroeconomic data and a general sense among business that things are going to get better. Japanese major Sony will increase spend to Rs. 200 crore this season compared to Rs. 130 crore last year. The company feels that even concerns over a bad monsoon are fading away, so it will be a cracker festive season this year. Industry watchers feel that sentiments have changed with the change of government. Certain sectors such as e-commerce companies will increase their spends by at least 40–50 per cent this festive season because from chocolate to automobiles to homes they now sell everything. Overall, advertising spends this festive season will be at least 15–20 per cent higher than last year; the growth last year was in single digits. As per industry estimates, consumer electronics market leader Samsung is expected to increase ad spend by more than 30 per cent to over Rs. 300 crore. The company will run localised promotions this year. Panasonic too is spending Rs. 85 crore, its highest ever in India, while homegrown Videocon will spend over Rs. 150 crore. The festive season traditionally accounts for 40–45 per cent of consumer durables sales. However, the past four years have seen growth flattening in the appliances category and just 10–15 per cent growth in flat-screen televisions. Sales started reviving from April–May, making companies optimistic of a turnaround.But the real big spenders will be the newest kids on the block – e-commerce companies. Media planners say Amazon and Flipkart are expected to spend Rs. 50–60 crore each on advertising, including creative and media. Other new-economy players such as Infibeam and Shopclues will double their spending during the festive season. The former is expected to spend almost Rs. 25 crore; 60 per cent on digital marketing and the balance on print and TV campaigns. Brick-and-mortar retailers too will not lag behind in the race. “In absolute terms, ad spends will be highest ever during Diwali as we have more brands to promote compared with last year. It should be roughly 8–9 per cent of the total sales,” said J Suresh, managing director of the Rs. 1,800-crore Arvind Lifestyle Brands, in a media report. Arvind sells more than 28 owned or licensed fashion brands, including Calvin Klein, Nautica and US Polo Association. Leading durables retailer Croma is planning to advance its festive campaign by a few days. “The three-day sale during the Independence Day week that went really well is a classic indication of how the festive season could pan out,” said Ajit Joshi, MD & CEO, Infiniti Retail, which owns Croma. Apparel majors on a growth trajectory
Apparel majors seem to be on an expansion spree, as seen from the various tie-ups they are forming with global brands. Arvind Ltd. is on the forefront with the company’s subsidiary Arvind Lifestyle entering into agreement with [check]to open 50 stores of GAP, a US-based clothing company, in India. Arvind is one of the major suppliers of GAP in India. It has over 1,000 retail outlets, which also sell labels such as Nautica and Tommy Hilfiger among others.Gap Inc. sells brands such as Banana Republic, Old Navy and Piperlime, in its company-owned stores and other franchise stores across the world. In the quarter ended June 2014, Arvind reported a strong 34 per cent rise in net profit to reach Rs. 90.51 crore and 17 per cent growth in net sales to Rs. 1,754.30. In another development, Arvind Lifestyle entered into a franchise agreement with North America based The Children’s Place. Arvind Lifestyle is expected to open 50 stores over time beginning in the fall of 2015.Again retail chain Pantaloons Fashion & Retail Ltd. will invest Rs. 150 crore this fiscal to add up to 20 stores in its portfolio. In an investor’s update, Pantaloons’ parent company Aditya Birla Nuvo said: ‘Full year capex (capital expenditure) guidance (for Pantaloons) stands at Rs. 150 crore towards addition of 18–20 new stores for each 100 stores mark.’ The company added that the investment will also be utilised in refurbishing 21 stores through infrastructure and assortment upgrade. Last month, Pantaloons said it plans to raise up to Rs. 500 crore through various means, including a rights issue this year to fund its growth capital requirements. Out of the aggregate amount of Rs. 500 crore, up to Rs. 300 crore is proposed to be raised through the rights issue. Its Board has constituted a committee of directors to decide and approve the terms and conditions of the rights issue, including the rights entitlement ratio, issue price, record date, and timing of the rights issue. Pantaloons for the quarter ended June 30, reported revenue of Rs. 386 crore. At present, Pantaloons has 83 stores operating in the country. In 2012, Aditya Birla Nuvo Ltd. had entered into an agreement with the Future Group to infuse Rs. 1,600 crore into Pantaloons and acquire a majority stake in the store chain.
Also Peter England, the largest menswear brand in semi-premium category, will be launching 100 more exclusive stores this fiscal to help fuel the targeted 20 per cent volume growth. “Our last fiscal performance was quite robust. We grew by almost 25 per cent, which is much ahead of the market and helped the brand cross the Rs. 1,000-crore turnover mark for the first time,” the company’s Chief Operating Officer Kedar Apshankar said in a news report. This year, the brand from Madura Garments should be able to grow at least by 20 per cent over the past fiscal, Apshankar added. The company, which sells 10 million garments every year, achieved this figure mostly though sales from existing stores, mostly in smaller towns. The company opens close to 75 exclusive stores last fiscal, taking out total outlets to 650, and by the end of this financial year the company is expected to have at least 750 stores.
Mobile apps to woo Indian luxury consumers
Luxury brands and fashion designers from Hermes and John Lobb to Ritu Kumar and Rajesh Pratap Singh are increasingly betting on India-specific mobile applications to engage, entertain and inform affluent fashion-conscious consumers in the country.
French luxury-goods house Hermes has launched Tie Break, a mobile app for men that offers a break from the harsh realities of office or even a dull date with the pull of a tie, while New York-based fashion house Donna Karan New York is all set to launch its DKNY Cozy, a styling suggestion app for women, in the country.
These apps do not directly push sale, as mostly there are no options for purchase and direct interaction with brand representatives.
Customer engagement is one of the prime reasons why leading brands have turned to mobile apps. These apps, mostly available on iOS and Android, come packed with features like stock checkers, e-coupons, bar code scanners and sales alerts to name a few. Even Michael Kors and Canali will develop India-specific apps for the brands. Mumbai-based Regalia Luxury Retail, the marketing partner of luxury shoemaker John Lobb in the country, is developing an India-specific app for the English handmade shoe brand.
Malls housing luxury labels are also catching up on the initiative. DLF Emporio, a luxury mall in Delhi, will soon launch an app for iPhone and Android devices to provide information on offers, promotions and latest collections of all the brands under its roof. The mall is also figuring out a way to let users connect with the brands when they are in and around the mall using the applications. Shoppers are already excited about connecting better with brands they spend a fortune on. Indigenous brands are also experimenting with the live feel. Designer Ritu Kumar’s app, for instance, has a virtual wardrobe for users to try different clothes on their picture. OCM Suitings, owned by US-based investment firm WL Ross, too, has created a virtual trial room for clients to have a look at available fabrics and styles.