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Intelligent sourcing, buying and marketing from a retailer’s perspective

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Product range and assortment are at the heart of the ethos and success of a retail store. As retail evolves in a highly competitive Omnichannel climate with a more empowered consumer, good marketing and a strong product range are the foundations of success.

Intelligent sourcing, buying and marketing from a retailer’s perspective
As retail evolves in a highly competitive Omnichannel climate with a more empowered consumer, good marketing and a strong product range are the foundations of success

A lot has been talked about change in the fashion business and how customers are now digitally empowered. But how is this affecting the buyer today? How are they collaborating with the marketing team? In this article, Images Business of Fashion Bureau explains what’s next and how to make it ready for the Omnichannel climate and rapidly changing consumer trends…

Can online and offline co-exist profitably?

Executive Director – Product and Sourcing, , Atul Bajaj said about his learnings on the online opportunities in the Indian market keeping in mind the marketing and sourcing of Puma: “We treated our online retail space just like any other sales opportunity. However, we soon learned that online retail is a whole new ball game. There was a very steep learning curve, and it became very clear that a different strategy would be needed for marketing and merchandising on the digital platform.”

“A few key lessons have been picked up from that time, the most important one being that visual merchandising is as important in online store, as in brick and mortar stores. There is a range of merchandise available to customers at the single click of a button, and brands must consider the visual impact their layout and interface has, on their online consumers.  The second lesson was that the online and offline do not exist at the cost of each other. Both spaces are complementary to each other. Furthermore, online and offline can co-exist profitably as well. For strong online performance, Bajaj said, strong offline presence is the key. The third lesson is something that online retailers need to pay particular attention to – the online retail space is not a bargain counter. The sole aim of the online space should be to maximise full price sales,” Bajaj added.

He also pointed out that the difference between online and offline consumers lay mainly in behaviour rather than in consumers themselves. “There are a plethora of reasons underpinning a customer’s decision to buy online or offline. For example, a customer normally finds a greater width of products online. However, when a customer is buying a new technology, he generally wants to check out the product physically, which can’t be achieved online, yet. For this purpose, the customer will always visit a brick and mortar store. In addition to this, offline shopping is also about instant gratification. Therefore, consumers must be understood as individuals with purchasing behaviours that vary with the mode of retail,” he stated.

Companies today adapt to globalization, not Westernization. With a huge number of brands coming into India, consumers are becoming hyper aware of styles and trends.

However, international trends take an average of two seasons to trickle into the Indian market. Additionally, men are slower in catching up to international trends as compared to women. This is because they are not as experimental as women.

“The development in the men’s wear market is slow, but steady. This is also visible in the change in male consumer patterns. Men are definitely getting more fashionable, as indicated by the rate of sales and best seller statistics. The uptake is very fast,” said VP & Head – Menswear, , Dheeraj Chawla.

Atul Bajaj added, “In the last two-three years, Tier-II and Tier-III cities have witnessed a drastic change in men’s consumerism. People are open for bolder options now. I can’t comment globally, but in India, there is a definite shift in how people are reacting to new designs.”

“The lines today are blurring. A lot of cross selling is happening as seasons pass by. Casuals are becoming smarter, formals are becoming more comfortable and so on. There is a refreshing change and people are now experimenting,” Deepak Chawla further added.

Shift in Purchasing Patterns

Chief – Lifestyle Merchandising, – Pantaloons, explained why her company was looking to reconsider and re-look their merchandising mix.

“While there is no significant difference in the kind of products being purchased online and from stores, just that online is able to better mine data and get fresh insights into consumer behaviour patterns. For example, customers from interior towns seem to have a bolder taste in product choices than one would conventionally expect. These customers purchase fashion forward products online,” she said.

Srivastava attributed this shift in purchasing patterns to increasing awareness among consumers. “At the click of a button, consumers are bombarded with so much choice of fashion now. The online space has catalyzed trend awareness bringing in styles much faster than it did before,” she said.

, primarily a designer portal with merchandise belonging to the forefront of trends works on a model that’s slightly different from other shopping portals. In terms of merchandising, pays particular attention to consumers’ desires and requirements, which are then relayed back to the designers.

Head, Business Development and Merchandising of the company, pointed out that one of the most popular segments on Exclusively.com is ethnic wear and occasion wear.

“Servicing 150+ countries and a lot of global consumers, event-based sales tend to rule the roost for Exclusively.com,” he said.

Collaboration Between Buying, Marketing & Design Teams

Buying, marketing and design teams must ensure that they communicate with and are involved with one another.

“For example, at the ITC Lifestyle Retailing Business, the marketing team is a core part of the buying and range selecting process. They are privy to what is being bought and why, and there is healthy dialogue between the two teams to decide what will be communicated to the consumers. This minimises any room for errors. Even after collection launch, when communications are to be refreshed mid-season, there is joint direction between all teams. In addition to this, there is also a major use of backwards communication. The marketing team often uses their own research agencies to detect what is working and what isn’t among the styles and trends, and this data is given back to the buying teams, who apply it to their decision-making processes,” said GM Buying, Merchandising & Sourcing, ITC Lifestyle Retailing Business, .

Geetika Srivastava elaborated on the dynamics and the extent of her marketing team’s involvement in range development. She said that the starting point is the design team. Once the design team hones in on a trend along with the merchandising team, they sit and design a marketing plan. Communications and the story that they want to convey is finalised upon, after which they get started with creating a line of generous width to offer to the consumer.

The Growth of the Indian Accessories Market

Consumers are no longer buying just products, but rather, entire experiences. Stores are transforming into entertainment centres, ensuring customer engagement and in all this change, accessories are all poised to become the next big thing amongst consumers who are noticing the transformative abilities of accessories.

“Social media will play a tremendous role in the growth of accessories. Often, designers promote their products on social media, crossing national borders and reaching international consumers quicker than any form of non-digital communication would have permitted. Therefore, Indian consumers are adapting trends very quickly and are becoming more aware as well. Additionally, the consumer is hungry for products catering to their specific needs. Retailers must take note of this and get the required products into their stores as soon as possible,” said Category Head – Fashion Accessories, , .

The Relationship Between E-commerce & Brick-and-Mortar Retail

No one format is better than the other, but they are complementary to each other. A strong physical presence strengthens online performance and online can help brick and mortar with data mining. In a brick-and-mortar store, one cannot keep track of consumers and record his behaviour. Brands don’t know which other brands consumers have visited or considered, what products they have browsed through and which products have been rejected or accepted. Such information is integral in optimizing customer experiences.

In online, however, every move of the customer is monitored. From what products are considered, the time taken to make a decision about the product, feelings about the price points, there are all kinds of conclusions that can be deduced and drawn.

“Though consumers behave differently online and in brick and mortar stores, this information can be used to understand the individual consumer as a whole, augmenting his entire experience. Retailers need to remember that the concept of pure space, as in purely online retail or purely brick and mortar, will cease to exist. The two not only co-exist but also will heavily feed off each other,” said Managing Director and Founder, , .

On the differences between retail stores in India and Germany, Koth said that one major distinction was footfalls. He observed that Indian footfalls are significantly higher than footfalls in European countries. Interestingly, India’s high footfall is concentrated in the malls, but not within the stores. Retailers are not able to convert the footfalls in front of the store into footfalls within the store. “This is curious, especially since services and staff are always available in Indian stores, but rare to find in European stores,” he said.

Analytical Tools Replacing Instinct

Dheeraj Chawla said that in the fashion industry, a combination of both analytics and intuition is needed to survive. “Numbers and analytics only give a one-sided story. When you see the evolution of trends and how they trickle in, how they are interpreted, that is where intuition kicks in. There are tools that already exist in the market, but it all connects back to what you think is right for your business. It’s about what works for you,” he said.

“Tools or computers cannot take over fashion. Applying one formula to one region doesn’t work, and it is here where intuition comes in. Pantaloons follows ‘Many India Merchandise’ whereby different regions are targeted with different merchandise, keeping in mind the different characteristics,” added Geetika Srivatsava.

Atul Bajaj said that while a predictive or analytical tool cannot replace instinct, the two do go hand in hand. One must remember that fashion can be and is often created. This will always be done by humans. Predicting whether the creations will appeal to broader sensibilities can be partially done by technology.

AUTHORED BY:

Rajan Verma: Images Business of Fashion

Amrutha Madhusudanan & Priyanka Kabra: Pearl Academy, Mumbai

Kavina Mehta & Shinjini Saha: Nift, Mumbai