End of season sale, or EOSS, fetches more footfall as well as a different set of new customers along with satiating the purchasing appetite of brands’ existing customer base. Shipra Srivastava spoke to retailers from different verticals to get their perspective on what EOSS means to them.
EOSS definitely brings volume sales and helps retailers increase their topline, but does it impact the bottomline also positively? Does it help a retailer to maintain their brand image? Does prolonged EOSS devaluate the brand equity in the perspective of the consumer? How helpful is EOSS in fetching new customers? And, finally, is e-commerce responsible for prolonged EOSS? There are many questions that surround this aspect of sales. At IMAGES Retail, we try to get an in-depth analysis by breaking the clutter of opinions and assumptions that surrounds the retailer’s decision of going in for EOSS. We spoke with retailers from different verticals of retail to know their logic and rationale behind EOSS.
High inflation has restricted the buying capacities of customers and forced them to wait for EOSS to grab their favourite articles of fashion and other accessories. While EOSS rings in good news for price conscious consumers, it is also a golden opportunity for retailers to clear up their old stock and make room for new arrivals. On one hand, it helps the customers in fetching their desired on discounted rates; on the other, it helps the retailers in increasing their footfall in a short span.
Contrary to what general perception goes, EOSS is not a new practice. In fact, retailers in recent years have extended the sale duration to churn out the revenue. It is 2015, and just that time of the year when both online and offline stores gear up to organise the BIG end of season sale.
During the last season, we saw most of the retailers opening up EOSS in the last week of December and continuing it till the third week of February. This year too, most of the brands announced the sales in December, 2014, and it is likely to continue till the end of February. On the other hand, there are retailers who plan to wind up the sale within a month. This is to ensure a longer shelf for their new arrival, which otherwise gets reduced to three months due to extended sale duration. Akhil Jain, Creative Director, Madame says: “Our sale would end by 31st January.”
However, retail consultants believe that most brands would extend the sale period as they would prefer to clear as much of old stock as possible.Going beyond stock clearance EOSS is not just about making room for fresh arrival; there are many ways in which a retailer can benefit if they play around with the concept of EOSS in the right manner. Most of the brands are in fray to make the best out of EOSS, and they are not restricted only to liquefying the inventory.
Speaking on the same, Sahil Malik, MD, Da Milano says: “During EOSS, our customers get good deals and discounts on articles of their choice. It helps them fetch their desired bags on discounted rates. This way they save money to purchase more products. Da Milano is the fastest moving fashion accessory brand. Every 15 days we have new stock at our boutiques. So, stock clearance is not really applicable in our case. Certainly, there are some slow moving items that do get picked up easily during EOSS with great deals on them.”
“The biggest advantage is that people who cannot afford to buy our range of products, they end up buying our products during sales season,” he adds.
Sharing similar views, Nikhil P. Jain, Operations Manager, Holii Accessories Pvt. Ltd says: “EOSS allows the brand a wider audience and improves the walk-ins in the stores. It gives us an opportunity to welcome our regular customers to enjoy a little more of Holii. Moreover, we acquire new customers, who are looking for a good deal on their fashion purchases.”Holii is planning to end its EOSS by the early week of February this year.
Taking the discussion it further, Dilip Kapur, Founder, Hidesign comments: “EOSS is the time when footfall rises, thus securing much-needed brand mileage. The attractive offers also lure people to try out more designs within different price-brackets, thereby making the consumer have a better and longer brand experience.”
The brand is offering up to 50 per cent off on an extensive range of bags, with maximum discounts put up on women’s handbags.
“We have seen an upsurge in footfall and conversion rate during our present EOSS. We are expecting a footfall increase of 40–45 per cent,” informs Kapur.
Siddharth Bindra, MD, BIBA shares: “EOSS are not just stock clearance; rather, they create an avenue for attracting new consumers. We are able to make many new patrons through the associations which are initiated at such sales.”
The brand expects to end its EOSS by the last week of January.
Shrinking discount limit
This season large fashion brands like ZARA, Forever 21, M&S, Kenneth Cole, Mango, Cielo, Diesel and Lifestyle have announced up to 50 per cent discounts, which is most likely to increase as the season proceeds. However, brands are endeavouring to curb down the discount limit, as they acknowledge the fact that too much discounting is not healthy for them. According to Bindra from BIBA: “Our discount on various categories varies from 10 per cent to 50 per cent. Hence, we offer up to 50 per cent discount, so to say.”
“Discounts are an important and time-tested marketing strategy to increase walk-ins to the store. However, as it holds true for most things in life, brands need to be wary of overdoing. There are ample examples where relying heavily on discounts has diluted the brand identity,” says a spokesperson from Pepe Jeans.
A recent report from Capillary Technologies also highlights that offering higher discounts does not seem to be the right path, as retailers would never gain a loyal customer base. Trying different and unique concepts can help bridge the gap between pre- and post-sales period.
Going with the report findings, Jain from Holii asserts: “People love sale and they eagerly wait for the sale season to begin. But, they are not willing to pick up things just because they have the discount tag on them. Consumers now believe in making smart investments.” Moreover, there are many brands which are offering additional discounts to their loyal customers. “We start our sale with additional discounts exclusively for our loyalty members,” says Sanjay Sahni, MD, Ritu Wears.
Sharing his experience on the same, Malik informs: “We kick-start our sales season with only loyal customers. The first three days are open for sale only for our members. We make them feel special and they are the privileged ones to get have the opportunity to have a first look at the articles on sale.”
Earning strong revenues
The sale period is most crucial in the retail business, as retailers’ revenues plunge during this time. Malik from Da Milano says: “Every year, there is an increase of 15–20 per cent. This time we are excited and optimistic to follow the same trend and even surpass the last season’s EOSS figures.” Similarly, Jain from Madame expects at least an increase of 25 per cent. Holii is hopeful of getting at least 30 per cent like to like sales growth, as informed by Nikhil Jain.“We are expecting a like to like sales growth of 30 per cent,” informs Kapur from Hidesign.
Speaking on similar lines, Prem Dewan, Retail Head – OSL Luxury Collection Pvt. Ltd., Corneliani says: “We are expecting a 15 per cent rise in our sales.” Despite such heavy margins, brands fear that extended or too much discounting will eventually spoil the brand image. In fact, brands are ready to compete with e-commerce market places as well, which are gaining immense popularity for offering heavy discounts round the year.
Sahni from Ritu Wears asserts: “In India, customers are fascinated with the online shopping phenomena and the deals that are offered therein. Despite this, there is a huge chunk of customers who want to experience the traditional way of shopping and who believe in touch, look and feel of the products. Hence, we believe in consistently providing them the best quality merchandise considering the following aspects: fashion brands, fashion basics, fashion trends and forward fashion.” He also feels their bottom lines are not affected even in a scenario of extended EOSS due to the effect of the same.
Staff motivation during EOSS
No doubt, store managers have to deal with extra load of work during EOSS. Brands understand this aspect well and hence, they apply employee-friendly policies to keep their internal staff happy and satisfied. Da Milano, for instance, increases its staff at the store level and even at the operational level to meet the requirements during EOSS. In addition, the staff there is offered lucrative offers and incentives, which makes them happy and keeps them motivated as well.
“Our entire front end staff is on incentive-based structure; it keeps them adequately motivated to service our customers. And, as the footfalls increase considerably during the EOSS period, they are highly motivated to serve the new customers,” says Sohel Kamdar, CEO, Metro Shoes.
“The store staff is given strong incentives during EOSS,” shares a senior official from Pepe Jeans. “Indian Terrain staff understands that the EOSS involves working long hours and catering to hordes of eager customers. As we require them to perform at their best, we keep them highly motivated through incentive plans and sought-after perks,” says Amitabh Suri, Chief Operating Officer, Indian Terrain Fashions.
Clearly, EOSS is a win-win exercise for retailers as well as customers.