“Attractive and heavy discounts and offers are no longer the top factors that draw the evolving Indian consumer into online and offline purchase as social media influencers and rising preferences for quicker turnaround of new products have redefined the purchase decision,” remarked Amar Nagaram, Head, Myntra & Jabong while observing the radical changes in the Indian fashion retail scene at the 20th India Fashion Forum (IFF) held in Bengaluru.
The two-day conference got together the key decision makers, top heads and professionals from across the fashion retail business in the country to reveal what presently works with shoppers.
“Price and discounts are no longer the primary differentiators that help people decide their buying. There is a change in the behavioural pattern with buyers taking to a particular style and price becoming secondary. Unlike the past few years when people chose a lesser priced unbranded product over a slightly more expensive branded product, today people are willing to choose a product that is priced slightly higher if the style appealed to them. The reason for this is due to the increasing disposable income and growth in the middle class segment, besides the rapidly evolving buyer base in Tier 2 and 3 cities,” he said.
Attributing the popularity and reach of the portal among online shoppers to its heavy investment into technology, Amar added, “This industry requires disruptive technology to reach the next level, investment into technology is imperative for brands to understand and promptly cater to the needs of the buyer, particularly the millennials and Gen Z lot who are the key driving forces of the growing online shopping segment. Millennials and Gen Z spend more time on their mobile phones even in the physical world and are now seen visiting physical retail shops and comparing the prices in the app while at the shops.”
The other major development in the brand sales strategy is the switch to influencers for promoting their products. Online sales spike has been observed in least expected avenues on digital platforms such as influencers and social media opinion leaders who are the most consumed content today. Today, people are more receptive to stories told by influencers than models or advertisements. This trend now pushes brands to use data to put the experience in a way that is more consumable by the user.
“Influencers were the reason why we came up with the concept of ‘Myntra Fashion Superstar’. The 30-second format of an advertisement is long gone. We don’t have a structured platform like China has for influencers. Gone are the days when the entire region used to look alike. Today, people want to be noticed and appreciated. The needs of fashion are changing based on the occasion, time and the place the user is in. In the last six months, our campaign stories were not about discounts, price slashes. Our most converted campaign recently has been the ‘House of Pataudi’ campaign which introduced the love story element in regional languages.”
Some of the other key topics presented and deliberated upon at the conference today were on growth projections, innovation, digitization, omnichannel strategy, augmented reality (AR) and virtual reality (VR).
The organised segment in this business has a lot of potential to tap with user behaviour data and technology. Rajat Wahi, Partner, Deloitte India, noted that nearly a quarter of the total apparel market in India is constituted by the organised segment which includes a minor 2 percent share of e-commerce as well. “There will be an increasing share of women wear in the market and faster growth of value fashion and private labels.”
The discussion pointed at real estate as another big game-changer in fashion retail. Limited physical space and real estate shifts, AR and VR are transforming various business processes in the form of ease of payments, product information, etc. Features like low inventory levels with faster turnaround, reduced clothing lifecycle, in-house design teams and vertically integrated supply chains are now transforming the mind to market chain. Video cataloguing and virtual trial rooms will be next big trend with online shoppers.
“Augmented Reality and Virtual Reality have proved to be a boon for smaller brands and those that have constraints of space. Retail brands can re-think physical space utilisation and overcome the limitations with this technology. Taking a cue from global brands, many Indian brands are now embracing the use of this technology creatively and thus redefining real estate requirements in fashion retail shopping,” Rajat said.
The size of Indian apparel market in 2019 is US$ 56.4 billion. It is expected to grow at a CAGR of 8 percent by FY 2025, reaching US$ 89.2 billion. This market size growth projection stems from the huge potential in the new shoppers category. The fashion consumer market in India is constituted by 60-70 percent of new shoppers and 62 percent orders from new shoppers. The maximum sales in a year are often found during festive periods across metros and Tier 1 cities. Likewise, changing trends during festive and non-festive seasons, strong omnichannel strategy, data analysis and better understanding of shopper personas are empowering brands to retain new shoppers with the right product mix and price.
Envisaging a steady and bright future for the Indian fashion retail business, Akhilesh Prasad, President & CEO, Fashion & Lifestyle Business, Reliance Retail, remarked that the rich culture and long-standing trading and textile history are the main strengths for the Indian retail economy. “Although resources are limited, most of the changes in the world have happened through innovative thinking. Indians have our native intelligence and an ancient, yet robust civilisation. In the economic history of the world until 1,750, India and China had dominated world trade. The West has a vintage of 200-250 years, but I am certain that in the next 50 years, the cycle will change and India and China will again dominate the retail scene.”
He projected the entry of hundreds of global retailers into India in the near future which would, in turn, be an advantage to the domestic players who will always dominate local retail economy. “There will be a lot of changes in the next 10 years, much more since the advent of modern retail in the 1980s. While Indian traditional wear is here to stay, e-commerce is expected to evolve along with modern retail. Retail being the second largest employer in the country, regulations will ensure that employment in this sector is not disrupted. With the field open for global retailers, I am certain that the future holds promise for a mature economy.”
On the occasion, the dignitaries released the 17th edition of ‘India Business of Fashion Report (IBoFR) 2020 Year Book which seeks to foster a circa 2020 understanding of elements that will define innovation and sustainability-led business of fashion in India. This edition also witnessed the launch of ‘Fashion Techway’, a series of fashion retail sessions centered around the relevance of technology in the business.