Retailers bank on the Diwali season for better sales, simultaneously urging the government for support.
The coronavirus pandemic has cast a dark shadow on the fashion retail business. As the analysts predict that business will regain momentum till April 2021, the retailers believe that Diwali might bring a breeze of fresh air for them.
In a recent webinar conducted by the Retailers Association of India, myriad important decisions were taken for the fashion industry. The virtual meeting included leading stakeholders from the industry like- Managing Director of Ritu Kumar Amrish Kumar, Chief Executive Officer and Managing Director of Tommy Hilfiger and Calvin Klein India Shailesh Chaturvedi, CEO and Country Head of Bestseller Retail India Vineet Gautam and CFO of Manyavar Dalpat Jain. The meeting discussed some important measures for managing the present scenario and defining the future of retail.
With the upliftment of lockdown, comes great responsibility for the retailers as they now have to be more cautious. They will strategically plan the opening of the retail stores, considering the safety of its staff and customers. These measures arise owing to the decision of opening 25% of the retail stores after the lockdown.
The panelists made statements having unanimous beliefs. Shailesh Chaturvedi emphasized that businesses would have to take care of both people and cash flows, at least until June. On the other hand, Vineet Gautam commented on the gradual progress of the business and how this situation can be used to upskill and train the workers.
With safety becoming the focal point for every retailer, they would have to take adequate measures to gain people’s confidence. But the unsold 2020 spring summer inventory remains a hurdle. With some people opting for selling out the inventory on discounts as big as 80%, big names in the industry are still skeptical. Offering the products on unseasonal sales can tamper the image of the brand and hamper the market. Therefore, many fashion brands like Tommy Hilfiger and Calvin Klein might stretch their spring-summer inventory till Diwali, totally skipping the pre-fall production.
On this, Shailesh Chaturvedi agreed and said that inventory accounted for a large part of the company’s cash outflows, but the Indian climate is such that spring-summer wear can easily be used from July to September.
With the opinion, that people would initially be hesitant to shop in brick and mortar stores, many are counting on the Diwali season for revival. Diwali brings joy and the mood to shop for Indians. Buying new clothes and accessories to wear on this day has become a tradition. This has given the fashion retailers a ray of hope, who are relying heavily on the festival of lights.
Along with this, the retailers are also expecting significant support from the Indian government to help them stay afloat. Many retailers have urged the government to elongate the credit periods and contribute to the distribution of salaries. They additionally appealed to lower the interest rates as consumer spending would become more rational now. Consequently, the customers would now concentrate on purchasing essential items majorly.
The current situation has left stakeholders to rethink the business trajectory, supply chains, and employment policies. With focus shifting towards online retail, many businesses would now be seen expanding their presence on the platform. On the other hand, business is being impacted nation-wide, this could make customers resort to aggressive saving from aggressive spending.
The discussion ended with 3 momentous predictions- back end operations would now see major automation; luxury goods would become more affordable and the retail stores would shift to an appointment-based selling appraoch.