Nov 13, 2012, 04.42 PM | Source: CNBC-TV18
With the weak economic outlook affecting growth for most brands and retailers, this year, the larger target is to revive consumer sentiment.
This Diwali, its LED TVs, smartphones and tablets that have become the fastest growing category for consumer goods retailers like Croma and Vijay Sales. Both chains are expecting a 10-20% growth in sales over last year's festive season. Interestingly, however, they have both slashed marketing budgets by as much as 20% from last year.
The economic slowdown coupled with rising input prices saw the growth of Arvind Brands that retails brands like US Polo, Arrow and Nautica, drop from 40-50% last year to 15-20% this year. Even though most apparel retailers extended the sale period by two months to include July and August, Arvind Brands is banking on its 10-15% increase in ad spends to generate enough consumer interest.
J Suresh, MD - Brands & Retail of Arvind Lifestyle Brands said, "Last Diwali was excellent for us, but this Diwali, getting a like to like growth of 15-20% should be okay."
A dip in prices from nearly Rs 33,000 per 10 grams to Rs 30,700 per 10 grams of gold in the last three weeks has come as a blessing in disguise for jewellers. Sales for national retailers Tanishq and Gitanjali Gems grew by nearly 35-40% since Navratri. But, volume growth is expected to be just 10 percent, as customers are opting for more light weight jewellery.
Abhishek Gupta, President of Gitanjali Gems said, "Fortunately, this year the festive season is very close to the marriage season. So consumers have dual reason to shop. We are seeing a trend in higher-end segments of jewellery. So it's not only ring, ear-ring, pendant, but its necklaces, and bangles and it's a combination of festive season and marriage season that's going along. So there's a category mix change that we see from consumers."
What's also helping retailers and marketers is the fact that the festive season spans both October and November this year. Though retailers agree that getting consumers to splurge is a bigger challenge, they are sure that the festive season will fetch them the usual 5-10% growth in sales.