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Retailers resort to discounts, hop on to D2C bandwagon as COVID-19 hits offline sales

Multi-brand outlets such as Shoppers Stop, Pantaloons, Lifestyle have rolled out promotional schemes and are offering discounts to the tune of 50-70% on their websites.

May 14, 2021 / 01:05 PM IST
Most retailers report that their business was a complete washout in April due to localised lockdowns across the country.

Most retailers report that their business was a complete washout in April due to localised lockdowns across the country.

 
 
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Just when recovery was in plain sight, retailers are back to square one as footfalls dwindle to all-time lows at stores. Most retailers report that their business was a complete washout in April due to localised lockdowns across the country.

Struggling retailers, as a result, have started looking at ways to tide over these difficult times. Some retailers such as United Colors of Benetton, Cantabil Retail and Walkaroo are hopping onto the direct-to-consumer (D2C) bandwagon by launching their own e-commerce platforms. Others such as Spykar, FabAlley, Vijay Sales are running promotional offers to clear their stocks.

It’s Raining Discounts!

Several retailers have resorted to offering promotional offers on their e-commerce platforms to push out their unsold inventory. Spykar Lifestyles, FabAlley and Indya are some brands which are offering discounts to customers shopping on their websites.

“The nature of online business is such that we have to keep on rolling out discount schemes but this time we have gone more aggressive on the pricing as the income of consumers have been hit,” said Shivani Poddar, Co-Founder, FabAlley and Indya.

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Spykar is also offering discounts on the old inventory. While Vijay Sales, has announced a partial booking offer for its consumers, wherein consumers need to pay only 10% amount upfront to book any product on their website and the rest of the amount later when delivery resumes at their locations.

“We have to roll out promotional offers as we are stocked up and want to liquidate the stock,” said Nilesh Gupta, director, Vijay Sales.

Besides these, multi-brand outlets such as Shoppers Stop and Pantaloons have rolled out promotional schemes and are offering discounts to the tune of 50-70% on their websites. Aditya Birla Fashion Retail, which runs Pantaloons declined to comment on the story, citing a silent period before its quarterly results. Shoppers Stop also could not be reached.

The D2C Way

Much like last year, when Covid-induced restrictions had forced brands from across categories to find alternate ways to reach out to the consumers, 2021, too, is following a similar trajectory.

Earlier this month, footwear brand Walkaroo, which has over 500 dealers in the country, expanded its online presence by launching its D2C platform.

“We have recently launched our own e-commerce website as we see more traction in the online business,” said Manoj Bastian, Director, Walkaroo International.

Similarly, Benetton Group plans to launch an e-commerce platform for its brand United Colors of Benetton by July, informed Sundeep Chugh, MD and CEO, Benetton India.

Cantabil India, which currently gets less than 5% of its sales from e-commerce marketplaces, plans to introduce its D2C channel by the middle of this year. The company, shared Shivendra Nigam, CFO, Cantabil Retail India currently is preparing for the move and increasing its warehousing strength.

Experts say the move towards D2C has become a necessity for these companies as high streets and other offline locations have become inaccessible to the consumers.

“The companies need to connect with buyers and given that the brands take a backseat on marketplaces, where the focus is on pricing, they would like to build their own channels,” said Amarjeet Singh, Partner, Tax Regulatory and Internet Business, KPMG in India.

Large businesses want to give consumers a good experience and considering the growth witnessed in D2C brands of late, he adds, launching their own platform is an imperative.

Back to Square One

Several states in the country including Delhi, Maharashtra, Jharkhand Chhattisgarh, Karnataka, Tamil Nadu have imposed lockdowns and other restrictions as the country battles the second wave of the Covid-19 pandemic. Unable to open stores retailers have been severely hit with these fresh set of curbs, while at locations where restrictions are minimal, footfalls have dropped to single digits.

“We do not have any offline store operational at the moment,” told Sanjay Vakharia, CEO, Spykar Lifestyle. The company has 193 currently stores in the country.

According to Vakharia, the company had taken a severe hit on its business last year, too, due to the lockdown but things had been looking up with the reopening and pursuing months which coincided with the festive season.

“We were getting back on track and now this has happened,” he adds.

Vakharia is not alone in this plight. Other retailers in the country are sailing the same boat. Shivani Poddar, Co-Founder, FabAlley and Indya shares that out of the company’s over 600 points of sales, 95% are not operational at the moment. Cantabil India, which has over 300 stores in the country is able to operate only 12 of them currently due to lockdowns across the country.

Several retailers also report that they are unable to sell out of even e-commerce channels at several places in the country as guidelines only allow delivery of e-commerce. As lockdowns get extended, the retail sector hangs by a thread in the country.
Devika Singh
first published: May 13, 2021 07:11 pm

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