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After months of the COVID triggered wallop, markets and economies around the world are now steadily inching back towards normalcy. The Indian fashion industry, one of the worst hit retail sectors by the pandemic, too has finally started registering an uptick in both demand and sales since the second quarter of 2020.

“Demand for fashion has witnessed a gradual growth from the lockdown period, although the figures aren’t as promising as the pre-COVID phase. There has been a steady demand from Tier-II and Tier-III cities which has contributed in our total sales. The footwear industry is witnessing a steady growth but for returning to sales of pre-COVID level will take time and we are targeting for 2021,” says Ashish Jain, CEO and Director, Von Wellx Germany.

Festive Season Drives Consumption

Along with the relaxations in lockdown norms and opening of the economy, one of the major drivers of the uptick in demand was the festive season, which has traditionally been the time when Indian consumers shop with fervor.

“The festive season turned out to a silver line for us as we saw a great demand from the consumers. We had a special collection for the festive season that was economic, and the same time was of supreme quality with health benefits that attracted the consumers to buy,” says Jain.

Over the last month the COVID-19 pandemic has brought about hitherto unseen changes in Just like the shifts in societal and economic order. India – and the world – has been forced to deal with the ramifications of COVID-19, including, health consequences, economic crisis, job loss, etc. This has severely impacted consumer behaviour and the uncertainty has led to a drastic drop in the average spending of consumers. So, although, the festive season registered positive consumer sentiment, the pandemic infused cautiousness was apparent as well.

“The festive season definitely brought relief in terms of sales. But while sales figures were better than the previous months of unlock, this time it wasn’t at par with 2019 or the years before that. Considering this is India, a country where festivals are celebrated with much oomph and zeal, things were pretty damp this year, comparatively. Customer sentiment was highly cautious and in general, they refrained from splurging and opted only for what is necessity. But we did witness reduction in degrowth as compared to last year,” says Asha Esther Jaikishan, Head of Marketing, Numero Uno.

Echoing similar sentiments, Sounak Sen Barat, Creative Director & Founder and Anu Shyamsundar, Business Director & Partner, House of Three, says, “The luxury segment has especially been affected by the dampened season cheer and restrained spending. People have spent conservatively this Diwali as well as during the wedding season since the size and budgets of events and weddings have been cut down due to the recession. We haven’t seen an upsurge in Diwali shopping compared like-to-like to last FY, but we have seen an upsurge in custom Couture and Pret orders for weddings, including brides, grooms and otherwise.”

According to Pallavi Barman, Head – Marketing & Operations, HRX, pent-up demand is another reason instrumental in bringing sales to positive territory. “In my opinion there was a pent-up demand owing to the lockdown which got unleashed as e-commerce operations started. People not just bought fashion, but a lot of essential shopping happens too. Secondly there is a Covid fatigue that has set in. There is no travel, and the travel budgets are being allocated to feel good shopping for happy times likes festivals. Having said that I would like to believe that the Indian consumer is still being cautious in splurging on unwarranted heads this year and being cautious with funds,” she adds.

Footfall in Physical Stores

After the pandemic hit, digital adoption exploded with e-commerce, unsurprisingly, graduated to become the sole channel of choice for an increasing number of consumers. Even after the nationwide lockdown was lifted, consumers continued to shop online to avoid crowds, indoor shopping locations.

“Footfalls are obviously not as much as it used to be. But we don’t blame anyone for this. This is actually good that people are only stepping out when needed and keeping themselves and others safe. Though slowly with the festive and wedding season, footfall is increasing. But we are maintaining all safety norms to ensure safety,” says Jaikishan.

Even consumers who have opted to visit physical stores are bullish on ‘safer’ modes of product evaluation and consumption and are preferring businesses which prioritise hygiene and buyer convenience. In line with this, implementing strict measures to ensure a safe environment for shopping has become imperative in the ‘new normal’.

‘Safety at the core’ has become the new norm of welcoming our customers in stores. What is promising is to see that people are slowly trusting that the environment is safe, and the customers are confident to walk back into our physical stores. Their feed-back on experience and safety has been super positive,” says Umashan Naidoo, Head of Customer, Westside.

“Footfall has witnessed a steady growth since the unlocking has started, but they aren’t equalizing to pre-COVID times as consumers are still making sure to stay at home and maintain all the other precautions for the pandemic,” states Jain.

Digital Transactions are the Future

In the last few months, the retail world has witnessed a great uplift in the intent of people wanting to buy online. Today, e-commerce has become the sole channel of choice for consumers around the world, compelling businesses to invest courageously and timely in pivoting their e-businesses.

“Recently we have invested in a new website and whole new e-com platform with enhanced user interface. As we understand that digital transactions are going to be the future, we are also improving our digital arm in every sense. Coupled with strong digital marketing strategy and social media for customer engagement, our brand is ready to make the cut. But given all this, we have seen a steady rise in our online sales in last 3 months. We have seen an increase of almost 100 percent in transactions,” states Jaikishan.

“Online sales are increasing by the day. The ratio of customers visiting our website as well as our partner sites is huge as compared to the few who could access our products in brick n mortar stores. Consistent online sales from India and abroad has been promising and a huge motivation to keep going stronger, with focus on specific international markets to register b2c sales,” add Sounak Sen Barat and Anu Shyamsundar.

Experts believe that in the near future, even after the pandemic ends, the preference for digital commerce is going to continue.

“E-commerce is going to continue its dominance as the most preferred sales channel because of its so many advantages. It allows the consumer to browse through multiple options from the same platform. Time and place don’t act like a hindrance. With a variety of offers ongoing either from the brand’s side or from the e-commerce platform itself makes it more alluring to the buyer to shop. Apart from these, e-commerce platform serves as the best answer to the social distancing and the other pandemic protocol and fits properly with the new normal norms,” says Jain.

Technology is the Need of the Hour

Technology has become an indispensable part of retail especially post the pandemic. While, the consumers are going for various e-commerce platforms to meet their demands, they are also looking for new shopping experiences, which is possible only through technological innovation.

“Technology is revamping the sales process by aiding the sales team in generating more leads, fueling more effective sales conversion tactics, and getting prospects to convert. We use technology to improve their visibility and generate more leads, establish long-term relationships with prospects and customers, build a strong sales pipeline, enhance responsiveness, and ultimately move towards optimizing the nurturing and conversion of leads,” states Deepak Bansal, Director, Cantabil Retail India Ltd.

According to Jain, Von Wellx Germany is working on multiple technologies under areas of customer service and interaction, warehouse and operations management, retail sales and stock management.

“It’s important that we turnaround the stock in the most efficient way so that we have the least stock outs and minimum over inventory. In footwear retail, stock management is the king, and we are working out on a technological system which will remove the inefficiencies from the system and make the difference between online and offline disappear,” he states.

Westside is banking on the Ship-from-Store concept that is currently activated in over 34 stores. “So, when a customer buys online from Tata CLiQ, the products gets delivered to the customer from the nearest Westside store, the sale is tagged to that store as well. We are also mindful of cyber security and the tech space. In addition, we also organise our data efficiently to deliver faster and better each time. The transformation into a digital world will be faster than we imagined,” adds Umashan Naidoo.

What to Expect in 2021

The one major carry forward which the New Year 2021 will have from 2020 is the continuing impact of the COVID-19 pandemic. While the lockdown is lifted and economy is opening up, revival of demand and sales for fashion is expected to be gradual as customer’s have become careful of their spends and focus more on, need-base, priority purchase. “We are quite hopeful of revival consumption, but we need keep in mind that it’s going to take time for the new normal to set in. We are still unsure of the vaccine and hence, it looks like half of 2021 will go in recovery,” states Jaikishan.

“The demand for fashion has witnessed a drastic rise in the last few months, especially owing to the festive season. However, to achieve the same growth figures vis-à-vis last year will take time, as we are still in middle of a pandemic and people are wary of stepping outside their home. We are hopeful that by March, the impact of corona on the market would start to fade, and from next financial year onwards, we can expect the markets to function at pre-pandemic levels,” concludes Bansal.

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The brand has also created a multi-stack omnichannel /phygital model which cuts across its sales channel and aids it in driving new benchmarks in customer service as well as build a more effective inventory flow.

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Titan’s loyalty base is expected to clock 20 million consumers by the end of 2020. “It’s a question of identifying the right segments and the user’s life-cycle journey as well as his life state journey. We ran a data enrichment program recently where we have been successful in enriching data of about 3 million consumers. This has helped us to cross sale our other products immensely. We are aiming to be relevant and timely and not over communicate to the consumer and this is where data and analytics are play a huge role,” says Krishnan Venkateswaran.

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According to a PTI report: Madame has reported a turnover of Rs 275 crore for 2019-20.

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“While footfalls remained much lower than normal, the business witnessed higher bill values and better realisations,” it added.

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The agency expects a huge revenue downfall for textile companies in 1HFY21 and a moderate recovery only over 2HFY22. With the stoppage of production and shortage of labourers due to the lockdown, revenue is likely to bottom out over 1HFY21; but, the consumption demand is unlikely to revive in FY21. This is likely to result in a fall in EBITDA in the range of 20 percent -50 percent Y-o-Y, depending on the segments, leading to deterioration in credit metrics. Furthermore, players in spinning, readymade garments carry high debts on account of stretched working capital cycles with low cushion to borrow. The agency expects the working capital cycle to stretch for textile players over the next 9 months due to delays in collections and a longer inventory.

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