“Retailers have worked hard to change their very way of operations – increased emphasis on hygiene, packaging, safer customer experiences, even adopting new tech. Retail Staff is more tech-friendly, inventory management is more conservative and assets are being held close. But this time around, the consumer isn’t spending. With family and friends falling ill and uncertainty looming, the consumer has shifted into a savings zone. It’s the peak season for the apparel retail industry and each level of the value chain has been hit hard. We are all facing serious challenges that make revival difficult, force small businesses to reconsider and distress larger players in the industry. And until every Indian is not vaccinated, everyone will continue to operate under the pandemic radar,” commented Kapil Pathare, Director, VIP Clothing.
Back to lockdown
The sudden halt to retail brought by the pandemic’s second wave has left many in shock. Unlike last year, this year the impact has been too hard to handle. People have faced its ramifications in every aspect of their lives.
“Last year, we could sense that the market was recuperating within 3 months of the lockdown, but this time the comeback will be slow and the festive shopping will also likely have a big impact. People have lost way too much in every sector, every way, so spends are likely to reduce. We have also had to face huge losses as compared to last year and 95 per cent of our business is down. Online sales are just about there, but that’s also nothing significant. The only saving grace here is the equity we raised last quarter. But in retail, we all have certain fixed expenses, so the cash crunch is real. The most significant thing is that this time around, the negative effect has spread out even to the Tier-2 and Tier-3 cities,” mentioned Lalit Agarwal, CMD of V-Mart Retail.
Waiting for the change
“Now, it is time to swallow the bitter pill and accept the stage at which our businesses stand. Pre-Covid revenues and growth for the retail fashion industry isn’t coming soon. But we continue to remain optimistic. We’re seeing determined efforts of State Governments to bring the situation under control and try variations of the lockdown. This gives us hope that FY ’21-22 will still give retailers and the industry opportunities to bounce back, even if it is only at 30-40 per cent growth for the year. By FY ’23, we are hoping vaccinations will be complete globally. This will not only help the industry recover, but also boost revenue growth”, Pathare adds.
Shreyans Surana, Director, Style Baazar is however bullish about the market and he says that with people becoming more conscious about spends, it is obvious that most of us are keeping aside funds in worry of the inevitable. Once we sail through the worse and vaccine becomes available in ample, consumers will gain confidence and return back to the stores. “The money will come back into the economy today or tomorrow, it is just about waiting for the right time. Unlike the last year, this year when the second wave hit , we were actually more equipped to handle everything. At the bottom line, from landlords looking to reduce rent for retailers to us rearranging the supply chain, we had the matrix in place. There is no denying that at the top line, sales have nearly been null for most of us. But for us, the areas we operate in have just about gone in to lockdown, so in the initial days of the quarter, the sales were not that low. I am certainly hopeful that by August this year, we will be able to walk on the path of recovery,” Shreyans elaborates.
Eyeing the future
“Autumn-Winter this year is high on the radar for retailers and we have been getting requests from them to not to reduce inventory this year. However, putting our learning from last year into perspective, we have been handling our inventory with care this year and more than stock-in, the stock-out is what has been promising so far. Until April business has been good and as for targets we are now trying to inch closer to one of our best performances from the past. Being cautious and staying alert has helped us eye the secondary or the tertiary more closely this time around. Fortunately all our expansion plans and growth optics was planned to come into action in the August fiscal. This is because, we calculated the odds when strategising. We are hopeful of the festive market and the numbers we await to achieve in the next quarter,” Nirdosh Kapil, Vice President of Sales at Blackberrys Menswear mentioned on a positive note.
Pathare however, tells us to look closely at existing business models, operations, strategies, and people. He says that customers have already adopted the digital store purchases. What remains is for retailers and businesses to facilitate these purchases and create engaging shopping experiences.
“Continue to invest in tech to improve operational processes, create efficient POS systems, easy to navigate e-commerce portals and consider virtual reality tech to improve the shopping experience for your customers. To conclude, what always did and continues to drive consumers is value. If all retail businesses started orienting themselves and their strategies to deliver value at each level, a strong revival by early FY ’23 could become a possibility,” Pathare concludes on an optimistic note.