Winning over India’s multi-billion dollar fashion market – the sixth largest globally – is no easy feat and as many have ventured and lost, magnates like H&M, Zara and Mango or Armani, Louis Vuitton and Prada have tactfully adapted to the tastes of an audience that is poles apart from any other population. That being said, things have been rendered a little difficult by the pandemic not only for foreign entrants, but also Indian businessmen. As the Indian population has become more accustomed to the new normal, retailers too have arrived at certain conclusions as to running businesses and the new opportunities for investment that might be the harbingers of a new era in retail altogether.
India, with a massive potential in Tier-2, Tier-3 and Tier-4 towns, is asking itself the importance of ‘functional garments’ vis-à-vis ‘cosmetic garments’. And while it is certain that people will continue to wear clothes, “consumer behaviour will change drastically wherein people will buy fewer quantities, less frequently and buy cheaper,” maintains Rahul Mehta, Managing Director, Creative Garments Pvt. Ltd.
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As for trends, there are myriad speculations surrounding what consumers will prefer to come, but all have the overarching theme of taking retail virtual. Whether it starts with omnichannel retailing, virtual assistants, technologically-enhanced physical retail or integration of AI, the onset of the pandemic has accelerated the need for technology and the race to integrate it for brands. Siddhartha Bindra, Managing Director, Biba Apparels says, “This is a time when people are opening their minds to shop online. There are many people who had their first experiences of shopping through e-commerce and most of them can say that their experience was positive.”
That being said, numerous factors will determine whether a brand is able to successfully navigate its way out of this pandemic apart from just embracing e-commerce. It is imperative to explore which brands and stakeholders of the apparel and textile industry have their work cut out for them and which will sail somewhat smoothly through this journey.
Survival of players: Big vs. Small
While some suggest that the time for big players to snag the lion’s share of the market is here that will eventually end up pushing the niche brands out, others feel that it will become increasingly more difficult for smaller brands to survive over the course of the next year and a half. “There are lots of small labels not promoting themselves as a brand. They lack any unique consumer strategies and have no or very few USPs. People will move to brands with a sharper target audience and communication strategies. All brands will have to play to their strengths and skill sets,” says Rahul Mehta. Many experts accept that this is the time to redefine a brand’s positioning in the market and increase interaction with consumers to build trust that will carry them through these circumstances.
However, not all concur with this assumption. Ganesh Subramanian, Founder and CEO of Stylumia, a fashion tech company for trend forecasting and demand planning platform using AI-based fashion analytics enabling revenue growth and sustainable fashion, has a completely different outlook as to the future of small players in retail, “While in physical retail, a market leader may have 10-20 per cent of the share, in the online world, that decreases to just 1-2 per cent. E-commerce has afforded a fantastic opportunity for small brands to blossom.”
In fact, being part of the magnitude that is e-commerce gives them a chance to overcome their deficiencies in term of resources and supply chain.
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Max Gilgmann of Kaleidoscope seconds this standpoint, “There has been a shift from both sides – physical to digital and digital to physical in Europe. This has meant that the luxury sector is doing well and the value segment is popular with customers. It is the mid-segment brands that had been struggling even before COVID-19 and their troubles have been amplified.”
Another factor that plays to the disadvantage of big players is the amassing of inventory. “Other industries have a cadence; they know their numbers. That is not always the case with apparel retailers here. We need to learn to manage inventory so that it doesn’t become a burden. We have to analyse weekly and take a call,” says Nitin Mohan, Founder and Director, Blackberrys Menswear. Inventory has become a big issue for brands, so much so that most of them are stretching themselves thin trying to get rid of excess stock before the season changes around Diwali. Smaller players have the advantage of limited inventory and smaller, more localised supply chains, purging them of the worries of having to deal with international suppliers.
A new look at digitisation
Myntra, an industry leader in fashion e-commerce, revealed at the India Fashion Forum held in Mumbai in March that the US $ 100 billion apparel and accessories industry is growing at a CAGR of 8-10 per cent offline with a growing acceptance of e-tailing as the future of retail. Total number of online transactors was 200 million in 2017, but the number is estimated to increase by 65 per cent by 2020. In essence, Myntra reported that India’s online fashion market will grow by 3.5 times from US $ 4 billion in 2017 to US $ 14 billion by 2020.
These promising numbers are what have accelerated each brand’s urge to fight for a space in the online market. “Even before the pandemic, Biba’s marketing was 70-80 per cent digital and that has increased to 100 per cent. We had started investing in e-commerce 7 years back, but now digital has become a much more important part of business. We are planning to provide customers with omnichannel retailing by August-September, as COVID-19 has accelerated a lot of things we had in the pipeline,” says Siddhartha Bindra.
Apart from digitisation for the customer, brands need to ramp up their purview of back-end digitisation too. “Many brands think that if their inventory turnover is as fast as Zara, they will be able to capture the market. What they lack is velocity, i.e., speed with direction. This is the time for discovery of winning ideas, and for that understanding, the consumer is important. Data analysis and AI integration help largely in understanding the dynamism of your consumer. The focus should lie on reading the data right,” explains Ganesh Subramanian. Digitisation is about relevance. Products should have real-time relevance in terms of price and need. AI can be used to not only improve conversion, but also to segment and retain customers because a website is too large a playing field for manual overseeing and analysing.
It is for certain that channels like bricks-and-mortar and MBOs are not going out of business any time soon, but the integration of technology increases a brand’s understanding of its consumers’ manifold.