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Dry fruits, backpacks fly off retailers' shelves this Diwali

In the foods category, the market witnessed a major conversion to dry fruits from chocolates this year

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Diwali festive shopping is in full gear at physical retailers as consumers are lapping up products, including gifting items, dry fruits, kidswear, ladies ethnic wear, home solutions as well as fresh and packaged mithais. Players like Future Retail are already witnessing a big consumer turnout across its stores in the country and are expecting to close the festive shopping sales with higher double-digit growth rate.

Sadashiv Nayak, chief executive officer, Big Bazaar, told DNA Money that it's one of the best ever festive season for the retail chain this year from a Diwali perspective. "Our numbers are clearly showing a positive trend. Customers have rewarded us for building an affordable range of gifting products across multiple price points. Our Gift World initiative comprising a mix of food, home, electronics, linen and gift vouchers among others has delivered great results. We also brought a lot of innovations, particularly in the home space. A lot of traction was witnessed with our combination themes as well," said Nayak. He said Big Bazaar is heading towards 20% growth over last Diwali.

In the foods category, while chocolates have been doing well, the market witnessed a major conversion to dry fruits this year. This also resulted in a good demand for dry fruit storage boxes. In the travel theme, combos of backpacks and other related gift packs like copper utensils, thermos sets were being used as an alternative (instead of chocolates) by corporates for gifting to their employees. In the fashion space, a lot of traction was witnessed in the kidswear and ladies ethnic wear category.

"In the food gifting space, for fresh as well as packaged mithai, my observation is that there has been a major shift to organised players this year. A very different level of traction is being witnessed from the kind of numbers we are getting on mithais and namkeens as gifting pack, clearly indicating that a completely different set of customers picking these up from our stores," said Nayak, adding that the consumer trends were based on buying behaviour at 280-odd Big Bazaar and 800-odd Easy Day stores across 160 locations in the country.

While e-marketplayers like Amazon and Flipkart have been driving sales taking the heavy discounting route, organised offline retailers are banking on their affordability strategy to grow their business. This was achieved by way of planning well in advance, efficient and effective vendor management and right stocking of goods across the retail store formats.

"The approach chops 4% to 5% the price very easily, thus making it easy to drive affordability aspect for the customers. Practices including buying at the right time, committing the quantity to vendors/ sellers, picking up all the inventory, making the supply chain optimal are some of the things that helped in the affordable pricing strategy," said Nayak, adding that while it may have appeared that inventory was being built up too early the strategy ensured that stores never went out of stock and there was no loss of sale at any point.

Ironically, while business of large organised retailers may not have got impacted due to heavy discounting by e-marketplayers, the same may not be true for smaller chains. In fact, industry experts are of the view that it's a mixed bag for offline retailers this pre-Diwali festive shopping season.

Devangshu Dutta, chief executive officer of retail consultancy Third Eyesight, said, online spending definitely has an impact on offline business, but it is unlikely that the large retailers would have had a damp Diwali.

"Shopping during Dussehra and Diwali largely revolves around clothing, footwear, home products, foods, durables and gold. It is the lifestyle category purchases that happen typically around the festivities. The Diwali period covers a large percentage of the consuming population and hence there is peak. In terms of absolute spend, online is still a very small percentage of the overall market. But what it does is that it disturbs the seasonal trend by spending crores in advertising and discounting. That creates a much bigger impact. It's like a drop of ink in a cup of water. It will colour the water completely. That's an unfortunate outcome of the pattern of growth online has followed in the last five to six years," said Dutta, adding that in the short term the consumer benefits on the pricing, but in the long term it could lead to an Ola/ Uber kind of a crisis wherein consumers will have to shell out more in the absence of other affordable options.

GIFTING TRENDS

  • In the foods category, the market witnessed a major conversion to dry fruits from chocolates this year
     
  • In the travel theme, corporates gifted employees backpacks and other related packs like copper utensils, thermos sets
     
  • In the fashion space, a lot of traction was witnessed in the kidswear and ladies ethnic wear category
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