India has immense scope for expansion in the retail sector. With an increasing income bracket, infrastructural development, and movements such as digital India, the country was climbing the ladder up in retail attracting many foreign direct investments. 2019 itself saw opening up of many luxury brands such as Scentido (luxury perfumes) in the Indian subcontinent. As the internet is becoming more and more prevalent, brick and mortar stores also chose to have a presence online to expand their sales and brand themselves amongst a wider audience, reaching not just the metropolitans but also the Tier 2 and Tier 3 cities.
An alarming percentage of 31 is shared by online sales in retail in India. The increasing user base expected to reach 600 million by 2021 is sure to give a hike to the same. The retail industry alone is responsible for creating about 8% of employment in the Indian economy along with contributing to about 10% in the country's GDP. In 2019, India was ranked no. 2 in the Global Retail Development Index with an expectation to reach more than USD 1 trillion in 2020. Encompassing electronics, grocery, and food items, fashion also shares a major percentage of retail in India.
Fashion apparels alone stand for about 8% of the total share of retail followed by accessories. According to McKinsey, the Indian apparel industry was to set foot into the global chart by becoming the 6th largest by 2022.
COVID 19 has undoubtedly affected all sectors of the economy including fashion and lifestyle, but what puts them into further vulnerability is that where groceries and electronics might see rising demand soon, fashion and lifestyle might be a delayed buying decision of the consumers. As necessity steps to the forefront, COVID 19 has affected the fashion and lifestyle retail industry and might continue to do so.
Initially, lack of footfall followed by an absolute lockdown was a direct hit to the fashion brands and lifestyle retailers bringing their immediate sales down by 80%. Further regulations concerning restrictions on gatherings and movement worsened the retail conditions.
As positive and celebratory sentiments have vanished due to the cancelation of events, the consumers are not looking forward to fashion and lifestyle products. The 'value for product' attitude is also challenging the fashion industry especially luxury fashion.
According to accumulated data the apparel industry in India has approximately 12 million employees followed by 7 million in the domestic sector. The retail industry together employs about 46 million people. Salary cuts and layoffs would affect the buying capacity and the overall income level in the industry.
As Spring/ Summer is fading away giving way to the newer season, the piled-up stock of the S/S season may create havoc looking for avenues to be sold. This piled up stock can be a reason for huge losses unless the same is rotated as next year's collection too.
Any retail is not self-sufficient it has auxiliaries and subsidiaries that support the final product's sale. In a webinar organized by the TRRAIN (Trust for Retailers & Retail Associates of India), it was speculated that if the retail industry would be impacted by 25%-30% the auxiliaries and supporting industries like supply chain, parts manufacturing, etc might be seeing a multiplier effect in losses.
“It may take six months for the larger companies to revive and 12 months for the smaller retailers. Retailers are sitting with six months of unsold inventory,” said Kumar Rajagopalan, CEO of RAI in the webinar as stated in the economictimes.indiatimes.com
Fashion and Lifestyle Retailers on COVID 19 and its Effects
"Recently implemented measures for strict containment, control, and prevention of the spread of the Coronavirus has impacted every business in big and small ways. Whereas the online retail business has seen a significant dip, the offline business has been completely shut down due to the closure of retail outlets. In the present scenario, with fear ruling the minds of the populace and control measures in place, shopping for fashion accessories does not take precedence over personal health."
Fashion brand Aprajita Toor with an online and offline presence has been creating and retailing Indian heritage footwear since 2012. This pandemic came as a sudden situation with online as the only medium of keeping the orders coming.
"Although the offline market has taken a substantial hit, the online market both domestic and international continues to provide a sufficient stream of orders to keep our hands busy in the foreseeable future. In the meantime, to tide away from the pandemic blues, we are running promotional offers on our website to cheer our customers with some great benefits on our entire range of designs."
Understanding the current scenario, the fashion brand is, on one hand, resorting to online and social media to keep put in the eyes of the consumers and on the other preparing well for the near future.
"As much we wish and hope that the market rebounds as soon as possible, the fashion market will take a while to recover from this enormous setback.
When a disaster of this magnitude arises, it forces everyone to take a step back and reassess their priorities. The online market will take at least 6 months to reach pre-pandemic levels. Hopefully, the Indian fashion market will start to show positive signs in the pre-festive months."
2. Liberty Shoes
Established in 1954, The Liberty Shoe company is an Indian lifestyle brand with a national and international presence. It has more than 6000 multi-brand outlets and showrooms across.
"Due to lockdown, we are facing a lot of challenges as our manufacturing units are shut, the shops and the stores are also closed because of the pandemic. March-June is the key months for the business, the new season's merchandise was placed to the shops, sales teams were geared up for various marketing campaigns, but unfortunately, the pandemic hit at the same time. But we have been able to cater to our customers' needs through an online website. We track our repeat purchases, which leads to encouraging results. And I feel normal and small surge is temporary".- Mr. Anupam Bansal, Executive Director of Retail, Liberty Shoes
Being a brand of the masses, they do understand the need to create brand recall hence, utilizing the lockdown to work in their favor they are focusing more on creating brand awareness and strategizing about post-COVID 19 markets.
"As the market is experiencing a whole new set of behavior amongst the customer, there is a sense of scare, cash-reserve mindset is noticed all around, it will take tough effort to make the walk-ins.
We are people’s brand, accepted by the masses, we understand the importance of marketing in the era where ‘loyalty’ is grossly questioned. People are getting a lot of information, content, via multiple mediums these days. The risk of losing the attention is very high. We have been practicing on doing our communication to the masses and the new generation of the audience as well, with our continuous series of brand communications, and we shall carry-on with the same attitude in the future. .- Mr. Anupam Bansal, Executive Director of Retail, Liberty Shoes
We are a homegrown brand of the country, being one of the oldest and responsible brands, the brand itself says – "we are about people", we have been very present at our all digital mediums, interacting with people on their well being, sharing powerful positive information, contributing to mankind's help during & throughout the crisis.
These attributes add up a lot of stabilizing/reforming the emotional connection between the people and the brand. We have been very natural and responsive as a brand towards the society" Mr. Anupam Bansal, Executive Director Retail, Liberty Shoes
Mr. Anupam Bansal, Executive Director Retail, Liberty Shoes showed concerns over the current economic challenge but indicated towards a better and hopeful future too.
"The effect in the Retail industry is very significant, factors like High rentals, EMI interests, etc might affect us. The economic challenge is equally crucial for all, not only for us, the entire world is going to struggle with this. But yes, as they say, “the show must go-on”, we shall overcome this too"- Mr. Anupam Bansal, Executive Director Retail, Liberty Shoes
While economy dips and the financial challenges rise to leave an impact on many, leading to a change in the lifestyle of the consumers, the overall outlook towards every industry also alters in the minds of the people. COVID 19 is one such crisis that has led to a new future of fashion and lifestyle retail. While the retail segment is expected to recover in 12 -18 months, many challenges and adaptations may need to be done by the retailers.
As income falls so does the power and willingness to spend. The consumers might look into more affordable products, curbing their desires to fulfill the necessary and basic needs. Hence, the retailers, fashion brands, and lifestyle brands might look into slashing their prices coming up with affordable collections that can be availed by their consumers.
2. Online Presence
The increasing fear amongst the people of becoming a victim to this unfortunate crisis has led them to explore more online. Forming a habit of the same, online retail aka e-tail might become the new digital brick and mortar store. Be it luxury, fashion, or lifestyle brands, online will be a resort they would take the support of post-COVID 19.
3. Easy Availability and Green practices
The general public sentiment states the pandemic to be Mother Nature's avenge hence, the consciousness towards sustainable practicing brands and its goodwill, would play a major role in sales of the product.
Another aspect would be easy availability, brands would try their best to be available easily and instantly for consumers, keeping the product's arrival as short as possible.
The ultimate aim of any business is to sell or to be of service, with such a crisis the aim might remain the same but fashion brands and retailers may have to change their practices and strategies to match the emerging scenario post-COVID 19.
As everything is uncertain about the regulations, consumption patterns, retail strategies, and product preferences, the Indian retail market might see a 360-degree turn. Layoffs and disrupted supply chains along with shutting downs and fear in the consumers have led the economy into major losses. This downfall will force retailers to go online and recreate their customer base or match up to what the customers are expecting of the brands. Both fashion brands and lifestyle brands have taken the hit and might take a little more than other industries to recover. With such a major share in the retail structure of India, they would need some more time to get back to normal functioning even after lockdown lifts.