Shopping malls, brick-and-mortar retailers prepare for festive sales

Mall operators and brick-and-mortar retailers are going all out to ensure higher footfall during the festive season, even as e-commerce players continue to lure customers with numerous offers during the most important sales period of the year.

While e-commerce companies still constitute a small part of the overall retail pie, brick-and-mortar players are having to up their game to prevent consumers from giving up on shopping from physical stores all together. Retailers are spending marketing money in a hope to benefit as consumers spend in an economy that is looking up. For instance, the High Street Phoenix mall in Mumbai, along with Palladium mall, is running a midnight campaign called October Indulgence, wherein both the entities will work till 11 pm on weekdays and till 11.45 pm over the weekends, while they try to lure more customers with contests to win vacations at the adjoining Palladium hotel on purchases worth Rs 2 lakh.

Another mall in suburban Mumbai, Phoenix Marketcity, Kurla , expects footfalls to go up by 30 per cent this year with its theme based on the culture of gambling during Diwali. For the theme, called 'Vegas Fortunes', the mall operators are spending about Rs 1 crore on lucky draws to get a trip to Vegas, a luxury car, and other consumer durable goods. "For any business to function, you need to deliver not just a satisfying but also an enhanced customer experience throughout the year specially during the festive season," says Amit Kumar, Center Director, Phoenix Marketcity, Kurla.

Last week e-commerce player Flipkart organised the "Big Billion Day" sale. Despite drawing a lot of criticism and following it up with an apology, the company said it achieved a target of $100 million in gross merchandise value, or GMV, in 10 hours. Rival Snapdeal also said it sold lakhs of products on the day, and made sales of more than Rs 1 crore a minute.

As part of the Diwali Dhamaka Week, Amazon has rolled out special 'Lightning Deals' every hour from 7 am to 6 pm. (see https://www.businesstoday.in/story/amazon-floods-shoppers-with-discounts/1/211286.html)

Soon after, industry body Assocham released a survey stating that online shopping may increase by 350 per cent during Diwali, and will see a likely decline of 50-55 per cent in footfall in malls. "This festive season, shopping on ground has taken a back seat. Apart from convenience, rising fuel price, security reasons, online discounts and availability with abundance of choices are keeping consumers indoors, " said Assocham Secretary General D.S. Rawat.

To ensure continued footfalls, Singapore-based doughnut chain Mad Over Donuts is attempting innovations in its products. The company has introduced doughnuts that are topped and infused with traditional Indian sweets like Gulab Jamun, Boondi and Kaju Katli, among others.

Future Group's Big Bazaar retail chain is also adopting an innovative approach wherein every customer will get a shopping card that can be used at any of its outlets and can avail cash back that can be encashed for shopping at any of the group's retail chains such as Big Bazaar, Food Bazaar, Central, e-zone and Home Town, among others, for the rest of the year.

While e-commerce is having a difficult time with consumer electronics companies, which are believed to sell a lot during the festive season with buyers looking for schemes as they buy new things for their homes, several players have launched offers specifically for the offline world, several of whom had expressed discomfort about the excessive discounting on online shopping portals.

Electronic product company Sony India expects to benefit from the festive season and said it is targeting sales of Rs 5,100 crore between August and November 2014, up 25 per cent from last year. "We believe that the festive offers will further accelerate, coupled with the positive market sentiment from a resurgent economy," said Sunil Nayyar, Head of Sales at Sony India, in a statement. The company also said it is spending about Rs 250 crore to market its festive season campaign. Free products such as smartwatches and PlayStation 3 gaming consoles are on offer on various purchases.

Similarly, PC maker Hewlett-Packard has also launched exclusive offers that will be available at the company's 'HP World' stores across India, channel partners and its own e-commerce portals. Voltas is also expecting a double-digit increase in sales this festive season, with its offers available through its network of over 9,750 retail touch points.

Only time will tell how the tussle between brick-and-mortar and e-commerce players pans out. But the sure-shot winner, while this battle takes place, is the consumer.