Retailers bank on just-in-time strategy for the festive season

BENGALURU/NEW DELHI: Retailers in India from Benetton and Spencer’s Retail to Puma and Godrej Appliances have adopted a just-in-time strategy for the festive season, a departure from their 3-4 month long preparation time during pre-Covid days.

These include strategy and inventory planning, finance options and discounts, as the pandemic has put everything in a state of flux. “As we get closer to Diwali, we will figure out which plan will work,” said Devendra Chawla, MD and CEO at Spencer’s Retail and Nature’s Basket. “All forecasting and demand planning has gone for a toss and it will be a gut feel driven festive season this time.”

What will be a major change is the way the companies handle inventory. Godrej Appliances, for instance, expects its trade partners to stock up for about 10-15 days based on the demand, while last year it was for a month. “This time, liquidity is the biggest challenge, as consumers would want to save due to lower disposable income,” said Kamal Nandi, business head and executive VP at Godrej Appliances. “The focus will be to offer more flexible finance options, including lower EMIs and down payments.”

Fashion retailers, too, are not keen on stockpiling. “We are working to ensure that there is the right inventory at stores. But the real traction is online as more customers have been on-boarded in the last few months, who will shop online this festive season,” said Abhishek Ganguly, GM, India and Southeast Asia for Puma. “If that trend continues, we will be able to salvage something from last year but at this time, there is no point in taking a long-term view and predicting.”

Consumer durable companies, however, are more optimistic, as demand has been witnessing an uptick month-overmonth. August sales at Panasonic, for instance, was up 18% compared to the same period last year while it was up 17% compared to July. “The consumer durables industry witnessed a loss of around 20% in the past few months, and this festive season we are hopeful of recovering some of that,” said Manish Sharma, president and CEO at Panasonic India and South Asia. “We achieved 30% growth during last festive season and are hopeful to achieve the same this year,” said Vijay Babu, VP, home appliances, LG Electronics India.

Companies said factors, such as, the onset of festive season, which began with Ganesh Chaturthi, favourable monsoons, WFH trends and rise in first-time buyers from rural markets are expected to salvage sales. The festive season contributes 40-45% of the annual top line for most retailers.