Too many discounts may be spoiling retail sustainability: Harish Bijoor

The trend of big festival sales is changing and every day is a festival kind of a mindset is emerging, Harish Bijoor of Harish Bijoor Consults, tells ET Now.

Edited excerpts:

For India, there are festivals spread all across the year. So, would it be wrong to take pre Diwali sales data and say there has been a consumption slowdown?

If you look at the business of “coagulated purchase,” in south India, the New Year day which 30th, 31stand the 1st and the 2nd of January are big consumption days. Then there is Diwali, Dusshera and regional festivals like Onam. But this trend is changing and if you ask me why, I would say that every day is a festival kind of a mindset is emerging. A big thanks goes to e-commerce players who created those big billion days.

Let us divide the consumers into urban and rural. In urban India, the coagulated purchases are evening out. You are picking up staff whenever you feel like, maybe at 2:00 AM in the morning on e-commerce site. But in rural areas, the festival purchase is linked to crop harvesting pattern.

When you harvest, you have money and most of the good festivals happen close to harvest time. So, there is a clear divide between urban consumption and rural consumption.

Not too many jobs have been created. The wage hike has not been great, interest rates are inching higher and will start biting into your total cash availability. Indians own real estate and gold and there is no wealth creation on that account. Will all these factors have an impact on the consumer sales and consumption demand?

Onam sales were depressed as an aftermath of the Kerala floods. The volatility in the stock market, the ups and downs in the auto industry have taken a big hit. Sale of high value consumables or durables were hit and I am speaking purely from my consulting client list kind of a mindset. FMCG, was absolutely not affected.

The point is that consumers have changed some of their habits. The environment is not so great and therefore festival sales are not as gung-ho as they used to be in the past. Marketing companies can stand up and say that everything is hunky dory but the reality is everything is not hunky dory.

The blip that you used to get is just not happening at this point of time and I think that is a point of worry. Marketers are yet to smell the coffee and say that hey guys, festivals are the time when I must not advertise. In fact, I tend to encourage my clients not to advertise during the festival time because this is the biggest clutter moment of our lives. Newspaper, TV advertising shows everything is too festive. The brand does not gain. A simple idea; do not really overload on the festival but try to be real with the consumer and stay level.

Where are you seeing those blips? Where do you feel consumption patterns getting a little shaky and tapering down?

My auto company clients have a bit of a worry at this point of time. The replacement cycle in durables, which are household items like washing machines and refrigerators, is normally not very hot. Surprisingly, the large screen television sets with technology added, the smart TVs etc are not moving as fast as expected. And the worry is too many discounts are going around and that worries the sustainability factor in most of retail enterprises at this point of time.

The dvelopment was reported by retail.economictimes.indiatimes.com

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