Fashion is all about trends and online fashion retailer, Myntra is on to a one that will make your head spin. The ecommerce company is no stranger when it comes to experimenting with trends. Back in 2015, the etailer tried out the app-only strategy. Recently, it went offline in Bangalore with an exclusive physical store for one of its major brands, Roadster.
Now, Myntra is looking to introduce a brand new sales event in April. This event will revolve around high fashion and minimal discounts as it gradually drifts towards product sales at full price.
Where did this idea come from?
The new sales concept Myntra is following was inspired by Xiaomi, the smartphone brand. It uses a flash sale model to create a scarcity of supply which in turn increases demand. And, products are sold in small batches during well-promoted sales events. In its marketing campaigns, Myntra will promote high fashion for the event.
Ananth Narayanan, the chief executive of Myntra, said, “What other e-commerce players have done is events that play on the scarcity of cellphones. Nobody has done it in fashion. The big thing is, can we create a full-price fashion event—and this is not just scarcity, the other big push is fashion trends. From this event, the commitment that the team has given me is Rs60 crore, but the target that we have is Rs100 crore.”
How will Myntra execute this event?
The theme of the sales event will be fashion instead of low prices or discounts. Discounts will be available, but only at about 5-10%.
According to Narayanan, the value of the sale will be derived from four things. They include:
#1 – A fresh selection which will include new launches for the season on Myntra
#2 – New brands such as Esprit and Hugo Boss
#3 – Innovative gigs with brands and celebrities
#4 – Exclusive collections for customers
The main aim here is to encourage existing customers to buy more full-price products than they have before.
What is the end game?
It is crucial for Myntra and its parent company to minimise losses. This is the primary reason why the etailer is focusing its sales on fashion instead of discounts.
The online fashion retailer managed to cut down discounts that do not encourage purchases and supply chain costs too under the leadership of Narayanan, in July 2015. Now, the etailer is looking for new ways to reduce expenses. And, if its full price strategy fails, the etailer could risk the chance of turning profitable.
Harish H.V., a partner at Grant Thornton India Llp, a consulting firm said, “Companies in e-commerce are now moving away from heavy spends on discounts and advertising. All players used to buy full-page ads earlier; now, that has come down… In fashion, a category that has traditionally seen heavy discounting, the focus is now moving to adding more labels and a better and curated mix of products.”
The Flipkart owned ecommerce platform expects to see a 40-50% increase in its sales by the next fiscal year. This will be on top of the Rs.5,000 crore gross sales it is soon likely to declare by the end of March, said Narayanan.
The online retailer is looking to earn between Rs.60 crore to Rs.100 crore during its 3 day sale in April, which will be at the start of the month. During its January End of Reason Sale, it raked in more than Rs.350 cores. The same sale will be held again in July and the revenue earned from EORS in January and July will contribute to huge chunks of the company’s annual revenue.