The season of online sales will begin with Independence Day and everyone is wondering if it will be spectacular or a lackluster affair. Online retail gained momentum when it did because it had special add ons like home delivery, cash on delivery and oh yes… the mind-blowing SALES PRICES!
Unlike online retail, offline business cannot afford sales bonanzas of ridiculously low prices. With marketplaces funding discounts to a certain degree and promoting the sales event through digital and print media, online sales became a way of life in online retail. Online sellers save on advertising costs and only have to bear discount expense. As a result, everyday was a day for insane discounts and product sales.
Prominent sales last year included:
- Big Billion Days (Flipkart)
- Great Indian Festival Sale (Amazon)
- End of Reason Sale (Myntra)
- End of Season Sale (Myntra & Flipkart)
- Republic Day Sale (Flipkart)
- Monsoon sale (Shopclues)
Apart from these etailers also hosted call out sales like:
- Month End Sale – Lingerie & Sleepwear (Voonik)
- B1G1 (Limeroad)
- Weekend sales (Myntra)
- Rush hour sales (Myntra)
Call out sales are a regular kind of online retail sales. Call outs are the usual sales held on marketplaces like 10% off on women’s trousers, Rs.399 on tops and tees, etc. They are classified into category call outs (Eg. 30-40% off on fashion and lifestyle) and price slab call outs (Eg. Rs.499 and below).
A 100% rude awakening
The online sales train began picking up steam with the fuel of discounts as high as 80%. However, it came to a complete halt with the introduction of 100% FDI in online retail of goods and services under the marketplace model.
The new FDI policy prevents marketplaces from influencing online product prices directly or even indirectly. Offline retail felt ignored with the rise of ecommerce and lamented how online retail was an unfair competitor. As a result online retail lost its edge overnight and offline retail rejoiced about an equal playing field.
How are sales still occurring on Marketplaces?
Sales have been the lifeline of online retail for a long time, ending them now is not a suitable prospect. The dependence on sales lead experts to believe it will take at least a year for online retailers to bounce back and fully comply with the new FDI norms. On the contrary, just a month after implementing 100% FDI in ecommerce, Flipkart hosted its 3 day long Big Shopping Days sale.
When talking about Flipkart’s position in the ecommerce industry, CEO Binny Bansal mentioned a thing or two about the 100% FDI ruling. He said:
- The new rule provides ecommerce clarity
- Flipkart has always been compliant with the law and is lucky to already be in line with it
To avoid crossing the new lines drawn by the government, the marketplace had its online sellers footing the cost of discounts.
Amazon has kicked off the sales period with the Great Indian Sale from the 8th of Aug to the 10th of Aug. Thousands of online sellers and brands are participating in the sale this year and according to recent reports, the Great Indian Sale has reached a new milestone.
- Large appliances saw a 5x sales growth
- Software experienced a 10x jump in sales
- Kids apparel had a 5x sales increase
Like other marketplaces, Amazon too is preparing for the festive sales season by building a fierce delivery system to keep up with the expected surge in sales this year.
Decelerated growth caused by temporary discounting pause
Marketplace sales began to shrink according to RedSeer Management Consulting compared to previous months.
The fall in sales is a bit worrying say experts in the industry because Indian ecommerce is still in the nascent stage.
A Flipkart executive said this festive season will either make or break the company. But despite the impending pressure of cost cutting, sales growth needs to be back on track.
Those watching the ecommerce market are convinced sales will surge, whether or not discounting continues. They feel the additional services online retail comes with will sufficiently compensate for the loss of online sale discounts.
The Internet and Mobile Association of India (IAMA) stated that Indian ecommerce is headed for growth. At the moment discounts and sales are driving sales growth.
Preparing for the 2016 festive season
With most of the Indian festivals concentrated between September and January, this is when the online sales season starts. Major festivals online sellers need to look forward to this season include:
- Durga Puja
- New years
Online marketplaces have already begun preparing for gargantuan demands with the set up of strategic fulfillment centers. To help you prepare for the sales season we put together a couple of cautionary tips:
Introduce relevant products and pricing
Online shoppers purchase based on their requirements for the season. For example Monsoon sales will call for the sale of rainwear like umbrellas, rain coats, rain shoes and sandals.
Pricing is another factor that needs to be taken care off. If you want to make your products irresistible during the Diwali period, you need to make sure your pricing and discounts are right. A 5% discount on a television set won’t get you as much attention as a 30% discount. However, you need to bear in mind your capacity to provide discounts. You can try offering free gifts too with your product to sweeten the deal.
Maintaining sufficient inventory
To maintain the right amount of inventory during the sales season you need to predict the future. To get a sufficiently accurate number you can monitor your current prices and your current sale trends. What is the demand for your goods? How will lower sales prices affect the demand for your goods?
During the festive season apparel demands surge, especially ethnic formals. If you happen to sell sarees, lehengas and sherwanis stock up on these items before the festive sales begin.
Work based on priority to ensure you meet SLA requirement and prevent delayed shipping. You can also beef up the man power on your end to make sure the right products are packaged efficiently and ready for pick up.
Revisit your listings
Make sure your product descriptions are to the point and informative. Consumers will be in a rush to purchase, so make sure you provide correct concise information. Also make sure your size charts are up-to-date to avoid an avalanche of returns. Product images from different angles will help shoppers make well informed decisions.
Product quality checks
Another way to ensure a good festive sales season is through quality checks. Product quality checks ensure you don’t have defected goods your inventory. This in turn helps you prevent product returns.
Have you started preparing for the ecommerce festive season? How do you plan on making the most of it this year?