Frequent sales & promotions affect long term profitability

In a tête-à-tête with Retailer media, Shitanshu Jhunjhunwala, Director, Turtle Limited - West Bengal based men’s fashion brand, expressed concern over the increasing frequency of end-of-season-sales and weekend promotional offers. In his words, such offers and promotions can offer short term benefits, but will end up effecting profitability in long run.

How do you analyse the market today when a lot of online players are entering into the market?

The current situation is a bit tough for everybody as the market is very uncertain and constant turbulence rising from new phenomenon like online in the market. Before online there were discounted plans which had filled whole market. So something or the other kept happening in the apparel industry in last 7-8 years.

The Brick & Mortar stores to an extent are a hit because the market has obviously shunned before online availability access everything. The product is available to you more closer and in a much convenient manner so the consumer don’t go to a store some kilometers away from their home. This has definitely changed the dynamic of retail so now one seeks to know how you adapt changes and bring new strategies to counter this effect from time to time. Overall the situation is challenging for all the retailers.

What challenges do you face in menswear industry?

This industry has the highest number of players. Me national brands are present only in menswear category so obviously competition is much bigger and tougher in menswear category. For instance if you are selling in a mall and 20 brands have gone on discount or weekend promotion, then you also have to give similar offer because the customer these days looks for good offers. If your competitor is offering similar product at discounted price, then it becomes difficult to compete. Having said that, menswear as a category is very difficult with the cut-throat competition.

Amidst such intense competition, what are the opportunities in this industry?

I think India is a very huge market where no brand has ever reached. The opportunities are ample and the tier II and tier II towns are coming up where brands are creating retail presence by opening retail stores or heading to MBOs.

It is not that opportunities lack anywhere but the only thing is that more sales are happening during discounting season and lesser sales during the fresh season. It has to be a collective effort from all the brands to consciously decrease the number of offers and sales etc. so that profitability remains intact and companies cherish in the long run. All these sale strategy are mainly for short term game.

Do you face any issues while integrating with online retailers?

Our agreements with their retailers are that whatever discounting they give, they do it out of their own expense and we only share with them and keep them sync with the offers we run at our stores during EOSS.

Apart from this whatever offers and promotions the online retailers do, they do it from their own end. We have told them time to time to not put offers during current season and there are certain conflicts which happen with our trade channels and large format stores.

Overall this discounting phenomenon is coming down every season and especially for the current season merchandise the discounting patterns have really decreased. That is a concern but it is diminishing slowly and gradually.

What are your plans to go Omni-channel?                  

In terms of online presence, we are already selling on major sites like Flipkart, Jabong, Myntra and Amazon. And we also have our e-store so we are already present both online and offline. Now the focus is on interlinking and connecting the two. We are working on it but we don’t have any immediate plan of going Omni-channel.

How do you work upon SCM to rope more efficiency into the channel?

Earlier we had certain centers in Pune and Bengaluru. Now we have consolidated all of that to a single entity at Kolkata and all our material passes through there. This strategy has really helped us because it has given us a lot more control, mobility and flexibility. And more and more logistics players are getting evolved because they are handling online channels and delivering to a much larger set of consumers. The lead time, the reliability of delivery has all has improved and we are able to concentrate on SCM in a much better way.

Millennial youth believes in instant gratification. Have you taken steps to meet their needs?

We have a set of offline stores where one can buy instantly but for online we ship from warehouse via air. So wherever there is air connectivity, we are able to deliver within one to two days. But as far as instant delivery is concerned, I think that has a long way to go for us.