EOSS A Double-Edged Sword

High inflation has forced the customers to wait for EOSS to grab their favourite merchandise. This is a golden opportunity for retailers as well to clear up their stocks and make room for fresh arrivals; and to witness increasing footfall in a short span. 

Kabir Lumba, MD, Lifestyle International, says, “The EOS sales will continue like before, but the discounting will be less than the previous season, as the inventory position is better.”

Sumit Dhingra, Business Director – Bridge to Luxury Brand Division (Nautica and Gant), says, “Our discounting would be for limited period and we are not offering discount on those categories which would be carried for the next season.”

However, retail consultants hold different opinion. Harminder Sahni, MD, Wazir Advisors, a retail consultancy firm, believes that most brands would push their sales as they don’t want to get stuck with unsold stock.

Going beyond stock clearance

EOSS is not just about making room for fresh arrival – its advantages are manifold, only if retailers get it right.

Anurag Rajpal, Director and CEO, The American Swan Lifestyle Company, says, “EOSS helps retailers attract the customers to view
and purchase their collection. On the other hand, it helps customers get merchandise at a discounted price.”

Agrees Salesh Grover, Business Head, OSL Luxury Collections. “EOSS is a great medium to feed the customer database,” he says.

As a result, shopping malls gain higher footfall during this period. Rajendra Kalkar, Senior Centre Director, High Street Phoenix, shares, “The footfall escalates 20 to 50 per cent during EOSS.”

Can EOSS dilute brand identity?

A recent report by Capillary Technologies highlights that offering higher discounts does not seem to be the right path, as retailers would never gain loyal customer base. Where some retailers offer discount more steeply or for longer periods than necessary, essentially conditioning consumers to wait for their sales, and thereby doing irrevocable damage to their brands; others will fail to convert new customers, it says.

Best practices to maximise from EOSS

Here are some best practices that can help retailers in maximising from EOSS:

•Treat different customer segments separately

       Brands often fail to treat their loyal customers and new customers differently. The most important factor to determine EOSS preview success is the right audience. Based on loyalty scores or revenue, 8-10 per cent of customer base should be given the first piece of cake. They are the ones who should be rewarded and treated as royalty before anyone else.

•      Identify the local market

       Loyal customers are the most treasured assets of a business, and must be made to feel they are top priority. Acquiring new customers costs about 5-10 times more than advertising and offering the right incentives for existing customers to
buy more.

•      Retaining and selling more to existing customers assures higher profitability for the retailer.

•      Choose the right product
to stock

•      While most retailers look to liquidate outdated stock during season sales, it is important to offer customers what they like to buy. Different retail stores experience customers with different styles, the key to winning customer loyalty is wisely rotating stock in various stores and offering the right products to the right customers. This assures profitability for the retailer and customers’ interest in products being offered.

Earning Strong Revenues

The sale period is most crucial in the retail business, as retailers’ revenue move up during this time.

Radhesh Kagzi, President, Fusion Beats, points out, “Our sales doubled during EOSS last year and we expect the same this year too.”

Likewise, Deepak Aggarwal, MD, Kazo Fashion, shares, “During EOSS, we experience 10-15 per cent rise in the revenue as compared to pre and post sales period.”

Catwalk is also expecting a higher contribution of EOSS in revenues in comparison to last season. “We predict it to increase to 24 per cent this fiscal from 22 per cent in FY’14,” says Asif Merchant, MD, Catwalk. Manish Mandhana, MD of Mandhana Industries (Being Human Clothing), says, “This EOSS, we expect a sale of Rs 25 crore.”

Abhishek Ranganathan, VP, PhillipCapital India, highlights, “The contribution of EOSS to top line was increased to 23-25 per cent in FY’14 from 17-18 per cent in FY’13.” The company is also expecting higher sales this year as well.

Clearly, EOSS is a win-win exercise for retailers as well as customers.