Retailers anticipate strong sales growth this festive season, both online and offline
The first few weeks of the festive season indicate that brick-and-mortar stores are experiencing as much of a sales bump as e-commerce and quick-commerce platforms. The allure of visiting a store to pick up clothes, sweets, gadgets, and gifts remains strong.
Pushpa Bector, Senior Executive Director at DLF Retail, states, “This season seems promising for all respects, and we anticipate double-digit growth compared to last year. Last year, the Mall of India touched ₹260 crores to ₹270 crores in sales during peak months. This year, we hope to see around a 15% increase. Consumer trends show that commodities requiring no planning have shifted to quick commerce. Retail is taking an interesting turn toward experiential nature, with food and beverage doing well.”
As always during the festive season, the customer is king, and the options are plentiful. According to e-commerce tech firm Unicommerce, order volumes were 20% higher in the first four days of the festive season this year than a year ago. Gross merchandise value (GMV) also increased by 24%.
Clothing and fashion accessory stores, both online and offline, have seen the highest footfalls, with sales jumping 32%. Notable increases in volumes include travel accessories, watches, and kids’ apparel. Make-up products have seen a 54% year-on-year growth during this period, while the health and pharma segments have clocked a 33% growth.
Experts expect this momentum to continue as the festive season progresses. Naveen Malpani, Partner, Consumer & Retail at Grant Thornton Bharat, notes that online sales are driven by deep discounting and convenience, posing a challenge to traditional brick-and-mortar stores. However, both formats are expected to coexist, as brick-and-mortar offers a unique experience.
“In 2023, consumer durables in brick-and-mortar stores have shown growth of nearly 15 to 20% compared to online purchases. Additionally, the demand for luxury premium brands is pushing brick-and-mortar sales, as approximately 40% of consumers prefer to physically experience high-end products before purchase. Overall, there is enough space for both online and brick-and-mortar retail,” he said.
Malpani anticipates the online market to reach about $22 billion, with festive season sales expected to achieve a GMV of around $12 billion, reflecting a growth of 20 to 25%. Brick-and-mortar high street retail sales are projected to increase by 10 to 12% annually, although segments like beauty products may see slower growth in the single digits.
“Overall, we expect FMCG and consumer durables to experience decent growth of about 10 to 12%,” he said.
According to Swagata Sarangi, Co-founder of Smytten, the rapid growth of online festival sales presents a challenge for traditional stores but is not an outright threat. Instead, it’s an opportunity for both channels to evolve. Malls and high streets are innovating and collaborating with online counterparts to stay relevant.
“What we are seeing is a convergence, where physical stores are adopting digital strategies to enhance their customer engagement through “click-and-collect” models, exclusive in-store offers, and immersive shopping experiences that complement online efforts. Malls and high streets are not being replaced but are being forced to innovate and collaborate more with their online counterparts to stay relevant,” she added.
Last year, a remarkable surge in consumer spending during the festivals was winessed, enabling around 50% growth compared to the previous year. This year, Sarangi anticipates a similar upward trajectory, expecting another 40-50% growth across both business avenues.
The festive season of 2024 shows promising signs for shops and e-commerce platforms, as customers eagerly await the traditional discounts and offers. With indications of a successful festive period and a robust wedding season to follow, store owners, retailers, and online vendors are hopeful that this momentum will continue and remain resilient against disruption.
