E-tailers and retailers lock horns for fireworks in festive skies

The aggressive thrust from e-commerce players has forced retailers to up their game this festive season with discounts, partnerships and increased ad spends. Consumers are not complaining

e4m by Ankur Singh
Updated: Oct 21, 2014 8:11 AM
E-tailers and retailers lock horns for fireworks in festive skies

With Diwali just around the corner, and the festive season peaking, brick-and-mortar retailers are leaving no stones unturned.  Acknowledging the fierce competition from e-tailers, individual and wholesale retailers are sparing no stone unturned to lure customers. They are advertising as heavily as they used to earlier. To top it all, this time round, they are also “logging in” on the net to compete neck-to-neck with the new league of e-tailers.

Future Group and Amazon India have formed an exclusive partnership to sell the retail giant’s merchandise online, the companies announced last week. The group operates some of India's biggest retail chains including Big Bazaar, eZone, Brand Factory and Home Town.

This alliance is further evidence that traditional retailers are locking horns with e-commerce players rather than resisting them. Croma, the electronics chain owned by the Tata Group, signed a similar agreement with Snapdeal.com last month.

While e-commerce companies still constitute a small part of the overall retail pie, brick-and-mortar players are being forced to up their game to prevent consumers from giving up on shopping from physical stores altogether. Retailers are spending marketing money with a hope to benefit as consumers spend in an economy that is looking up.

Falling Footfalls?

Despite drawing a lot of criticism, Flipkart’s Big Billion Day sale helped the e-commerce player achieve a target of $100 million in gross merchandise value in 10 hours. Snapdeal also said it sold lakhs of products on the day, and made sales of more than Rs 1 crore a minute.

To this effect, industry body, Assocham, recently released a survey stating that online shopping may increase by 350 per cent during Diwali, and will see a likely decline of 50-55 per cent in footfall in malls. “This festive season, shopping on ground has taken a back seat. Apart from convenience, rising fuel price, security reasons, online discounts and availability with abundance of choices are keeping consumers indoors,” the Assocham survey stated.

Not So Much!

To make things interesting, doughnut chain Mad Over Donuts is attempting festive innovations. The company has introduced doughnuts that are topped with traditional Indian sweets like Gulab Jamun, Boondi and Kaju Katli, etc.

Big Bazaar is also adopting an innovative approach wherein every customer will get a shopping card that can be used at any of its outlets and can avail cash back that can be encashed for shopping at any of the group's retail chains such as Big Bazaar, Food Bazaar, Central, e-zone and Home Town, among others, for the rest of the year.

With electronic brands showing their distrust in e-commerce players, buyers are reluctant to buy these products online.

Landmark Group’s Lifestyle stores are offering extravagant discounts on shopping of over Rs. 2500.

According to market reports, Sony India expects to benefit from the festive season and said it is targeting sales of Rs 5,100 crore between August and November 2014, up 25 per cent from last year. The company said it is spending about Rs 250 crore to market its festive season campaign. Free products such as smart watches and PlayStation 3 gaming consoles are on offer on various purchases.

Similarly, Hewlett-Packard has launched exclusive offers that will be available at the company's 'HP World' stores across India, channel partners and its own e-commerce portals. Voltas is also expecting a double-digit increase in sales this festive season, say market reports.

Advertising frenzy

Amid all this competition and festive craze, one thing that is a spectacle to watch is the advertising war that is taking place all over the media. From e-commerce players, to brick-and-mortar retailers, to individual brands, all are out to grab the buyers’ attention.

This weekend saw jacket ads, fresh TV ads, and online-first festive video launches from all players out to make the best of this festive season.

The festive season will come to an end by the next week. Only time, and company balance sheets will tell who wins the tug of war between brick-and-mortar and e-commerce players. But, one can safely say, amid all this festive trade frenzy, the consumer is already the winner.

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