BIG EVENTS – WHAT’S IN IT FOR RETAILERS?
Traditionally, customers in India used to wait for the festive season to make bulk purchases and indulge in premium purchases. Today however, shoppers are not limiting their enthusiasm to festivals alone but are also making bulk purchases at events created by retailers around national holidays like Republic Day, Labour Day and Independence Day—we are calling them ‘Big Events.’ Such events are attracting new shoppers and ensuring that organised retail remains firmly entrenched in the minds of the urban shoppers.
Indian consumer packaged goods (CPG) market for the year ending June 2016 grew at 7%. However, Q2’16 witnessed the slowest CPG growth for traditional trade while modern trade has seen a revival.
Modern trade, unlike traditional trade, has the advantage of running big events/sales that entice and spur consumer spending especially during slowdowns. The greatest benefit along with being a one-stop-shop is the fact that modern trade is able to give better offers across categories that aid customers in their everyday lives. In tight economies, where saving is critical and the consumer seeks greater value at a lower or same price, modern trade comes to the rescue through such big events.
Today, event sales contribute to 955 crore in modern trade (for the year ending May 2016), accounting for nearly 17% of total fast-moving consumer goods (FMCG) sales. We also see an 8% growth in sales during events as compared to previous year.
While festivals and holidays occur throughout the year in India, the second half of the year is widely considered the festive sales period, as it fits in nicely with a lot of celebrated holidays. The retailer created week-long Independence sale event which is designed around the Indian Independence date of 15 August, makes around INR 190 Cr in sales compared to an average event sale of INR 142 Cr, designating it as the biggest sale event for the year.
Growth Drivers For Big Events
We have broadly identified three key questions retailers must ask themselves to help them in their growth path. Chances of success are greater if they continue to leverage this path.
- WHERE – Which markets to tap into having higher growth potential?
- WHAT – What categories to focus on during Big Events?
- HOW – How to scale up revenues by maximizing on volume?
The retail environment today sees constant and intense competition. Every retailer wants a high share of the customer’s wallet. For retailers, big events represent a big sales surge; therefore, accessing the shopper spend becomes most important as it will bring a jump in the GMV (Gross Market Value) and enable higher customer acquisitions.
The edge that modern trade has over general trade at this point in terms of convenience, proximity and promotions can be leveraged to ensure that greater business and growths can be juiced for this format in the future as well. Big events are an ace in the modern trade retailer’s pack, which they need to harness better to truly stand apart from the crowded general trade market.
For more details, download the full report (top right).