Seen against the back drop of FDI in Multi Brand Retail being debated and eventually being passed by both houses of parliament, the retail industry has had a challenging year and it is going to be more challenging in 2013.
The year opened with most retailers announcing their “Sale” from the first week of January itself. This could mean two things – they did not meet their year end sales targets and are carrying more merchandise than they would like further the new stock has started arriving in their warehouses and that they need to liquidate their old stock.
The other more charitable explanation is that Indian retailers are learning quickly from their Western counterparts, who also go on sale in January. (Westside however have always started their Sale in early Jan)
Harrods has been going on sale from 1st January itself when people que up outside the Knights Bridge store straight after the New Year celebrations and are served tea and sandwiches by the Harrods management.
No Chai and Samosa for the Indian customers, but they are lapping up the generous discounts being offered by the retail stores.
Let’s get back to why retailers need to go on Sale.
Merchandise is bought by humans who have the difficult task of forecasting demand six to twelve months before the season begins!
Many of them however, hide behind their computers and do not visit the shop floor to interact with their customers or sales associates. They and their companies pay a heavy price for their arrogance.
Life as they say does not go as per plan. Retail sales in South Delhil saw a dip in business because of the tragic incident (16 Dec onwards). Retail Sale also reflects the mood of the people.
So while it is almost impossible to forecast such incidents and the mood swings of the people, technology has been evolving and analytics can, if used sensibly, help retailers better forecast their requirement and thereby reduce the huge quantities of unsold stock at the end of the season.
What then is Analytics……see my blog next week.
Ashish J Sanyal, AMP Retail
Image Credits: topnews.in