Festive Schemes: Viagra for Retail

Demonetization and GST put a spanner on desktop and laptop sales; will festive schemes impact a turnaround?

Till few years back, finding branded PCs or a loptop in tier-2 and -3 cites was nothing less than a novelty. If a person wanted a laptop from brands like Apple, Lenovo, Dell or even HP, he had to travel not less than a few miles to get his desired laptop or PC. And if some problem cropped up within a few days of purchasing; it used to take at least a month or two to get those problems resolved fully. But today in this world of hi-tech 2017, where companies are competing to make diameter of the world small everyday; the reach is no more a constraint for any IT company. Today, all branded PCs, laptops and mobiles are available in so called smaller markets.

This decent availability of IT products in every corner of India, the challenge always remains to attract more and more footfalls in the retail counter. One the other hand, when the festive season starts, the fight gets double between retail partners and e-commerce companies to attracts more and more customers

Retail Market is attracting customers with schemes launches this festive season. Retail Partners and vendors are all set to capitalize on festive bonanza by several discount and free/assured gifts offers for end users. However, it would be interesting to know whether festive schemes are turning good or not in terms of sales and revenue. Channel partners who are biting their nails on unbelievable discounts and offers by E- Commerce companies, have something to comment on festive schemes.

Retail Market in North India

Talking about the Retail Market in Delhi, there are approx 3000 retailers in Delhi. Partners and dealers help market to deliver powerful solution and services to customers while speeding the revenue which also open more doors, close more sales and market share.

Delhi based SSDN Technologies headed by Himanshu Gupta deals in consumable and Hardware such as Laptop, Desktop, Mobile etc. Heading 3 outlets in Delhi, Vishal says, “Schemes help us to capitalize the opportunity of festivals and to increase the sales of products”. With this festive season we are expecting a good growth although there is a downfall in the market around”.

SSDN Technologies always launched several schemes many festive schemes. The upcoming festive season, Company is bringing extended warranty schemes, which is primarily driven by Vendor and also so many shopping vouchers, O%EMI scheme and damage warranty. The core objective of these schemes is to capitalize this opportunity of festivals and to increase the sales of their product .This year expected growth is around 20% to 22% for this month with the introduction of festive schemes.

Talking about the average foot falls, SSDN have average footfalls of 100/ day which increase 30% during the festive time. “At the time of festive season, we have around 60-70 unit average closer per day” Vishal added.

Another Retail Giant, Future IT Zone based in Ghaziabad has variety of multiple brands in Laptop and desktop majorly deals in Acer and Dell. Owing 2 showrooms in Ghaziabad and Sahibabad, Future IT has brought lots of attractive offers for Customers.

This festive season, Company is offering its own festive scheme of free accessories with every purchase of unit. One the other hand, the vendor’s scheme includes extended warranty.

Tarun Kumar from Future IT zone said, “We earned only customers and thus we have widest range of products.  Schemes really help in generating sales and also increase customer base.”

According to the company, the sale of laptop and desktop has increased as the foot falls of business personals increased. “Now every business person has to file the tax every month that causes the increased demand of laptop and desktop. We hope this festive season, the demand will go up”.

Talking about company’s marketing and branding strategy this festive season, Tarun added, “My strategies are very different from others. I prefer the festive seasons to advertise through flex boards, holding and outdoor activity, and heavy discounts during festive seasons.”

Chandigarh is one of the biggest retail markets that open the doors for all major cities to Punjab and Rajathan.

Sahil owner of Chandigarh based Prem Sons says in a world of neck to neck competition, festive schemes are essential to retain customers. However, overall business of partners remains same. Only thing is such offers help them to close orders early.

Dealing multiple brands in laptop, desktop and mobile including Apple, Prem Sons offering attractive schemes on this festive season. The retail outlet attracting customers by offering 2 year extended warranty, coupon vouchers and free accessories.

During the festive season E- commerce companies also attracts more and more customers in their platform like Amazone’s The Great Indian Sale and Flipkart’s The Big Billion Sale. As a major shift of customers towards online, there are many retailers who are not only restricted to offline.

Keeping this in mind, Prem Sons also deals in online as they sell through PayTm. Adding into the same, Sahil said, As we all know, who e- commerce companies are dominating in retail market in every sector. We are sell through PayTm that gives our product maximum reach and visibility.”

Another retail outlet in Chandigarh Simit Technologies led by Chug, has brought the special gift package for customers in this festive season. In this package customer will get the combo packed with Wireless speaker, mouse, headphone and cleansing kit with every purchase of unit. Simit Technologies, who deals in 2 major brands HP and Canon have wide range of laptop, desktop and printers.

With 1k footfalls and 500 average deal closers every month, Simit Technologies is targeting 20% growth in this festive season.

“The offline retail market is now coming back on the track; we are focusing to increase the sale in this festive time. With the help of advertisement in news paper and outdoor branding, we enable our reach within the customers”, Chug Said.

Retail Market in Eastern India

Although a newly launched their 3^rd Showroom in Siliguri company in the north Bengal channel partners list, Sri Rathi Retail has come a long way, registering an excellent growth of 30% in the retail segment and securing its revenue at Rs 20 crore from retail alone. Part of the Rathi Commodities group, AOC, Intex, Sharp, iBall, Transcend and Enter have been some of the revenue earners for the company but Dell, HP, Samsung, Acer, Gigabyte and Asus continue to feature as the retail priority for the company.

Rajesh Rathi, Owner, Rathi Retail said, “ Indian customers are pushed by festive offers. It is a normal tendency of customers to buy electronics products during festivals. Festive schemes do help to something additional but partners do not get much from it. However, festive offers do help partners to connect with more customers.”

Rathi Retail has brought assured gift for everyone who purchases any unit from the outlet. “We want to make everyone happy on this festive time as we are offering assured gift for everyone who walks in our outlet and purchase anything from it.”

Arun Kumar Dey , Director of Computer Professionals says big vendors like HP, Dell, Lenovo announce offers directly for end users during festivals like Diwali. These schemes might be beneficial for customers if they get extended warranty but partners hardly gain something out of it. Partners do not get anything from festive schemes. Majority of partners discount the schemes. They do not get extra in terms of revenue. Even I don’t think that these schemes benefit end users unless they give extended warranty to them.” festive schemes do increase their sales during festivals.

The company deals in HP, Acer, Asus, Lenovo and Dell. They have the wide range of Laptop, desktop. Company sells 200 average units in a month with nowhere online presence. Arun Dey is offering the extended warranty with 1+2 years. Apart from it, they have also free gift voucher and goodies for the customers on every purchase.

Having 1 outlet in Cuttak, Computer Professionals focusing in SMS and Whatsapp marketing strategy to get the maximum  visibility within the customers.

Retail market in South during Festive season

Ravi, Owner of Vijaywada based Computer Point says that big vendors like HP, Dell, Lenovo announce offers directly for end users during festivals like Diwali. These schemes might be beneficial for customers if they get extended warranty but partners hardly gain something out of it.

“Schemes are very important to create partner excitement and offer avenues for improving sales. We are providing power bank as a complimentary gift on purchase of any unit this festive season to their customer and on the other hand it is running special incentive scheme for partners on certain sales target achieved” ravi said.

As power bank has become a necessity because it is always used to charge smartphones on the move and it is a must have gadget in this age. Bringing these kinds of attractive offers for the customers to boost the sales of channel partners and help them in achieving their targets.

M Selvaraj from PC World, Madurai says that festive offers are good in terms of accelerating sales, however, vendors should keep their schemes simple.

PC World expecting an increase of at least 4 other than normal in sales this festive season. While schemes such as incentives, gifts impact the overall volume positively. The products and solutions, on which the schemes have been built, need to have a strong value proposition.

“Vendors should come up with good warranty schemes. There should be easy registration to avail offers. Most of the times customers are not aware of such schemes, he added”

According to the company, reseller educates customers but festive schemes do not impact our turnover in terms of revenue. On the other hand if any customer does not get services as promised by vendors they get angry on us. Dealers are not interested in schemes as they do not have any direct role in it.

Retail Schemes in Western India

Samir Mehra, owner of Mumbai based Computer Corner said, “The festive spirit is in the air with Durga Puja, Dussehra and Diwali just around the corner. To make gifting and shopping even more special for our consumers, we brings its mega Diwali celebration offer promotion, another compelling reason to celebrate this season of cheer. The primary objective of this special festive campaign is to engage with consumers at the ground level and strengthen our connect to the customers.”

Part of the Computer Corner Viewsonic, TP Link, LG and all range of Computer LCDs has been some of the revenue earners for the company.  This festive season, Vendors has brought lots of schemes like Dell’s back to school and warranty extension on laptops.

Owing 1 outlet at Laminton Road, Samir Mehta and his company don’t deal with any online commerce company. However, earlier he used to work with online companies.

“Now the customer are again shifting towards offline channel as customer want to satisfied himself with the quality, genuine products and the after sale service. The offline market is the place where a customer gets all of these but at the online customers have face these issue so market is shifting again towards offline,” he added further.

Talking about its promotional activities during the festive season, he shared that “A strong advertisement and marketing strategies plays an important role in growth of any organization. We are very active in Print and outdoor activities. That gives us to maximum opportunity to reach, promote our company to our customers.”

32 years old Mumbai based retail partner Cassette world has 2 outlets in Mumbai. Company has a broad portfolio of products like Laptop, desktop, printer, scanner, Graphic cards, and accessories.

According to Majid, owner of Cassette world, They don’t believe in schemes and offers. As company assures their customers with the genuine products with good after sale service at reasonable price.

“We are in the IT retail from past 32 years. As our customers knows us very well. We sell genuine products and believe of our customers take us to the success in terms of revenue” he added.

Online portals Grabbing customers?

Azharuddin Tamboli owner of Pune based Notebook Hub says festive offers are beneficial to customers, however, vendors and distributors should market their schemes in proper manner.

“Despite retailers give better offers to customers they go to online portals. That’s hampering our business. Vendors should make customers aware about their schemes”, he said.

It can be concluded that though majority of partners do not see festive offers a major motivation for business turnover but festive schemes do encourage end users to lighten their pockets. In a scenario where there is slow down in the industry, festive season can be a driving force for end users to rush the stores. Considering fears of channel about marketing policies of online portals disrupting business of dealers, vendors should educate partners and assist them to promote their schemes among customers.

What is limiting volume growth of retail market?

There is no denying that the presence of LFRs has created greater competition, and the Indian IT retailer has to find ways to evolve and sustain it.

Heman Shah from Care office, Ahmadabad shared his views and said, “Although, we earn 60% of our overall revenue from our retail business, the presence of LFRs like Reliance Digital and Jumbo in this space incurs a loss of about 10% to us. And, we are striving hard to get rid of these losses.”

Samir Mehta from Computer World Mumbai said, “LFRs and non-IT retailers (TV brands like Toshiba and Lenovo), who have got into the retailing business of laptops of their respective brands, are affecting the conventional IT retailers like us. This caused a setback of about 10-15% for the traditional IT retailers like us. We retail community has to take out new schemes for customers on festive seasons to defend these LFR’s.

Though majority of retailers see festive offers a major motivation for business turnover also festive schemes do encourage end users to lighten their pockets. In a scenario where there was slowdown in the industry but after GST, the demands of PC’s and laptops has increased, festive season can be a driving force for retailers and also end users to rush the stores.