"All our creativity has been around offers rather than imagery," admits Jay Gupta, managing director, The Loot. He adds, "Everything we do is for sales. If the brand gets created around that, so be it." Over the last year, this seems to have become the doctrine of not just value retailers such as The Loot, but a statement of intent which almost every player in the garment industry swears by.
The signs were there for all to see and came on earlier in 2008 - clothing brands across segments advertising discounts in excess of 70 per cent in some cases. In many stores, these signs have never really been taken down and only slightly modified through 2009.
& #BANNER1 & #The recession has been a great leveller. Premium offerings are the worst affected, coming on the back of 25-30 per cent growth over the last three or four years. While global bosses, on periodic visits to India, keep cautioning about the ill-effects of discounting on a brand's equity, there are not too many takers this time around.
Shripad Nadkarni, marketing consultant and founder director, MarketGate, observes, "Given that the entry barriers are low and it's easy to distribute brands, there was a huge amount of oversupply. Retail was the first sector to be hit by the slowdown, especially garments since they are in the 'can do without' category."
New store openings have gone off schedule and marketers frequently find themselves with more stock than they know what to do with. A milder than usual winter in many parts of the country left a lot of season-specific merchandise gridlocked.
As a result, over the last eight months or so, prices, or more specifically price-offs, have become a key plank of communication. Not too many marketers are willing to go on record about either their strategies or their performances over the last year. However, one hears of brands that start off with a price tag of Rs 2,000, and go on to offer a 40 per cent discount on an existing 50 per cent price cut, reducing the effective cost to about Rs 400.
Marketing consultant Jagdeep Kapoor of Samsika sees in this an example of the herd instinct in the garment industry. "They are focussing on the bowler (the competition) and not the ball. Specific brands will grow, but not the industry," he says. There is, according to Nadkarni of MarketGate, a way to soften the blow a price cut has on the brand — by giving the consumer a reason, such as a brand's anniversary or some such artificial milestone. However, there's scant evidence of such tactics in use. Besides, the sheer longevity of some of the sales would render them futile.
Marketers and consultants alike are in agreement that brands simply cannot afford to have price as the only plank for communication. Nadkarni of MarketGate, says, "Each consumer has a set of brands in his consideration list in garments - it's the one category where they don't generally opt for a single choice. It's within this set that they look for the best deal. Being considered requires a good proposition."
This is one of the reasons why Peter England, with its mid-range positioning, seems to have had less of a rough time through the recession. According to Aloke Malik, president, Peter England, the brand has grown 25 per cent in the financial year 2008-09 and maintained its trajectory even through the last couple of quarters, which were particularly tough.
At Madura Garments, the focus this year will be on strengthening core brands in different consumer segments - a casual and evening line under Allen Solly; women's wear and the V Dot range for Van Heusen; and the LP sub-brand for people who find Louis Philippe too formal. The investments in marketing communications are higher than they were the year before. Peter England has more ambitious plans of launching a club and evening wear range, which will nevertheless be consistent with the brand's positioning and it doesn't foresee a change in ad spends.
One brand that's benefitted from the rampant price cuts is not a clothing brand at all, but value retailer The Loot. Footfalls went up by 15 per cent and same store business grew by 25 per cent. Established brands sold a wide range of merchandise to The Loot at very competitive prices and Gupta states that the savings were passed on to the consumer through widely publicised 50 per cent price cuts and 'buy two get three free' offers.
It's obvious that the iconic advertising and imagery of premium clothing still drives people. However, in a downturn, it appears to be driving them to value retail formats, where they can choose among a wide range of brands at a significantly reduced outlay. Gupta of The Loot adds, "Consumers are looking for a product at their price. A good brand at a high price won't work, but a good product at a good price does well - it could be branded, unbranded or a private label."
Premium brand owners do not seem too concerned about the effect of such franchises. They see the sort of consumer who visits a value retail store as being far removed from their regular patrons. Dikshit of Madura Garments, states, "Consumers walking into a discount outlet are more mass market and looking to access brands at a lower price. These stores have a complementary role, getting consumers in. A very rampant expansion and large distribution through this format can have an impact," he says.
Peter England's Malik is significantly less concerned. He says, "The fresh stock is available in our stores and the consumer can easily tell the difference. What you get in a place like The Loot could be a design that's not as fashionable or a colour that's not as trendy as it was two seasons ago."
Gupta of The Loot, on the other hand, observes, "We get a range of customers, those who step out of Mercedes as well as those who ride bikes. Because of the stock market crash, we see many more Mercedes stopping by at The Loot these days."
The jury is not out on when exactly the industry is likely to get back on track, and when the fleet of Mercedes will return to patronise the high street brands almost exclusively. While some believe salvation is at hand around Diwali, others like Gupta do not see things improving before January next year. In the meantime, the sales continue apace, giving the few people blissfully unaffected by the recession a great chance to stock up on several wardrobes worth of new clothes.