Chennai
Between mid-July and mid-August, the entire state of Tamil Nadu, and Chennai in particular, turns into one big bazaar where discounts are increasingly offered across almost all retail verticals, along the lines of the Dubai Shopping Festival. Of course, the Aadi discount sale is comparatively an older phenomenon, and one can say it all began with the inception of the post-liberalisation era.
It began in a small way, with a few retailers offering a discount that caught the eye of an ordinary, middle-class man. Gone are the days when only a handful of retailers put up the discount sale board. Forty years ago, we were a monopolistic regime where only two or three players represented a sector. Today, we’re in the era of free enterprise, and there is no such exclusivity at play in any working sector. By the turn of this millennium, that is 2000, the concept of Aadi sale has grown into a mammoth business, with revenue running into approximately over Rs 2,000 crore, in the 30-day period. Considering that traditionally, people do not move houses, hold house-warming ceremonies or conduct marriages in that time frame, the huge sales figure is staggering.
Today, it is not uncommon for even those in the beauty sector to come up with attractive Aadi offers. According to an industry tracker in 2014, retail sales averaged at Rs. 100 crore a day, and this excluding the mobile phones market segment, in Chennai alone. In 2015, it went up by about 10 per cent. The shopping events give rise to an expectation of bargains and hence buyers defer their purchase decision to wait for the event. It can, therefore, be argued that what is witnessed here is a pent up demand — an accumulation of deferred decisions being made.
The Aadi sale seems to have an appeal for different economic strata — going by the type of goods that are offered on discount. The reason for this spectacular change is due to marketing, and the innovations that retailers have introduced into Aadi sale. This in itself is made possible due to efficiency in business practices and greater production values at play. These have created a scenario for better and higher growth, while at the same time crowding the market place. This in turn has made our regular sales and marketing people to innovate and usher in peak sales by taking the ordinary, everyday event into an extraordinary one.
Look at how we all celebrate Mother’s Day, Father’s Day and Parents’ Day. People spend days trying to think the most novel, innovative or touching gift to give on that particular day, even if parents and children do exchange gifts on other days in a year, such as birthdays. Even though you see your friends daily it has become important to come up with the perfect gift on Friendship Day. Similar is the case with Akshaya Tritiya, the day of shopping for precious metals as a harbinger of good things. These special days may have had their origins in a marketing man’s innovative way of pushing a product during a dull season, but that small experiment has now snowballed into a huge socio-personal exercise.
Interestingly, while no domestic events are planned by Tamils this month, Aadi is considered to be auspicious in many ways, and people believe that observing the rituals will usher in beneficial results, and that belief appears to have rubbed off onto shopping as well. You take an idea to people, a least ten people in a small crowd would get hooked to the idea. After all, until a few decades ago, people world over celebrated only Christmas or Eid or Deepavali and Pongal, apart from wedding anniversaries. Sales like these have changed all that and given people more reason to indulge and invest in their lifestyle needs.
What is also fascinating about Aadi celebrations, is how cultural factors come into play. Even foreigners living in the state have become curious about it after sustained marketing campaigns. Recently, a couple of them held long discussions with me on this and I am told that many of them are interested enough to go out and get a first hand experience of what the Aadi brouhaha is all about.
Clearly, people have got into the habit of buying during the special month. What happens when such a festive mood sets in? Typically, constant seeding of supply in the market could theoretically end in over supply at a certain point of time. This helps retailers to mark down cost and push the product out. There may be some fears that retailers mark up the price and then offer a discount during Aadi. I do not believe that to be the case everywhere. Many established brands give genuine discounts, especially in the apparel and clothing sector.
It is not easy to fool customers today since they are all well armed with information. They can compare quality, price and deliverables very easily, thanks to Google and other search engines. What was creating the profit before the advent of the internet was that information was a closely guarded secret, and customers were clueless about competing products, services and sale price. People also merely went by the traditional, tried and tested brand image. In the late 1990s, if one wanted to buy a special gift for a man, a HMT watch was a safe bet. And then Titan watches came along, offering people more designs to choose from. Today, people can go online and check the details regarding product information, price range and availability on Amazon or Flipkart or Snapdeal. There is very little scope for misinformation and retailers will not risk doing anything that could ruin their reputation.
With the lower income group working hard to get where they aspire to be, (improve their life and lifestyle), Aadi sales will continue to grow, because it is simply a good idea, and good ideas will flourish. However, they do need innovative interventions at regular intervals. I foresee retailers opting for more bundling of products — where a new product would piggyback on an older, trusted one. I would think that retailers are ideating on second and third level innovations so that Aadi sales retain its unique place as a mid- year mega sale, just ahead of the peak shopping season which is between September and March in India, when between 60 to 65 per cent of annual sales targets are set and met.
—The writer is faculty, IIM Ahmedabad and executive director, Kavithalaya
Visit news.dtnext.in to explore our interactive epaper!
Download the DT Next app for more exciting features!
Click here for iOS
Click here for Android