Retail ecosytem gets ready to capitalise on $9 bn festive sales opportunity

Festive season sales: Everyone, from sale point to back-end support services provider, is gearing up to grab its share of the pie

It is not just Amazon and Flipkart which are preparing for a bumper festive season sale. With festive sales expected to reach $9 billion of gross merchandise value (GMV), retailers and back-end support services providers are all gearing grab a piece of this pie.

Take the case of B2B commerce platform Arzooo, which has over 500,000 small and medium retailers. Almost 20,000 stores across 18 cities in India leverage Arzooo’s platform. The tech platform allows retailers to purchase electronics at the best price without the hassle of maintaining an inventory. This in turn also allows retailers to compete with online sales.

“We have seen a 4x jump in registration of sellers on our platform in just the August-September time frame. Most of the retailers have already started to ramp up their product portfolio. In the last two weeks we have seen a 22x jump in BAU that we see at this time,” added Khushnud Khan, co-founder and CEO, Arzooo.

Khan adds that when it comes to electronic sales, this festive season looks different. “Generally TVs constitute 55-60 per cent of the sales during festive season, but this time around we have seen a shift as demand for big ticket appliances like washing machines, refrigerators and others are going up. This time around 50-55 per cent is large appliances,” he added. These insights were part of their ongoing World Electronics Days sales festival. Anticipating bigger spends from consumers, Arzooo has announced the launch of Arzooo Credit, through which the company is offering a credit line of Rs 300 crore to smaller retailers.

Consumer durable retailers get credit ranging between Rs 5 lakh and Rs 20 lakh as unsecured working capital. 

Arzooo Credit is slated to be distributed to merchants across tier-1, 2 and 3 cities, though about 75 per cent of the credit is being disbursed in Tier-2 and 3 cities. 

Dussehra and Diwali are the two festivals when retailers (offline) see almost 30-35 per cent of their sales happening. Though online shopping is catching up offline sales still constitute 70-75 per cent.

This anticipation of a bumper sale online as well as offline is also evident among delivery partners. Delhi-based last0mile delivery firm Pickrr is expecting a 2x surge in daily order volume as we enter the festive period. Online sellers are opting for Pickrr Plus fulfilment to help them deliver products to their customers within 24-48 hours. The company has registered 3x spike in daily orders in 2021 and the volume on it's platform continues to grow steadily.

Rhitiman Majumder, co-founder of Pickrr, told Business Standard that realizing the need of sellers and D2C brands the company has rolled out a festive offer where they only have to pay Rs 5 per order for a complete fulfilment solution along with a promise of 24-48hr delivery.

“Brands can now focus on sales and marketing, drive volume and leave end-to-end logistics to experts at Pickrr. From inventory forecast to packing and shipping, all will be done by Pickrr's experts. We use advanced technology and algorithms to bring efficiency in logistic operations and reduce RTO by 2-3 per cent, which has a significant positive impact on the bottom lines. Another exciting offer for sellers is 2000 Extra Wallet Credits on wallet recharge,” he added.

Pickrr currently has about 25 delivery partners on board and offers shipping to 29,000+ pin codes and 220 destinations across the globe. Some of the partners include Amazon, Shopify, and WooCommerce.

In the coming months, as Pickrr plug in hyperlocal delivery partners into the Pickrr Plus warehouse network, they will be able to offer 4-5 hours deliveries in selected cities for D2C brands. That’s how this new feature will help brands in the new phase of the pandemic shared Majumder.

Gaurav Gupta, co-founder Shipsy, a logistic management platform too has seen 200 per cent jump in seller registration.

During the festive season, the order volume goes high as brands provide offers and discounts to attract new customers and to increase sales. In return that creates chaos in offering a great post-sales customer experience, faster and timely order delivery, and seamless returns and exchange. That eventually leads to increased RTO percentage, a huge increase in customer service traffic, and dissatisfied customers.

“We have seen good traction with our return and exchange automation solution in September. It looks like that merchants have started thinking about offering a great return experience as well, as they focus on retaining their buyers post the festive season. With Shipway’s shipping automation solution, brands can automate their post-purchase communications proactively, manage the returns and refunds instantly, and also for undelivered orders can automate the NDR follow-ups,” shared Gupta.

He also stated that direct to consumer (D2C) brands will also see a surge in demand as during the 2021 Diwali festive sales period, considering fears about risking infection at physical stores. “The tier 2 and tier 3 cities are going to play an important role in terms of gearing up the revenue. So ensuring faster delivery and a good customer experience will be vital,” he added.

The online jewellery segment is also seeing strong momentum in sales. Melorra, an online jewellery is already working on its marketing campaign for the festive season. “We are soon going to go live with our big festive season campaign. We have already delivered to over 2,700 towns and aim to reach our customer in every Indian pin code in the times to come. Our campaign will educate the consumer about the importance of buying BIS Hallmarked gold jewellery in India in line with the government’s recent announcement,” said Saroja Yeramilli, CEO & founder, Melorra.

Melorra that has revenue of Rs 350 crore is eyeing to be a $1 billion company six years from now and for that target increasing its reach in the tier-2 and 3 cities will be crucial.

“Tapping customers living in non-metros and mini-metros is our big focus. We have delivered to over 2,700 towns in India so far. The power of the internet has put the power of purchasing in the hands of consumers everywhere and our large target audience ensures that we reach all the nooks and corners of the country. One of the most recent steps we have taken towards this end is to branch out as an omnichannel brand with our experience centres both in big cities and small towns,” added Yeramilli.