Businesses are excited to meet surging consumer demand and capitalize on increased spending. They are implementing efficient supply chain strategies to meet the extra demand.
As India's festive season approaches, businesses are gearing up to meet the surging consumer demand. From the illuminating Diwali lights to the joyous Eid celebrations, this period is not only culturally significant but also a pivotal time for businesses to capitalize on increased consumer spending. The season comes with its own unique set of challenges and opportunities, making it an exciting time for retailers and marketers alike.
Mr. Sumit Garg, Co-Founder and Managing Director, of Luxury Ride, expressed the excitement among buyers and their willingness to increase spending during the festive period. He said that the festive season is set to arrive in full swing, and it is stirring a lot of excitement among the buyers. They have been awaiting the festive period for a very long time, and they are willing to raise their spending to purchase the product they have been eyeing for a very long time.
He also mentioned that similar sentiments have been witnessed even in the pre-owned luxury car segment, and Luxury Ride is curating a comprehensive collection of cars that offer the best value for money, based on an understanding of consumer behavior and demands.
“Preparing for the festive season, we are already in the process of organizing an inventory that flaunts a wide range of options in terms of diversity in car models, price range, or showcasing vehicles from different segments under a single roof. By maintaining more than 75+ cars in the inventory at a given point in time, we aspire to make shopping a hassle-free experience for customers by allowing them to choose from a wide range of options in terms of price and variety that are available at the same place. The extensive collection will enable them to select from a variety of cars in the segments of sedans and SUVs ranging from Rs 20 Lakhs to Rs 1.25 Crore,” Mr Garg added.
Regional and Demographic Insights
The festive season is when most Indians spend money on gifts. While speaking with Abhishek Vyas, Founder of SBMV Gift Shop, he highlighted regional and demographic variations in spending patterns during the festive season. He said, “At SBMV, we are offering a wide range of high-quality gifts at competitive prices, plus promotions and discounts throughout the season. We are well-positioned to capitalize on the growth of the Indian gift shop industry.”
He also shared that the spending pattern varies across different regions of India and among different demographic groups depending on the festival. While people in northern India tend to spend more on Diwali, people in the southern part, especially in Kerala, tend to spend more on Onam. Similarly, younger people are more likely to spend money on experiences and gifts that give back, while older people are more likely to spend money on traditional gifts.
To capitalize on the increased consumer spending during the festive season, Mr. Gurpreet Singh, Director of River of Design (ROD) said that they have a multifaceted strategy in place. “We recognize the importance of offering exclusive and innovative designs that resonate with Gen Z, our primary target audience. Our commitment to delivering cutting-edge style and design ensures that we remain at the forefront of fashion during this crucial period. We will introduce special festive collections that cater specifically to the tastes and preferences of our Gen Z customers, ensuring that our products are not just fashionable but also affordable.”
Additionally, he mentioned that ROD would collaborate with leading brands to create exclusive lines available only on platforms like Myntra and Flipkart. These collaborations not only would boost their visibility but also would align them with established names in the fashion industry, attracting a wider customer base. He also shared that the latest trend in this festive season spending reflects a growing emphasis on sustainability and innovation in fashion for which they have developed unique blends of yarn with eco-friendly indigo dyes.
How Festive Season Spending Differs in India by Region and Demographics
Mr. Nitish Rai, Co-founder and CEO of Freightfox, said, “The country saw over 19% increase in GST collections in August 2023 over August 2022. The highest contributions came in from Bihar (27.25%) followed by West Bengal (24.5%) and UP (18.52%). Most of our customers saw a 10-12% increase in demand at the onset of the festive season in August, which is expected to further rise in September and October before we start seeing a decline.”
The difference in average transaction value or basket size between the festive season and non-festive season in the gifting industry can vary depending on several factors, including the specific type of gifts, consumer behavior, and the strategies employed by retailers. Mr Vyas of SBMV Gift Shop said that during the festive season, especially leading up to major holidays such as Christmas, Hanukkah, Diwali, Eid, and others, the average transaction value or basket size tends to be higher compared to the non-festive season.
Transaction Size Variations During Festive Season
Businesses are implementing efficient supply chain strategies to meet the increased demand, ensuring that their products are readily available to their customers. Mr. Singh of ROD said, “As part of our expansion plans, we are targeting Tier II and Tier III cities where 70-75% of our orders originate. This expansion will further strengthen our presence in these regions and enhance our ability to meet the diverse market demands during the festive season.”
Mr. Rai, of Freightfox, emphasized their commitment to empowering manufacturing enterprises with actionable insights on Scope3 emissions from the transportation and distribution value chains. Their Logistics Emissions Abatement Platform (LEAP) aims to help customers account for their logistics emissions and encourage the use of greener fleets in transportation networks. For Freightfox, it's not just about making profits during the festive season; it's also about making a tangible difference in minimizing their environmental footprint and contributing positively to the community and the environment as a whole.
Fostering Connections Beyond Sales
Ms. Akanksha Sharma, Co-founder and CEO of CITTA, emphasized the importance of fostering connections and respecting customers' faith and traditions. She believes that the moments of cultural significance are not merely occasions to exchange gifts and pleasantries; they are an opportunity for brands to embrace the spirit of togetherness and innovation.
She said, “The festive season is not just an opportunity to boost sales; it's a chance to foster connections. We understand that festivals are deeply rooted in people's lives, and we approach this season with the utmost respect for our customers' faith, beliefs, and traditions. As a brand rooted in Indian traditions and backed by modern science, we take pride in being part of this tapestry. Our commitment is not only to pamper the delicate skin of babies and provide convenience to modern parents but also to celebrate the cultural richness of India, where ancient traditions harmoniously meet modern science.”
Ms. Neha Mohanty, Founder of StarFishGlobal Communications LLP, said, "Giving gifts to those in need is how I give back to the community. Instead of exchanging gifts among ourselves, if we can simply give a portion of it to people in need, it will make a significant difference in their lives.”
She emphasized the importance of coming together during the holiday season to purchase necessities like warm clothing, blankets, and toiletries, which can then be distributed to those in need within the community. She shared that this is a tradition she personally follows every year and encouraged everyone to consider it as it adds depth and meaning to the festive season and enables individuals to contribute meaningfully to their community. Neha suggested that giving back during the holidays provides a genuine experience of the holiday spirit.
With a growing emphasis on sustainability and innovation, businesses are not only preparing for increased consumer spending but are also actively engaging in eco-friendly initiatives. Collaborations with leading brands and a focus on sustainability are poised to shape this year's festive season.
Moreover, logistics and supply chain expansion into Tier II and Tier III cities is pivotal in meeting diverse market demands during this festive period. It is clear that businesses are not only preparing for sales but also actively engaging with their customers to make this festive season truly special.