Reebok is offering a flat 40 per cent off on most of its range, except the latest products . My friendly neighbourhood Nilgiri’s departmental store is offeringtwo days of shopping where if I buy goods worth Rs 1000, I get freebies worth Rs 460. Puma earlier offered two days of 50 per cent flat discount.

Every retailer in the market seems to have gone berserk. Some have even gone out of the way to tell consumers to loot the store. Others have branded well. On the whole, there is a yen to get those big sales happening. It is raining discounts in the market.

The logic of the sale is a simple one. Money supply in the market is getting tight. The stock markets have been in slump mode. Inflation numbers have hit double digit numbers over the last several successive weeks. Interest rates have gone up. And everything is being traced back to the price of a barrel of oil which has hit a record high, and which reigns at $129 per barrel at this point of writing.

Retailers are sitting on deep inventories. The sale is a great way of liquidating stock. It is a great way of pushing out money, which lies in clots in godowns and warehouses, and stockist points as stock. The sale is a device to move out slow-moving stocks. It is a way of creating that appetite in the customers’ hearts to spend and buy — even things that he or she does not need.

A case in point. A friend bought 11 pairs of slippers for all of Rs 10, 000. And guess what, this meant that she can buy more slippers for Rs 10, 000 more! That would make 22 pairs! She possibly just needs two.

The retail marketer understands the psyche of the consumer in the Indian marketplace. It is time to flog the stock with the appeal of a store on sale.

To the retailer this undercuts his profit line, but frees up stock. It frees up money stuck in stock, some of which is old stuff. In tough times such as these, it is prudent enough to make these discounts happen and free up the blood clots of stock and convert it into free flowing blood. And blood here is good old cash.

What does a sale do to brands?

First, it exposes the profit numbers that retailers make to consumers. Consumers suddenly start wondering why retailers keep such huge margins. At times, this imagination of margin goes berserk in consumer minds and they do believe brands don’t necessarily make sense on the price side.

Second, ‘sales’ devalue brands. It brings into brand consumption sets of consumers who would have otherwise not come of their own volition. Such customers are really not positive influences for the brand in question.

Third, it habituates customers to the sale syndrome. Particularly in items such as shoes, fashion garments and durables, it makes customers wait for the annual sale to buy. This is bad for the brand, as the brand is not a brand at all in many ways. It is a brand for most part of the year, but assumes the avatar of a cheap commodity once a year, when it is bought during a sale.

There are several other downsides to a sale, but let me leave them aside for the moment for want of space.

ITC Foods’ Bingo is a success. If that is the case, what went wrong with ITC’s apparel division Wills Lifestyle? Why is it not amongst the top five apparel brands in India?

_ Manish Laddha, Mumbai

Manish, success in one realm surely does not ensure success in another. Further, the kind of work that has gone into the snack-foods business is a far cry from the kind of consumer understanding that has been used in the Wills Lifestyle business. The results are apparent, and this is not to say that Wills is not a happening brand on its own.