In 2008-09, the per capita textile consumption in the country was 22 metres. This grew by over 30 per cent to 29 metres in 2010-11. Also, in the last 18 months or so, the number of garments per shopping bill has grown by 40 per cent to 2.2. Clearly, apparel retailers have a lot to cheer about. A lot of hard work has gone into this growth – retailers have really had to get their act together on various counts, be it product offering, retail ambience, personalised service or supply chain.

This is good news for the demanding Indian consumer exposed to global styles and trends. Apparel retailers are now trying to understand the consumer and improve the retail experience. There is still a long way to go, but retailers have set the bar high as they seek to bridge the gap with international brands. Organised retail is growing at over 25 per cent per year and apparel among the fastest growing segments.

The entry of international brands such as Zara, Tommy Hilfiger and Benetton has opened up the metros and mini-metros to a different kind of merchandise in the last five years. Overseas travel, an appreciation of brands and desire for similar merchandise in India has also added to the growth story.

“The apparel industry is certainly coming of age today. With Indian consumers being exposed to a global lifestyle, they are now demanding an international look and feel for the price. Domestic brands have had to raise the benchmarks to match these demands,” says V. Rajagopal, CMD, Indian Terrain.

The apparel industry is currently in the toddler stage in India. Till two years ago, it was virtually still-born, says Ajay Ramachandran, Brand Director, Van Heusen, from Madura Fashion and Lifestyle: “It is only now the apparel retail industry is beginning to attract true marketers. Till a few years ago, it was mostly run by small-scale players. Marketers are just beginning to corporatise the segment.”

Apparel retailers today are more focused in their approach, says Sharad Mehra, Senior Vice-President and Head of textile division, Technopak Advisors. “They have understood the retailing process (seasonality, inventory control, store formats, supply chain) much better than before. Store viability and bottom line (and not more stores) have become important considerations. Their understanding of the customer needs and desires is much better, and reflected in the product width and depth. The product is more fashionable, store design is in sync with the feel of the brand and the customer is getting more importance than before.”

Home-grown brands can no longer survive in the current volatile market if they remain the way they were. A lot more needs to be done on aspects such as distribution and consumer insight. Admits Ramachandran: “Brands must be available in large-format stores, they need to stand for something and give consumers what they want. If home-grown brands can provide quality and sartorial heritage and fashion solutions, consumers will opt for them. But not enough work has been done in the 4Ps of marketing – other than product. There is still a lot of work to be done in penetration, understanding consumers and distribution strategies.”

Supply chain efficiency is also critical, considering apparel brands are ramping up distribution and presence right up to the tier-3 towns. Much investment is also going into IT and ERP systems to service the back-end. “Supply chain should be able to manage store expansion. About 60 per cent of our need is manufactured in-house at our plant in Chennai. We plan to build a system wherein we will encourage entrepreneurs to set up plants and we source from them,” says Rajagopal.

The Rs 650-crore Van Heusen is working out strategies for stocking and manufacturing. Its stores currently run 90 days of stock. But it is trying to shorten the cycle to 75 days.

Many of Madura's factories are moving into lean manufacturing. Currently, it is like a batch procession – where 300 collars are made, then 300 sleeves are taken up. At the end, the parts come together to become a shirt. “But we are now moving into a different line. In this, one shirt is made by seven tailors and then the next shirt is taken up. It won't be 300 shirts coming in 20 days, but 10 shirts every day. While the overall volume remains the same, there is flexibility in delivering. This way, brands can be managed with the available cash on hand, which has not gone up,” says Ramachandran.

The slowdown taught retailers to check costs and improve internal efficiencies. “The apparel industry used to operate on a vertical model with each brand having a separate team with several people — from the CEO to the lowest level. We have changed that completely and have smaller groups, with each group handling three-four brands. All the groups share sales and distribution. This has improved efficiency,” says J. Suresh, MD, Arvind Brands and Lifestyle, which clocked Rs 850 crore this fiscal – from being a loss-making firm with a turnover of Rs 200 crore.

What about rising cotton prices and excise duty which are pushing up retail prices by 5-10 per cent? “We have to live with it and focus on strategies like smarter sourcing. Right now, we are cotton-led. We need to relook at alternative product mix using fabrics such as modal, viscose, silk and silk cotton. We can also think of changing the cotton count, but with a better finish so that the overall look and quality don't suffer,” says Rajagopal of Indian Terrain.

Why has it taken so long for retailers to understand the market? “Besides the demand and supply issue, space was a constraint. Marketers made many mistakes and didn't get the basics rights. Besides, it was a new industry, while the western world had 60 years of experience. But we are seeing results now in India. As you go along, consumers can expect fast fashion and real synergy between products. Fits will be more consistent. There will be greater variety and colours,” promises Ashesh Amin, President – Apparel and Retail, S. Kumar's, which for the first time this year went to IIM-Ahmedabad to hire talent, as the company hopes to fuel energy into the system.

Issues still remain, especially those relating to brand perception. The brand-promiscuous Indian consumer doesn't know the distinction too well.

Even as home-grown brands benchmark themselves against international brands, not all international brands have got it right in terms of consumer perception. For instance, home-maker Anju Pratap thinks Marks & Spencer is “unaffordable” and thinks twice before “indulging”. This in spite of the retailer slashing prices in a bid to shake off such a perception.

Also, despite brands investing in customer service through technology and innovation, consumers still feel a bit lost or disconnected when they walk into a store, with the sales staff often not living up to expectations.

The Indian consumer is still not fully loyal to any brand. “The focus has to be on providing greater value to the customer, in terms of price, design, customer service, convenience, and product development. Brands should extend into related areas such as accessories and perfumes that will help make significant contributions to the bottom line over a period of time,” advises Mehra.

Can retailers weave the magic?

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