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Consumer splurge on electronics, home appliances bring festival cheer to retailers

NARAYANAN V Chennai | Updated on November 11, 2020

After a complete washout of peak summer sales due the pandemic-led lockdown, offline retailers of consumer durables, electronics and home appliances are witnessing a surge in sales this festival season as those, stuck at home, are splurging on larger TVs, home theatres, smartphones and other electronics to make up for the loss of travel and outdoor entertainment.

Leading large-format retail stores say the season’s sales have already crossed last year’s record and with Diwali just days away, retailers expect more consumers to rush to make the most of the festival offers and discounts.

“The entire lockdown has been fairly positive for our category since people are spending more time at home be it for work or studies, the demand has actually gone up be for laptops, smartphones, large TVs, refrigerators and other home appliances,” Ritesh Ghosal, CMO, Tata Croma-Infiniti Retail said, adding, “From festive-to-festive, our sales growth is 21 per cent and if you compare Shradh-to-Shradh, then we are at 25 per cent.”

South has done well

While South India has not been a strong market for Croma, which has more than 170 stores across the country, the pent-up demand for entertainment, productivity and convenience products has helped the large-format retailer to perform well in this region as well.

“Even the stores which were struggling before lockdown are doing excellent sales after lockdown and I think it’s because customers, in general, prefer large format retail which allows them more space and feel of safety,” Ghosal added.

Home-grown retail chain Viveks’ Navratri sales has been on par with previous year sales and it expects the momentum to continue even for Diwali.

“We have seen Navratri sales equal to last year’s sales. For Diwali, we are able to see at least 5 per cent increase in sales. While the footfalls in the morning are slightly compressed due to rains, we are seeing a good amount of traffic between 3-9 pm on all our stores,” said BK Shankar, Chief Executive Officer, Viveks.

The festival season is seen as the biggest consumption period in India, accounting for 35-40 per cent of annual sales of most consumer facing companies. It typically begins with Onam in August and runs up to Christmas and New Year with Diwali being one the peak period of sales.

Footfalls down, sales up

Many of the offline retailers also pointed out that while the footfall is down, the conversion rate and average ticket size have sharply gone up since only serious buyers are visiting.

“The total footfall has reduced by 50-60 per cent but the conversion strike rate is 90-100 per cent,” Viveks’ Shankar said, explaining : “Earlier seven out of 10 customers who walk into our stores will buy a product but now that has gone up to 9 or even 10. Only serious buyers are walking in.”

Croma’s Ghosal also acknowledged a similar trend and added, “Tickets below ₹3,000 used to be half of our business earlier but that has pretty much changed because there are no window shoppers or impulse buyers. Now, there are fewer shoppers, fewer bills but for large value.”

South India’s leading multi-brand mobile retail chain Sangeetha also said that it expects the Diwali sales in Tamil Nadu to do better than last year. Riding on the festive sales optimism, the mobile store brand also added laptops and smart TVs in its product portfolio.

Published on November 11, 2020

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