MUMBAI: To soften the blow of pricier product tags for consumers this festive season, brands are rolling out a slew of options such as staggered payment plans, no-cost EMIs, hoping that allowing them the flexibility to purchase will boost upgrades and check down-trading.In the apparel and jewellery spaces, retailers are likely to shun hefty discounts to protect their margins; instead they plan to widen the choice of products at entry-level price points, key to driving sales volumes. Easy financing schemes are very common and already contribute close to half of consumer durable purchases (in general), but given the inflationary environment this year, brands are betting even more on such plans.“While festive volumes may remain relatively subdued, we expect the value of sales to be higher, considering the higher unit costs,” said Arjun Bajaj, director at Videotex, which manufactures television sets for brands. Prices of some commodities such as packaging boxes and power cords have gone up by 30-40% in the past six months, Bajaj said, adding that the 32-inch TV set category in the entry-level segment will bear the highest impact of price rise.LG Electronics and Panasonic are offering a mix of zero-interest cost EMIs, long-term finance, extended warranties and cashbacks to make premium products more accessible.“Premiumisation will remain one of our key growth drivers this festive season…with Diwali bonuses and other seasonal income, consumers are more willing to upgrade,” said Sanjay Chitkara, director and co-CSMO at LG Electronics India. In categories like consumer electronics, durables and fashion, financing schemes are expected to power anywhere between 60% and 80% of total transactions this year, said Tushar Aggarwal, founder & CEO at fintech Stashfin.
Affordability, the key
CaratLane is focusing on affordability through a wider range of price points rather than relying solely on discounts, said MD Saumen Bhaumik. Consumers are becoming more “deliberate” with their spending but the market is not seeing a uniform shift towards lower-priced products, Bhaumik said.Another major player, Malabar Gold & Diamonds is banking on old-gold exchanges which already helped garner 70% of sales in recent times to reach shoppers with smaller budgets, said group chairman MP Ahammed.
‘Design over discount’
“Our answer is design rather than discount. When gold prices rise, the honest problem really is that a piece which sat at one price point moves above it – so we have been re-engineering products to keep genuine choices available at every budget,” said Gaurav Singh Kushwaha, founder & CEO, BlueStone Jewellery.Liberty Shoes is prioritising the below Rs 2,500 price segment where the GST implication is only 5%. Executive director Anupam Bansal said that the idea is to offer better design, materials and comfort at accessible price points. “It is about premiumising the product within an affordable range rather than simply moving price upwards,” said Bansal.Flipkart is partnering with brands to launch exclusive product packs at value price points, said Nishant Dalal, VP, consumables, FMCG and healthcare, head of BGM at the company.
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