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While metro cities notice a massive increase in shopping during the festive season, experts say that this year, apparel brands are increasing their focus on Tier II and Tier III consumer cohorts.
According to a recent study by CyberMedia Research (CMR), it has been found that people living in Tier II cities spend approximately 16% of their income on online shopping. Another interesting trend observed is that 62% of consumers purchase clothing and accessories online.
Consumers are also expected to indulge in ‘phygital’ shopping as they are balancing their online and in-person shopping experiences. InMobi's 2023 report, ‘The Marketers Guide to India’s Festive Season’, notes that 54% of consumers are expected to engage in hybrid shopping.
To maximize their presence throughout the customer journey, it has been suggested that brands should connect with high-intent audiences early on through a multi-channel, full-funnel approach, rather than solely focusing on the final purchase stage.
Leveraging the uptick in consumer sentiment, global brands have also made their entry in India where Aldo, Charles & Keith, R&B, and Bath & Body Works have launched exclusive festive collections for the Indian market just in time for gifting. Tushar Ved, President of Apparel Group India Pvt Ltd comments, “While sales in metro cities are growing strongly, we anticipate even greater growth in tier-II cities. That's why we are strategically opening new stores in Udaipur, Ranchi, Kozhikode, Kanpur, Udipi, and Mangalore.”
Ved believes that consumers in these cities are becoming more brand-conscious and are increasingly aspirational in their desire to own premium-quality products. They represent an exciting opportunity for growth.
A report by CRISIL Ratings shows that organised sector brick-and-mortar apparel retailers are set to sew 7-8% revenue growth this fiscal, buoyed by festival and marriage season demand, and despite inflation impacting discretionary spending in the first quarter.
“With continuous store expansion, and the onset of the festive and wedding season, demand should improve materially in the third quarter (~35% of annual revenues) and a part of the fourth quarter, supporting revenue growth,” Anuj Sethi, Senior Director, CRISIL Ratings mentioned in a press release.
Continued store expansion, including to Tier II and III cities, will also help growth this fiscal and over the medium term.
Sucharita Ghosh, Vice President - Marketing at Suta shares her observations and adds, "Having toured several cities of all sizes with our Suta Bazaar exhibitions, we’ve been delighted with the overwhelming response we’ve received from smaller cities.” The saree brand’s biggest markets continue to include Tier I cities.
Ghosh continues that the brand has been observing a steady improvement in consumer sentiment, with the advent of the festive season as it expected to see sales and customer interest peak during Navratri and hold its sway for the following month or two.
Influencer marketing & Storytelling
Noting that this is a key shopping period for customers given the numerous festivals and weddings, Ashish Mukul, Brand Head, TASVA mentions that the brand is planning a substantial increase in its advertising budget for the upcoming festive season.
“We will primarily allocate our budget to digital advertising and Connected TV. While we focus on these key mediums, we are also actively exploring other channels as well to maximize our reach and impact,” Mukul elaborates.
The menswear brand’s marketing strategy aligns with the evolving preferences of the modern Indian man. This discerning consumer seeks not only great designs but also a high level of comfort when it comes to ethnic attire for festive occasions and weddings.
With this, the brand has released its latest campaign showcasing the wedding collection with stars Ranbir Kapoor and Ananya Pandey. The campaign aims to break the age-old adage of men staying aloof from wedding planning and invites grooms to take charge of the most important day of their lives and make choices that reflect the best that they can be.
In the case of D2C brands like Zouk, significant sales growth across metro and Tier I cities is expected during the festive period, where there is a greater affinity for premium, ethically sourced apparel.
Disha Singh, Co-founder of Zouk remarks that the brand also aims to reach new audiences in smaller cities and towns through our online platforms and cater to the customer’s needs in these areas.
“We plan to allocate more to our advertising budget for the festive season. Our primary focus will be on digital and social media advertising, as these platforms provide effective ways to reach our audience, especially considering Zouk is a D2C brand. While we value traditional advertising mediums, our strategic shift towards digital channels aligns with our brand's digital-first approach and the evolving preferences of our target audience.”
The brand has been curating its content through influencer partnerships and relatable, handy tips for the festive season starting from Onam. Through reels and carousels, every piece of content has a touch of the festival and what it is known for.
Similarly, Suta has been infusing storytelling into its content strategy by launching collections surrounding the diverse culture the festivals are known.
Suta’s Sucharita Ghosh specifies, “The bulk of our ad spends go towards digital marketing, with a focus on Meta ads. But we’re also exploring alternate channels including SMS marketing, and campaigns driven via our own app, which we launched earlier this year.”
On the digital front, the brand has been exploring personalised recommendations to improve its Average Order Value (AOV), as well as omnichannel tools and strategies to engage its customer at various touchpoints in their journey.
Recognizing that many of its existing users as well as newer audiences still prefer the intimate shopping experience of brick-and-mortar stores, Suta has taken its count of physical outlets to seven, including stores in Mumbai, Thane, Bengaluru, Kolkata, Hyderabad, Chennai, and Bhubaneswar.
To sustain this buzz, Ghosh elaborates that it is hosting events and activations at the stores and investing in strategic hoardings and billboards, as well as advertising in movie theatres to improve visibility. Prepping for its physical stores, the brand has also been showcasing the behind-the-scenes.
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Alongside this, the brand has been partnering with other brands to complete the looks by offering giveaways and contests.
Ekta Dutta, Head Marketing, Biba Fashion Ltd. shares brand's plans. She says, “While both offline and online continue to be crucial for us, we've also recognized the resurgence of movie theatres as a prominent medium and we plan to explore cinema branding as a major focus.”
Dutta states that women today are highly influenced by social media trends, influencers and content that is available to them readily due to which they are willing to experiment a little more with their looks.
This is why Biba has been joining in on the fun by including influencers across age groups, including children to showcase their collections. The brand has been engaging the audience by encouraging them to post pictures in the collections, especially for topical occasions. It can be noted, however, that the reels with children have received more attention and engagement compared to the other videos.
Dutta also reveals, “Regarding the regional market, we are well-prepared and presented across to cater to market needs. We witness growth spurts basis the region-specific festivities such as Pujo in the East, Dussehra in the South, and Diwali celebrated nationwide. Our strategy is designed to address the unique preferences of each region and drive sales growth accordingly.”
Tushar Ved of Apparel Group India divulges that the festive season has boosted sales of exclusive merchandise across its online and offline brands. Since the company announced celebrities Aditya Roy Kapur and Janhvi Kapoor as the brand ambassadors for the ALDO India festive collection, it has seen growth in the past few weeks and is optimistic about the future.
“The company focuses on brand positioning, target market definition, product differentiation, omnichannel presence, CRM, influencer association and collaborations, and social media marketing. We have engaged our digital channels to connect with our target audience effectively, build brand awareness, and drive sales,” remarks Ved.
According to ratings agency ICRA’s latest findings, ad spending by retailers and fashion companies has not slowed down and is expected to continue growing for FY2024. As the apparel industry continues to infuse storytelling, influencers and theatres into its mix this festive season, reaching the target audience across the metro, Tier I, Tier II, and Tier III cities will most likely spread more positive sentiments for shopping.