By Deepesh Dhingra , Sr. Marketing Manager, Prophecy Market Insights
Festive Retail Update offers valuable insights into the strategies and patterns that are reshaping the retail environment during the most popular shop ping seasons. When merchants get ready for big sales events like Christmas, New Year’s and Diwali they concentrate on improving customer experiences and optimising sales via focused marketing initiatives. Further, retailers know that the holiday season is a critical period for increasing sales and many anticipate growth rates of between 25% and 50% in the years to come.
FESTIVE TRENDS ANALYSIS
1. Emerging Fashion Trends
In India, there is a notable shift towards ethnic wear with brands like ZYOD expecting 20% in crease in sales during the festive period whereas, globally the trends include the rise of sustainable fabrics and vibrant colours that resonate with cultural festivities.
2. Consumer Preferences & Sustainable Fashion
There is a growing preference for products that offer personalization and uniqueness such as limit ed-edition products and also customizable gifts. According to recent studies, 58% of urban Indians planned to shop during Diwali highlighting the significance of the festive shopping period.
As the festive season approaches spending is expected to surge. A recent survey by LocalCircles estimates that total festive spending in urban India will reach approximately Rs. 1.85 lakh crore with one in two households planning to spend during this period.
RETAIL STRATEGIES
Retailers are launching targeted marketing cam paigns that resonate with the festive spirit.
• For instance, Myntra’s marquee festive fashion event, the Big Fashion Festival (BFF), conclud ed its outstanding and biggest edition by far, registering 627 million user visits, a significant growth over last year’s edition. Over 1.5 million new users were added to Myntra at this time, with over 80% of those users being non-met ros. Furthermore, the proportion of new users joining Myntra’s FWD, a specialised Gen-Z fashion destination, increased by almost 2.5 times compared to BAU (business as usual).
Retailers are enhancing the shopping experience through immersive in-store events such as live demonstrations and interactive displays. A warm and welcoming atmosphere is being created by using themed decor that is in line with the holiday spirit.
Discounts and special offers are a staple during the festive season and retailers are introducing limited-time offers to create urgency among con sumers. Cross-selling and upselling techniques are being employed to enhance average transaction values.
According to estimates by leading marketing consulting firm Prophecy Market Insights, the Global E-commerce Market was valued at USD 30.01 Trillion in 2024 and is projected to grow at a CAGR of 19.2% to reach USD 148.87 Trillion by 2034.
MAJOR KEY HIGHLIGHTS
• In October 2024, the government is planning a crackdown on e-commerce companies after getting several complaints from consumers about online retailers flouting norms related to dark patterns during the ongoing festive season sales. The festive season is the largest consumption period in the country contribut ing up to 35% of annual sales for several con sumer-facing companies such as automotive, consumer durables, apparel, beauty and food and beverage.
• In September 2024, ahead of the festive and wedding season, the organised apparel re tail sector is expected to grow 8-10% reve nue growth according to the analysis of Crisil Ratings. The growth in apparel retail operating under the brick-and-mortar format will also be driven by higher demand stemming from a normal monsoon, easing inflation and increas ing preference for fast fashion.
• In September 2024, An Ipsos study conduct ed on behalf of Amazon India indicated that consumer passion for shopping is on the rise: almost 90% of respondents said they are eager to purchase during the holiday season, and 71% said they are looking forward to shopping online. Although 73% of consumers think Am azon.in is a dependable and trustworthy place to shop online, 75% like it because of its large product range.
Analysis of Technology Integration
• Artificial intelligence is enhancing the festive shopping experience by offering recommendations based on consumer behaviour. Major retailers like Amazon and Myntra are utilising AI to tailor product suggestions improving customer engagement and sales during the festive season.
• The focus on creating immersive shopping experiences is growing with retailers using technologies like virtual reality and augmented reality to engage customers. This major factor is evident in festive promotions that include themed and interactive installations.
IMPORTANT CHALLENGES FOR FESTIVE RETAIL
• Struggles with Customer Retention: A report by WebEngage reveals that 70% of re tailers face challenges in retaining customers post-festive season. Factors contributing to this struggle include distracted consumers, intense competition, high engagement costs and also insufficient customer feedback.
• Intense Competition from Major Market places:
Retailers are experiencing reduced profitability as they invest heavily in marketing and invento ry to meet festive demand. The costs associated with scaling operations include advertising and logistics which are significantly impacting profit margins. This challenge is exacerbated by rising
Return-to-Origin (RTO) rates where customers return multiple items purchased during the festive season.
STAFFING STRATEGIES
To handle increased foot traffic retailers are hiring additional staff for in-store support and customer service roles. Training programs focused on cus tomer engagement and product knowledge help staff provide better service during busy periods.
Retailers are adopting an omnichannel strate gy integrating online and offline experiences to provide seamless shopping options for consumers. Further, social media platforms like Instagram and TikTok are becoming essential tools for brands to engage younger consumers through targeted ads and influencer collaborations.
MAJOR BENEFITS OF SUSTAINABILITY AND ETHICS
• Retailers are increasingly prioritising sustain ability by adopting eco-friendly packaging and reducing carbon footprints through efficient logistics practices. For example, the use of pop-up warehouses closer to urban centres helps minimise transportation emissions during high-demand periods.
• Ethical sourcing has become a priority for many fashion brands ensuring that materials are obtained responsibly and that workers are treated fairly. This shift is driven by consumer demand for transparency and accountability in supply chains.
CASE STUDY
| The Body Shop’s Gift Sets | The UK-based cos metics company pre packed gift sets de signed for convenience and personalization enhancing customer experience during the holiday season |
| Growel’s 101 Mall Initiatives | The mall operator has implemented engaging programs expected to boost foot traffic by 15- 20% showcasing how experiential retail can drive sales. |
| Elan Group’s Social Media Campaigns | Foot traffic and reve nues are expected to increase significantly during the holiday season by Elan Group, thanks to influencer collaborations and so cial media engagement methods. |
| DLF Retail’s Brand Expansion | DLF retail’s introduc tion of nearly 80 new brands aims to attract diverse consumer seg ments looking for fresh offerings during the festive period. |
AMAZON INDIA’S GREAT INDIAN FESTIVAL
• In September 2024
Amazon India launched its “Great Indian Festival” to coincide with the festive season, significantly boosting sales across various product categories. The campaign consistently generates substantial revenue with Amazon reporting over 50% more customers in 2020 compared to previous years. The event enhances customer loyalty as shoppers associate Amazon with reliable and high-value shopping experiences during the festive season.
Tanishq’s Pehli Diwali Campaign
• In September 2022,
Tanishq, India’s leading jewellery brand, launched its Diwali campaign, “Pehli Diwali,”. The campaign celebrated the spirit of new beginnings and per sonal growth, honouring every Indian woman who has achieved milestones in her life.
Nike’s Chinese New Year Campaign
Nike celebrated the Year of the Rabbit by show casing Chinese athletes and launching exclusive apparel. The culturally vibrant campaign engaged audiences and highlighted Nike’s commitment to celebrating local traditions.
CONCLUSION
Advances in technology, a growing emphasis on sustainability and shifting customer preferences are all contributing to the fast evolution of the festive retail industry. Through comprehension of these patterns and the application of efficacious tactics, businesses may augment client satisfaction and propel significant expansion amid this pivotal shopping season in India and globally.
