Festive Bonanza

The festive spirit is in the air with Durga Puja, Dussehra and Diwali just around the corner. To make gifting and shopping even more special for customers, IT vendors have started rolling out mega festival celebration offer for customers and for their channel partners.

Festival season is a good time for the retailers to appeal to customers with discounts and schemes. The consumers too look forward to avail the discounts on offer. The festival season is considered auspicious for shopping too which adds to its attraction.

Today there are hundred of brands, each competing against each other for getting the mind share of both the partners and end customers. The best way to get and retain the partner's mind-share is to have continuous schemes/promotions. IT vendors have to be in the minds of the dealers so that they promote vendors products to the customer.

Will festival season benefit our channel partners? Most of the IT companies are ready to bring more schemes in the market during the festivity season. A number of schemes are either being launched or at the soft launch stage, waiting to be launched in the region.

Sales on the Rise
Partners have pinned hopes in the coming times. While currently laptops of Dell, HP and Lenovo are scoring high when it comes to the best selling IT product, dealers feel that the market for tablets is also going to be big in the future. "There is lot of craze for tablets among people. I feel its market is going to fare very well in the coming times," said Pradeep Jhawar from Berlia Compu System.

Schemes are required for partners as it acts as a motivator for them to work towards the set target. This also helps to plan their inventory for the entire quarter as most of the schemes are floated on quarterly basis. However, executing a scheme is not a simple affair; a lot of factors go into the planning process. It is also important that schemes are achievable for participants which will be helpful in boosting sales and achieving the desired revenue goal of the organization.

According to Jammu based Naveen Gupta, "This year, we hardly did any business due to VAT issue in the state, but we are looking forward to Diwali time and expecting to make good business and cover up our sales targets before Diwali. Moreover, we are waiting for vendor schemes to come in which will further push end customer sales."

Adding to Gupta's view, Kolkata based KL Lalani, chairman of Lalani group said, "We always enjoy bumper sales during festival time. We have been witnessing healthy sales since Durga Puja time and our sales have been increased by 35% as compared to regular sales, which may go up by 200% before the Diwali time. Laptops, tablet PCs and smartphones are among the fast moving products in the end customer's space."

Doing THAT Extra Bit
While there has been an emergence of large format retail stores, several small stores are seen refurbishing their retail outlets to attract more footfalls and improve their visibility and devising retail-specific growth strategies. Now, with the festive season on, the small retailer is daring the big boys with discounts and special offers, publicizing them with sharply targeted pamphlets.

Lalani added, "We are investing close to `40 lakh on marketing and promotional activities during the festival season. We have replaced grimy, dark, old wood cabinets with bright, colorful laminated shelves. Next, just like supermarkets, we started stocking fashionable products like tablets, laptops, camera and smartphones and many new devices. Labeling, price stickers and neat rows stacked with the goodies followed. Moreover, to get more footfalls, we are inviting local TV celebrities and sport-stars to our retail store and doing joint promotion. All these activities are paying off, and we are looking to do record break sales on this Diwali."

Lalani relies on his marketing instincts to stay on his toes, although he has no clue about the brouhaha over FDI in retail., he brainstorms with his "boys" in the shop on ways to not just retain existing customers but also to attract new customers.

In Delhi, the Asia's largest IT hub Nehru place IT market is all geared up to see great Diwali. This year, the Nehru Place IT association All Delhi Computer Traders Association (ADCTA) has started new initiative "Diwali Celebrations Carnival" - A scheme for end users to buy and get chance to win prizes worth `20 lakh by getting a "Lucky Prize Coupon" on purchasing IT products.

Speaking on this initiative, Mahinder Aggarwal, president, ADCTA said, "This first-of-its-kind Diwali carnival focuses to enhance the sales of IT companies and bring back the lost glory of Nehru Place, with getting more walk-ins. Our association is involved to make this carnival a big success for the IT market. We are getting good response from the vendors as well as from IT dealers."

On the same line, Mumbai based TAIT association is planned to organize TAIT Diwali channel networking event, on November 3. According to CW Kadwadkar, member of TAIT, "The objective of this event, is to create new business opportunities for IT vendors, channel partners and end customers. During the event, more than 1,000 people is expected to be participating. We will be seeking more support from vendors to enhance the sales during the Diwali time."

Important Points to Keep in Mind
Festive season is the time when most of the partners start getting into unhealthy trade practices like eroding of MOP, overstocking, cheque bouncing, etc. Additionally, vendors create an aura around channel partners which can easily tempt them to over stocking of the product. No doubt, channel schemes do help in creating a buzz around the products, but is the problem of overstocking, a way to get rid of old stocks?

Overstocking is a regular and unavoidable phenomenon which the vendors encounter. Explains Govind Marda CEO RS Computer, "Overstocking is a regular phenomenon which happens when the market trend doesn't go as per the plan and various other reasons, so we have to adopt some other plans to come out of overstocking if it happens to be."

No matter how prudent the organization is to avoid the situation of excess inventory, but sometimes during sell-outs, seasonal impact, etc, the business does entail the situation of ‘overstocking'.

"During such times, we have worked out best ways to deal with it and overcome the situation. The overstocking situation may be diluted by offering and bundling with the most-in-demand SKUs. Sometime this takes time but this becomes the mantra," reveals Siril Muthirakkal, sales manager for India channel at Foxconn.

Lowering price is like self-bleeding and it will not help in the long run. Targets are to be achieved with good sales strategies and not only with the price. Otherwise it will be impossible to move forward once it reaches the bottomline. Most of the schemes carry various conditions; one of the conditions is that market MOP should not be disturbed with scheme amount by deducting and clearing the stocks.

Sandhya Malhotra
sandhyam@cybermedia.co.in