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Brands adopt new ways to restart operations: CLSA research

Brands adopt new ways to restart operations: CLSA research

Consumer companies like Titan, Aditya Birla Fashion, Westlife, Future Lifestyle, Jubilant Foodworks, PVR and Inox are adopting new ways to woo back the consumers to the stores.

The new innovative measures are part of the consumer confidence and restarting operation measures adopted by these companies. "Some of these measures are also likely to permanently alter the business models of companies," foreign brokerage, CLSA said in a research.

Titan is launching low price point products with a focus on producing low-price-points products that have low input cost as customers want to conserve cash.

It has started 'video-assisted' shopping where a video call and virtual display of jewellery with a sales person to attract customer demand.

Titan is also introducing appointment only access to stores in which customer can come to store by appointment only with a maximum of five customers only allowed in a store.

Aditya Birla Fashion and Retail is working on reducing the number of employees in the stores to follow social distancing norms and to make space for the customers in the stores.

Share of e-commerce in the overall mix could increase and the company is preparing for the same. Trade shows for new season is being organized digitally.

Future Lifestyle FLFL has launched the 'Store at your Door' concept to encourage customers to purchase items during COVID-19 shutdown and ensure delivery at the house.

Orders can be placed via video assisted call giving a virtual shopping experience to the consumer. Shortlisted merchandise are then sanitized and delivered to the consumer's doorstep.

Westlife is improving health consciousness and is creating a healthy portfolio by adding protein-rich products to the menu which are tested continuously to ensure hygiene. Among the hygiene measures there is contactless McDelivery service instated which ensures nobody touches the food with bare hands while cooking, packing or delivering.

The multiplexes PVR and Inox will focus on social distancing. Multiplex association has made recommendations to the government that after every customer group, whether it is family or a group of friends who come together, one empty seat will be left after each customer group.

Multiplexes are preparing to ensure that while people feel protected it does not interfere with the movie going experience and enjoyment.

On show sequencing, show to be sequenced in a manner so as to avoid simultaneous entry, exit and intermissions to minimize crowding in lobbies and restrooms.

Jubilant Foodworks has introduced hygiene measures like 'zero contact delivery' and 'zero contact takeaway' measure through Dominos.

It has also done a tie-up with ITC to supply atta and spices along with pizza.

Consumer companies are expected to launch promotions to reduce inventory. "We expect increased promotions post-lockdown to convert inventory into cash. Apparel retailers would have early onset of End of Season sale (EoSS); Titan may have to increase promotions particularly in exchange-focused schemes to drive inventory liquidation," CLSA said.

"Among affected sectors, we expect QSR to recover fastest given lower end discretionary consumption. Jewellery retailers and multiplexes face multiple near-term headwinds," it said.

Restarting operations will be a slow, painful process and consumer discretionary companies will have to endure business loss for a protracted period. Retailing space is progressively restarting in a phased manner, but it could be end of this year before operations normalise for many, CLSA said.

Companies are driving various measures like variable rental contracts, outsourced payroll, and network rationalization to reduce operating leverage. Given large expansion opportunity, consumer discretionary has been in a massive network rollout. A calibrated industry expansion going ahead is likely to be the norm aiding some further rationalization of rental costs..