Experts deliberate about bottom-line in offline over valuations in online retail.
Mumbai: While online is the disruptive buzzword, offline still rules the roost, according to experts speaking at the two-day Phygital Retail Convention 2025 organized by the Images Group.
“Online is a matter of discount in India,” said Kumar Nitesh, CEO – Ajio Business, Trend Footwear – Reliance Retail indicating that margins are much better offline. Average online business is 25%, experts at the panel discussion said beyond, which can drive valuations, but bottom-line bleeds and rest on the offline business.
Earlier in the day, talking about profitability, P Senthilkumar, Senior Partner, Vector Consulting indicated that fast moving trends in fashions in India is leading to high gross working capital and in turn low inventory turnover.
The long lead time to forecast a trend is leading to inaccuracy in predicting demand as product lifecycle is getting limited to four months, Senthilkumar said, “What was sold in the previous session is no more relevant in the next season in a fast paced industry with changing demand profile,” he said.
Speaking later in the session, Shiv Shivakumar, Thought Leader and Management Thinker pointed out that apparel segment is all about buy two, get one free and where retail approach in being profit making has failed due to absence of innovation.
Drawing a parallel, Shivakumar said, unlike airlines where the revenue is in rupees and costs incurred in dollars unlike the IT services where it is the other way round, retail must look at the latter to manage their costs, de-risk their model and improve their bottom-line. Beyond fashion retail, experts at the conclave pointed out towards the changing retail universe led by experimental behavior among the new age consumers.
Participating in the session, B S Nagesh, Chairman, Shoppers Stop Ltd. & Founder, TRRAIN, called upon the conventional retail grocery stores to adopt technology and scale up their operations as has been established by some of the old age retailers.
Speaking on the changing consumer mindset from their study derived from over 700 voices, Nikhil Bhatia, Managing Director, Capital Markets & Land, CBRE India pointed out that entertainment is the new cornerstone of the experimental economy. According to their study, entertainment led segments had seen a 150% increase with family entertainment centers driving footfalls in metro cities like Pune, Bengaluru and Mumbai that include upscale bowling alleys and gourmet dining, Bhatia said.