The Indian festive season is a time of celebration, traditions, and, exclusively, shopping. It’s a period when consumers indulge in buying ethnic attire for various occasions.
To uncover the effect Ganesh Utsav 2023 had on pricing, we have analysed around 34000 SKUs among the top 5 categories under ‘Indian ethnic wear’ from 6th September to 25th September. We found some interesting insights that shed light on how businesses and consumers behave during this season of festivity.
The Price Effect:
The most anticipated trend during this season is the flood of price drops and discounts. By analysing the trend of prices before the festive season and at the onset of it, we uncovered that almost 25% of Indian ethnic wear realized a drop in price. Sellers seem to be enticing consumers to shop more by ensuring they perceive their products as a festive deal!
While the price drop is evident, it’s not the full picture. We also observed a significant push towards premium products. Sellers are recognizing consumers will invest in high-end clothing to look their best on special occasions. Around 12% of products were pushed between the deals and discounts, but in fact, are being offered at higher prices. This is a strategic move on the seller’s part to capitalize on the rush of demand during the festive season.
However, the surprising majority was the lack of price change. One might expect the festive season to be marked by deals and discounts. However, approximately 72% of Indian ethnic wear products had no discounts offered on them. This may indicate that sellers believe the festive rush is enough to ensure they make a sale.
If you are interested in more market-level insights, we aimed to uncover whether discounts were actually rolled out during Amazon Prime Day.
NEW PRODUCTS RELEASE FOR THE SEASON:
The potential of the Indian market is massive. Trying to capture the rush of demand created during this festive season, sellers have introduced brand-new products solely for the festive frenzy.
These numbers reflect the dynamism of the Indian ethnic wear market during the festive season. Sellers are not only adjusting prices but also diversifying their product offerings to meet the unique demands of this time.
MRP Analysis:
Behind the scenes, an astonishing interplay of pricing strategies took place. We uncovered some fascinating insights pertaining to the MRP of these products.
By analysing the MRP from 6th September to 13th September (a week before the festivities began), we realised that, across all the subcategories, 31 products saw a change in the MRPs. This rise in MRPs was maintained throughout the festive week. Additionally, MRPs of 16 products were raised exactly at the onset of the festive season i.e. 20th September.
It seems the sellers intended to raise the maximum retail price (MRP) at which they could sell the products during the festive season. Raising the MRP is a shrewd pricing strategy. Since higher prices could be charged to the consumers, it helps in increasing the seller’s profits.
False Promotions?
We delved deeper into an interesting case: Where the MRP was raised almost as high as Rs 8000 for the festive season.
DATE | PRICE | RANK | MRP |
13/09/2023 | 6533 | 80 | 16333 |
20/09/2023 | 6025 | 69 | 24100 |
As it is observable here, the MRP was raised from Rs 16333 to Rs 24100. What is interesting is that the price has dropped from Rs 6533 to Rs 6025. Shoppers are more likely to make a purchase when they feel they are getting a discount.
Originally the discount is around 60%. If the MRP remained the same, the discount on the festive day i.e, 20/09/2023 would be around 64%. But discounts are vital in the eyes of the consumer. Therefore by increasing the MRP, the discount now is perceived as being 75%, subsequently pushing the product’s ranking from 80 up to 69. This is an example of an astute marketing strategy from the seller’s end.
If competitors are offering similar products at higher MRPs, the seller might use a lower price with an even higher MRP as a competitive strategy to stand out in the market. At the end of the day, a consumer’s perception of price is what drives a seller’s profit!
Importance of Pricing on Popularity:
Lastly, throughout the analysis, one aspect was brought into the spotlight i.e. the need for pricing dynamically in the market.
We have analyzed a product’s tile rank along with its pricing to understand if pricing properly plays a role in the market.
This particular product under women’s ethnicwear has remained ignorant of its market dynamics. By keeping its price constant throughout the festive season, its rank has significantly worsened throughout the festive season.
A comparative product on the other hand acts as a testament to the importance of offering competitive prices, especially during the festive season which is crucial in maintaining one’s standing in the market. The significance of pricing cannot be underplayed and setting the optimal price is no easy feat.
So find out how pricing AI systems can assist you in doing that.
To keep up with this dynamic environment, it is imperative to learn how AI pricing engines can help you do that.
Book a free demo of our automated retail solutions or contact our optimization experts at info@sciative.com.
To learn more about our AI-powered dynamic pricing tool BRIO , reach out to us.
