Fri. Jun 14th, 2024

The other day at Hill Road, at one of the many stores I saw something peculiar. Branded stuff available at fixed rate. Now one of the two is acceptanle but both just takes away from the experience of street shopping. Turns out the shopkeepers are not in the mood for haggling. They have discovered that at a fixed price point – 300 Rupees for The Souled Store t-shirt or a Zara top for 400 is a fair deal. It saves everyone the trouble and makes shopping more efficient.

What makes this even more fascinating is that it works for both the consumer and the seller. The focus is now on maximising the purchase, and increasing the average order value. With the price settled, the priority of the sales staff is to get you a piece that fits and then get 3 more in the same category so that you go home with more than what you had come for. This is not the case, in Linking Road where they begin the pricing with an obscene rate at first until you do the song & dance of walking away, hard bargaining until they sell the merchandise for 1/4th of the initial quoted price.

What divides the two? It is the target segment. But apart from that it is also the information asymmetry which allows the shopkeeper to keep the prices dynamic, as they classify and categorise the walk in customers. At Hill Road, this segmentation is not possible as the rates are fixed. The categorisation is done to decide how much time to spend on the prospect. No wonder I never get any attention at such stores. This kind of market research is important to put things into perspective for various D2C brands which have become popular over social media.

In fact seeing so many of them on Shark Tank S3 was a revelation to me. The apparel business in India is only booming. And yet, the sellers on the street are unperturbed by it. They are happy to sell the export rejects and still hold onto their market share. D2C brands on the other hand obsess over design language, packaging, time for delivery, refunds and so many ancillary things – all at the same time chasing the elusive ROAS – Return on Advertising Spend of 4:1, earning 4 times the spend. And yet, the street sellers focus only on maximising their value through volume or pricing.

Retail therapy is long accepted as a reasonable way to care for one self. And the sellers online and offline both seem to agree upon this and constantly serve to influence that experience. Whether it is the satisfaction of buying a great product or getting a steal. Chasing the high seems to be the mantra for all.