A multinational chain of department stores owned by Chilean multinational company S.A.C.I. Falabella, is the largest South American department store.
PS: HOW WILL CONSUMER TRENDS CHANGE POST COVID 19?
ALPANA: A big shift towards finishes will happen and this will be the key in coming times.
Right now business is very tough and will remain tough as we expect around a negative growth of 35% for the next two years as India may lose out a lot of orders.
PS: How do you think dynamics of sourcing will change?
Alpana: Dynamics of sourcing are changing very rapidly and everything is going to change.
As far as the lead times are concerned buyers are not going to work on longer lead times as they do not want to get stuck with inventories.
Shorter lead times are very important especially in these tough times to avoid cancellations.
Since new trade restrictions are coming in very often and even freight conditions all over the world are changing rapidly suppliers will have to work on shorter lead times as it would lead to less risk for supplier and buyers as well.
Over the last few months we saw so many cancellations of orders and delays because of lockdown related to Covid 19.
Today buyer wants to place order and receive it as quick as possible so that there is no delay due to lockdown or closures.
PS: HOW ARE BUYERS REACTING TO THE CURRENT SITUATION?
ALPANA: See in terms of manufacturing, buyers want to have an established, safe reliable sourcing base and want to associate with factories that are safe and hygienic.
Covid prevention conditions are very important for them right now than any other compliance and we are reciprocating the same to our suppliers.
PS: HOW IS TECHNOLOGY PROVING TO BE AN ASSET IN THESE TIMES?
Alpana: Technology will play a very crucial role in the coming times as all ways of working digitally are being explored currently.
Suppliers are presenting their products to buyers through virtual showrooms that has given buyers access to products, development, designs and fast has resulted in faster exchange of ideas.
The period when almost all countries were in lockdown there was no way business could be done. In such unexpected times digitization plays a very important role.
We have started developing programs like e-sourcing systems, online bidding programs, which will help us in doing sourcing,discussions, meetings, exchange information smoothly and efficiently.
Supplier’s needs to understand this shift as product presentation, negotiation, sampling, ideas cannot be the same like before.
Suppliers will have to elevate that experience for the buyer and create an efficient system.
Since the buyer is not meeting face to face and travel is restricted one needs to be perfect in costing, negotiation and invest in right technology and build up on this.
PS: CAN YOU SHARE FEW WAYS HOW BUSINESS IS GETTING DIGITALISED?
ALPANA: We need to shorten the lead times as buyers will be buying mid-season when they have budget allocation in interim season and at that point of time if they want to do sourcing online the bidding system or e- sourcing system will be the key.
For that supplier needs to be prepared on how to quote, how to negotiate and ensure that the first quote he sends is picked up buyer and whatever happened in the past is surely changing.
We have recently concluded some online home textile fairs which is a good progression.
All our meetings are done through virtual showrooms by vendors which have access to fabrics and development is more interactive and user friendly.
PS: How has the times affected relation with suppliers?
Alpana: We are working with very closely with our suppliers who have been with us for a long time and are reliable as well.
The working scenario is changing extension of credit cycles, shipments have been deferred and we do not have focus.
PS: What about vendors who have gone through immense pressure?
Alpana: Trust factor is definitely a big issue now, suppliers are going through immense financial pressure on working capital as they are running low on liquidity, the credit period have also been stretched and has affected stability of suppliers.
It is important to have a consolidated and reliable base, working and updating with vendors and updating them on details so that they understand the business dynamics and do not panic and know at least there is a some movement. We have deferred payments but we have not cancelled any orders.
Communicate with key vendors update them about trends, challenges and work more closely so that remain connected.
Nobody can hide from situation, strong communication is required it is imp to come forward how you see your suppliers posted, transparency is the key about time changing.
Communication and digital connectivity is important.
As a buying office we have digital elevated ourselves , we are using tech for virtual fitting, pricing, e-sourcing and this has keep sales figure running and this will be the norm for long time and we are training our staff and vendors on digital front,online meetings, e-bidding, fittings as this will be the key.
India runs on new products and good sampling but we need to have visibility with the buyer and create an experience for buyer so that communicate as much and elevate that experience for the customer and keep enhancing your sourcing strategy.
Orders will be my first concern as an exporter so what is your take on this?
South America we have did not first quarter good, our stores have started opening up, online sales are up by 40% and we have already started online in countries where we were not available.
Going forward all product categories will come back in vogue along with casual wear, keep enhancing what we have to offer, keep giving new finishes and products, they make sure customer is still interested,
Sourcing business does not work only on sentiments so buyers will eventually move out from China and diversify they are looking for opportunities,
be positive look at it as opportunity we can also have good number of sales, there is no reason why INDIA WILL NOT HAVE GOOD SALES build efficiency and product so that they keep on coming to you.