10 Brilliant Insights For 2019
Have the challenges of the past year left you feeling crippled and confused? Vijetha Rangabashyam finds out from the country’s leading jewellers the fissures they felt in 2018 and how they are going to overcome the obstacles going forward
Last year was unbelievably difficult for the industry. Just as jewellers were picking up the pieces after the disaster that was demonitization, another huge blow emerged in the form of a huge bank fraud ever to be committed. Thanks to a few indiscretions, banks are not forthcoming with financing the industry anymore. Added to this, De Beers’ entry into the lab-grown diamonds space has left a sour taste in all the major diamond trading markets and India too is perturbed by this move. Retailers across the board saw fewer footfalls and the sentiment which otherwise becomes upbeat during festivities didn’t seem positive. The fall of the Rupee has certainly not helped the situation. Small scale and mid scale jewellers are feeling the pinch the most – many manufacturing units have shut shops and some have even moved onto other professions.
All said and done, at the beginning of a brand new year, we should be inclined towards staying positive. We should learn from our mistakes and apply our learnings to grow and become better. Instead of ruminating over the past, we thought the industry should reflect on their experiences with some insights from leading retailers. Organized players have the fortitude and foresight to thrive in any situation and from them we have managed to jot down some of the biggest learnings of 2018.
1. Don’t try to sell at a cheaper cost to cut competition, Jithendra Vummidi, Vummidi Bangaru Jewellers, Chennai
2018 was a mixed bag. Gold price was very high from the beginning of the year. When price goes up, customers like to postpone their buying and that reduces the momentum of the business. Our production process is also continous and when the gold prices go up, the workers are also affected. When production slows down, expansion also takes a beating. The intention to buy is there, purchasing power has improved and issues relating to GST have also settled. Across India, people are able to transact without worrying about increasing their costs incurred from taxes. This year is also very important because of the elections – things will look up as long as we have a stable Government at the centre. The biggest challenge for the industry has been moving from a cash centric industry to a completely digital one.
Moving forward : Improving our design offerings to the clients and also see how we can improve our services. Billing time is a big challenge for us and we are trying to reduce that. We are trying to embrace the ‘go-green’ initiative in whatever capacity we can and we will continue to ensure all our wastage is properly disposed off. Word of advice : At the core of any business lies profit. Don’t try to sell at a cheaper cost to cut your competition. Customers are not worried about paying more money, but they expect more value for your offering. As long as they perceive it as valuable, they don’t mind paying for it. Competition is good, but you can’t enforce it by ambushing. Don’t compromise on quality and integrity in order to slash down prices. We need to lift everybody along with us in this trade. You can’t grow as a retailer if your artisan is in a bad situation. They need to be remunerated sufficiently so that they will also be able to face an adverse situation. Don’t use child labour just because it is cheap.
2. People Want Stories, Abhishek Chanda, Kalasha Fine Jewels, Hyderabad
2018 started on a good note. But in South India, as per astrological (Telugu) calendar there weren’t many auspicious occasions. Only three months were good for auspicious events, hence buying during the wedding season was relatively low. However, the gold price here was stable and hence some people made advance purchases. In 2015-2016, people went for heavy diamond pieces but in 2018, because of all the big Bollywood weddings, the focus shifted to jadau and polki jewellery. When Padmaavat released, heritage jewellery was in demand and we saw more enquiries generating from that end. Earlier, in Hyderabad and other places in Andhra Pradesh, spending on a bridal piece would fall in between Rs 20-30 lakhs. Now, they are buying more number of pieces for the same amount. Brides also want multipurpose jewellery – they are spending the same amount of money but the jewellery has to be wearable in different ways. Diamond prices in the local markets were coming down last year. The trust factor is low, and people are losing confidence in diamonds and the Nirav Modi scam also played a major role in this.
they are accommodating only existing brands. Moving forward : We need to educate our clients. We are planning to come up with a campaign that informs the customer about buying quality jewellery. We want our customers to know what they are buying. Word of advice: Running a business is like operating a kitchen. You cannot use yesterday’s food today. Over inventory is dangerous and by the same token under stocking is also not good. In this business, moderation is very important and we need to make smart moves. We need to keep ourselves updating and be aligned with the changing times and trends. Give less importance to old ways of marketing like hoardings and spend more on social media campaigns with the help of influencers. Remember, people want stories!
3. Adopt Optimum Inventory Solution,Ketan Chokshi, Narayan Jewellers, Vadodara
The common response when we spoke to our peers was that the business was down by 20-25 per cent in 2018 across the country. For us, growth was quite stagnant; we weren’t able to grow beyond 5-10 per cent. It was a very challenging year – I think the impact of GST and demonization was felt throughout the year. A lot of old gold exchange has happened this year – that ratio significantly shot up but cash was a big issue. Moving forward: You need to change fast! We are a growing economy; the world is evolving every single day. We as a jewellery industry have not been able to change at a faster pace. Considering the younger generation is now taking over the industry, they understand the essence of change than their predecessors. Also it is important to identify your strength and play according to the same. Analyse the past year and plan accordingly.
Word of advice: Two aspects are integral to the retail industry: you have to adopt an optimum inventory solution - inventory categories are evolving at a very fast pace. Sometimes one category has a very high demand while the other has absolutely no demand. Be very watchful about your inventory and make sure you have the right category in stock.
4. Don’t paint all clients with the same brush,Mahesh Jagwani, Mahesh Notandass Fine Jewellery, Mumbai
2018 was a little difficult for everybody. Diamond sales had seen a significant drop due to various reasons and gold sales remained stagnant. People are buying smaller and trendy pieces as opposed to heavy, large pieces. Uncut and polki pieces are seeing a lot of demand and that is also affecting the diamond sales. So, we have not really grown in the past year but we are hopeful for this year. De Beers is also doing a lot of diamond promotion campaigns because of the entry of synthetic diamonds.
Moving forward: At one point of time, we tried to cater to all segments of clients. Now things have become very specific. You have to identify your niche and also narrow down your audience. With more number of corporates coming in, clients have been split. Now every area is a jewellery hub. It is important to hold your clients, understand them and offer the right kind of product to the right kind of client in the vicinity
Word of advice: Be very focused. Times are becoming very difficult and competitive. Design should be given paramount importance. Consumers are becoming increasingly conscious about the quality of the products they buy, so make sure you maintain the goodwill you have built with them over the years by sticking to quality.
5. Targeted marketing Is key,Rishi Verma, Fateh Chand Bansi Lal Jewellers, Ambala Cantt
Last year was not great; it did not meet our expectations. Diamond sales have dropped and profit margins have come down. Moving forward: Marketing has to be very specific and targeted. You can’t be running around putting hoardings for everybody to see anymore. First you need to identify the kind of people who would be interested in buying the kind of jewellery you have in stock; for example if you have polki jewellery, then you have to identify the prospects for polki and those that can be converted and then target them specifically rather than going haywire with the marketing spends. Word of advice: You have to be very passionate about the business you are in and you need to learn to respect time!
6. Jewellery buying happens with reason and has become strictly need-based,Saumyha Sanjjay, AVR Swarnamhal Jewelry, Salem
2018 was very challenging, because there were a lot of policy regulations implemented by the Government. Rules regarding GST and PAN Card kept consumers from buying jewellery in bulk. Earlier, people used to invest all their excess cash in gold but now people are thinking twice because of all the rules that have been set for the jewellery industry. Again for small, unorganized karigars, producing bills was not an easy task. Gold used to be the second largest investment, but now it is not the case anymore because of the change in the mindset of the end consumer.
Moving forward: We always believed in planning. But now with all the policies coming into place, we are not in a position to take risks. We used to experiment with designs a lot but now customers don’t want to buy heavy pieces. Buying has become strictly need-based rather than something people want to splurge on, and buying only happens with reason. So planning is very important because you don’t want to keep excess of something that is not going to sell. Also tweak your inventory as per the season – the large pieces only sell during the wedding season. We should update ourselves with the current trends to provide the consumers with the latest.
Word of advice: We need to travel a lot and keep our eyes and ears open. Give importance to the Big E – Exposure! We need to adopt technology – I think smart working is possible only through technology. Embracing technology not only helps us in sales but also stock. Never forget about customer service. In fact, use technology to enhance customer experience.
7. Invest in designs keeping in mind the economic scenario,Vikram Talwar, Talwarsons, Chandigarh
2018 was a very challenging year, primarily because customers were still dealing with the after effects of GST. Paying an additional 2 per cent after VAT on something they typically buy as an investment put them in a difficult position. Though the cash market has recovered in the last three months, people are still apprehensive about holding large amounts of money and spending the same and that had its ill effect on jewellers. People were more comfortable spending Rs.1 lakh in cash on jewellery 2-3 years ago but after demonetisation the level of confidence has certainly come down because they know that the value of cash has come down. In general the sentiment on gold has shifted – people used to splurge on gold and that is not the case anymore. Light weight, wearable and practical jewellery have been the focus this year.
Moving forward: You have to design and allocate weight for a particular piece of jewellery based on the prevailing economic situation. Earlier, the bridal jewellery in our store would begin with 200 grams but today it starts with 100 grams. Customers who want to purchase 100 grams of gold want to be treated as a bridal customer.
Word of advice: If you think times have changed, it means you are already late. Change does not happen from the retail end but always from the customer’s end. If you are feeling the change, you should be worried that you haven’t caught up!
8. Major shift in decision-making from older generation to millennials,Vaibhav Saraf, Aisshpra Gems and Jewels, Ghorakpur
2018 for us was good compared to the previous years considering the fact that there were less number of wedding dates – our year-to-year average was up by around 10 per cent. We also saw a 20 per cent growth in our diamond sales. Moving forward: I think we need to keep constantly evolving in terms of technology and customer experience. Usually jewellery buying was always a family affair, but in 2018 there was a major shift in decision making from the older generation to the millennials. We need to engage with them on all fronts, from technology to design and customer experience. Word of advice: I think it is all about customer experience – from advertising to post sales, the kind of experience you give your clients can make or break your business.
9. Give utmost importance to quality and standardization, Tejpal Ranka, Ranka Jewellers, Pune
think the aftershocks of demonetisation and policy regulations were pretty evident in 2018. The year was pretty stagnant for us and we didn’t see much of a growth from 2017.
Moving forward: Right now we are facing competition from both national and small-scale jewellers. Even the small jewellers have realized the importance of standardization. They now know that if they don’t give the consumers quality products, then they are not going to come back to them. I think we need to give utmost importance to quality and standardization. Word of advice: Honestly, today every product is available everywhere, so the only way to stand out is through offering great customer relationship and enhancing the buying experience. Also, compliance is very important, stick to your processes and that will help you in the long run.
10 React faster to trends, Rohan Sharma, RK Jewellers, South Extension 2, Delhi
2018 was definitely difficult as compared to 2017. First of all the wedding season was delayed by a month based on the Hindu calendar, so the business only picked up towards the end of the year. Growth in numbers was the same as 2017 – no big change. As far as trends were concerned 2018 was very happening! When it came to bridal jewellery, trends were both interesting and intriguing. Earlier, only a particular type of bridal jewellery would sell but I think all the big weddings influenced the consumer preferences.
Moving forward: Concentrate on inventory optimisation and react faster to trends. You can’t put all your eggs in one basket. When the trends shift, you need to be able to cope with the situation.
Word of advice: Firstly, be aware of the changes that are happening in the fashion industry. Secondly, at the end of the day, you need to keep your customers happy, so ensure that their demands are met. Lastly, make sure you don’t tie all your finances in one category; you need to distribute it across all the categories of jewellery.