Excellent product quality alone can help family-run jewellers stay afloat: Anup Bhatnagar, Swarn Tarash Jewellers

Customer loyalty, the trump card for standalone jewellers, has gone forever with the advent of the millennial customer. This generation is more interested in making their purchases from the branded stores and behave differently there. For instance, no one bargains at branded stores but to stand-alone jewellers, bargaining is part and parcel of any transaction. I think they are to be blamed for such a practice by reducing rates and creating such an impression.

This reduces the profit margins of independent jewellers, who have no other option but to compromise with the quality of the product. The retailers will have to look for cheaper inventories in the market because of the low budget. Compromising with the quality is a trap, as it degrades the jeweller’s reputation. Besides, most customers buy once or twice a year nowadays. They have also become choosy enough to look for the best designs in order to buy a a 2-gram ring, they. Previously, people were not choosy, because they were buying gold. Now, they buy ornaments. Therefore, a standalone jeweller with a compromised inventory will have less variety to show and earn reasonable profit from. This leads to the customer opting for branded stores forever and pushing the other party towards a dead end.

This shrinks margins acutely and harms business sustenance. I think they have started an unnecessary competition with the branded stores by reducing their profit margins. The brands don’t care about competition but independent retailers did, as they used to encash their making charges lower than that of brands in the same vicinity. Those days are gone. The branded players have the advantage of more inventory and investment, which single-store jewellers can’t compete with.

Big brands also have reserves huge enough for owners’ sustenance regardless of losses running for a few years, but a self-funded single-store jeweller will have to shut his business down if he suffers losses for 2-3 years. With time, the legalities and formalities have increased manifold in the jewellery business. Unlike previous times, when the family members could jointly run the business, a well-equipped team is the need of the hour. So, the costs have definitely increased for the single store jewellers. So, if they squeezed down the profits, then they will be the worst sufferer. With the increase in gold prices, the sales volume has shrunk and retailers, in order to maintain the sales volume, give huge discounts on the rates which are not beneficial for the retailers. Product and service are the two most important things in our business and we can only give both of them if we run our business with a healthy margin.

I think it’s high time that they strengthen products and not just fair pricing. They must start giving high value to products and refrain themselves from establishing in the market in a compromising position. They should be confident enough to tell customers that they can compare their products with that of any other brand. I think it’s important to build trust amongst themselves and in the product. I think that they’ll have to be patient enough and observe the conditions before coming up with a final decision. The product should speak for itself. They should never try to compare their sales volumes with that of a branded store, because the latter’s investments are many times higher than the single-store jewellers. So, I think they’ll have to increase their patience without worrying about tomorrow.

They should create a niche for themselves in the jewellery market, whose USPs should be the product, service and policy. They’ll need to accept the fact that the sales of the brands will always be higher because of high investments and focus on sales as per their investment. They should give confidence to the customers that they will get the same quality of a branded store at the family-run jeweller’s store.

One advantage the family-run jeweller has over a branded jeweller is that the former’s products are always cheaper by at least 2-3%. Even today, 70% of the customers compare prices before buying jewellery. So, great quality of jewellery and a reasonable price will be a win-win situation for both the buyers and the jewellers. Otherwise, branded stores will push independent jewellers out of competition slowly and gradually.

Courtesy: Retail Jeweller India News Service