RJIF 2021: Agile leadership: strategic shift in business for managing risks, survival, and success in uncertain markets and future of jewellery business

Covid has played havoc in the jewellery industry and it’s tough to predict how badly the third wave will impact India. The need of the hour are leaders with agile mindsets capable to disrupt and reshape strategies for growth in this troubled times. The headline panel commenced with that spirit.

The solidified root of fine jewellery industry with the cultural and societal gamut of India has helped tide over the crises better as compared to other sectors, explained Ajoy Chawla, CEO Jewellery Division, TITAN COMPANY LTD which happened through share-of-wallet gains as other discretionary purchases dropped. Talking about post-Covid trends, Chawla emphasized, “Safety has become a prerequisite for trade and a significant competitive advantage, which customers walking in a physical store, demand first.” Pointing out another important trend he said,  “Digital has been a revelation. We were working on the digital piece for a few years and now digital and remote shopping has become a way of life.

“We have seen that the customer interacts with us comfortably on digital media. From almost nothing, the new -age method of retail including online, omni, endless aisle and try at home have contributed to 13% of business in the last quarter,” said Chawla. The third big trend is the need for lighter weight jewellery even as consumers seek more adornment and an assured investment value. That trend amongst middle class consumers, stated Chawla, will stay till gold price rises at this rate.

When asked how Reliance Jewels is managing risk on the product front, Sunil Nayak, CEO, Reliance Jewels said that a strong product is the only factor assuring longevity of a brand.

The first important step by Reliance Jewels on that note is executing a strategy to own the designs (they sell) backed by strong research based findings on regional product preferences and gaps. “Owning the designs we create will be the key differentiator for a Reliance Jewels product.”

Sharing an interesting insight from the brand’s in-depth market research to strengthen their product proposition, he stated, “14 carat gold jewellery contributes over 20 percent to the revenue. Our penetration of this category is quite strong in tier cities, treated to be the rigid choices in those regions until now.” 

The second is retaining regional exclusivity while ensuring individualism in every design to sustain customer’s excitement. “We believe that a design must have regional relevance besides being nationally trendy,” said Nayak, explaining why the brand is aggressively diversifying design studios in regional and state levels. The third is creating new occasions for purchase. Nayak claimed that the modern jewellery consumer doesn’t only shop for festive occasions and Reliance is increasing the opportunity to consume jewellery by launching special collections for less-celebrated occasions in India, thus giving the end-consumer a new reason every now and then to consume jewellery.  

When asked how job losses in the market is putting an impact on high-value sales, Dipu Mehta, Managing Director, ORRA Fine Jewellery shared how ORRA took the cue from market growth through credit in The US and democratized diamond consumption through EMI facility at 0% interest. “ORRA drove desirability in diamonds during pandemic by introducing EMI facilities at 0% interest rates. This increased average ticket size by 2.5 times and increased customer acquisition almost thrice,” mentioned Mehta. On the same note, Nayak talked about how Reliance Jewels is promoting silver collections to make the entry barrier for precious jewellery easier for the young and economically marginalized segments.

Talking about luxury consumption in Covid, Vinod Hayagriv, MD & Director, C. KRISHNIAH CHETTY GROUP explained that post-Covid, the market has become interestingly challenging as anyone regardless of scale of investment can set up a jewellery business and succeed. “Full disclosure is a prerequisite for any brand to succeed. Setting up a jewellery business in India is easier than ever and customers will patronize transparency in businesses and zeal to deliver,” he said. Again, the government is rallying behind to clean up the acts of the industry. So, with a good balance sheet and noble motives, the path ahead for success is crystal-clear for any retailer, as Hayagriv feels that in India, everyone including the richest will pay for a good product.

Unusually in Covid times, brands such as Zoya by Tanishq clocked in a 15% growth in 2020 and over 300% growth in the first quarter of 2021. Detailing his observation, Chawla maintained that Zoya is at an early life stage as a brand.

“We observed customers celebrating micro-moments, which helped in conversion even in a high alert city (due to uptick in active covid cases) like Mumbai as we provided try-at-home options,” said Chawla. He also mentioned how offering digital solutions captured trapped demand from hinterlands of India. Such trends, mentioned Chawla, has helped Tanishq acquire almost 45% more new customers in 2021 than 2020. 

Following that chain of thought, Mehta shared how the readymade ORRA gift boxes have instilled a sense of urgency and propped up increased buying interest. This has made purchasing decision easier at times when the customer doesn’t want to spend long outside their homes selecting a product because of safety concerns. 

Besides serving consumers with authentic designs, the industry must be grateful to the source of the same, the karigars, who continue to work in harsh, polluted conditions, mentioned Chawla. This has led to an acute shortage in craftsmen across the country and raises fears of an entire generation deserting this profession. Supporting Chawla’s claim was Hayagriv who said, “Jewellery brand heads must find time to informally examine working conditions at the vendors’ establishments and explore ways by which that can be improved with better lighting, water supply and related services.”

Tanishq has been pushing for responsible sourcing for last couple of years. The young consumers of today will measure a brand by their fair and responsible purchase practices, said Chawla. Agreeing to Chawla’s comment on pushing for an industry -wide trend to develop working conditions, Hayagriv proposed a change in the corporate structure, asking brand heads to expand workforce with staff dedicated to compliance and ethics for inspection of vendor’s facilities.

While acknowledging the bumpy ride the industry is going through due to Covid, the panelists agreed that a new generation is getting into discretionary spending and thus, opportunity is huge for the industry. Constant attention to design exclusivity, service quality, and the overall agility of businesses will push the industry towards impressive growth post-pandemic. 

Courtesy: Retail Jeweller India News