Lenient but complicated, current lockdown pushes brands to adapt and innovate

India has withstood a lot of business uncertainties since the pandemic struck last year. There is still no clue on what the times ahead will bring, but it is always worth assessing the past and adapting to a volatile future condition with lockdowns here to stay in case of hike in Covid-19 infection. In an exclusive conversation with the trade, Retail Jeweller India finds out the major differences between the two lockdowns in terms of business and consumer sentiments.

Prepared for inadequacy

A year on, jewellers feel that the consumers have accepted the fact that lockdown and related strictures are a part of life now. Aayush Khurana, Director, Khurana Jewellery House, Amritsar, says this feeling is palpable in small towns and cities like Amritsar where the second wave didn’t have a major negative effect. In major cities, there’s a lack of confidence around jobs, considering most businesses are downsizing operations due to shortage in demand.

Another reason behind better customer response is the complete vaccination of the elite Indian families. Echoing his thoughts is Selvakumar Manickam, MD, VS Selvamaligai Jewelry from Salem, who feels that the price of gold has been stable.

Rakesh Aggarwal, Director, Raghunandan Jewellers, Meerut, said that control in Covid-19 infection in the US and Europe have led to stability of gold prices in those major markets, whose effects are faced by India now.

Aggarwal disagrees with the notion of rural India having it easy with the virus this time. He instead says that the high infection rates in several rural regions have created an adverse reaction to jewellery purchase in even major auspicious occasions. This dip in jewellery demand has delayed the industrial recovery by 5-6 months more, believes Agarwal. Similar is the observation by Shreyansh Kapoor, Vice President, Kashi Jewellers, Kanpur, who feels that the higher mortality rate due to the second wave has wiped away luxurious aspirations altogether.

Consumer behavior and its impact on the market

Once vaccinated completely, people are walking in stores. “They aren’t hesitating in stepping out to purchase, provided that they are taking necessary precautions,” said Khurana.

Also, the government has allowed many industrial units, including jewellery, to work in a limited manner during this lockdown. Thus, there is no shortage of labour and the inventory, according to Anil Talwar, managing partner, Talwarsons Jewellers, Chandigarh, is moving faster than 2020.“The stock market is performing well. So the market sentiments are positive this time unlike last year,” Talwar maintained.

Talking about the lenient lockdown norms this time, Aggarwal said, “This time, the trade was allowed to open the stores for few hours a day and do business by following all the Covid protocols.” Regardless, the retailer appreciated how e-commerce has become the saving grace for many jewellery brands this time.

“I believe that online is the future and thus, we are planning to enter the e-commerce space in the coming months to reach out to more customers,” he added.  

Another impact of stable gold rates is the absence of panic buying this year, reflected Selvakumar Manickam. “So, the sale of gold will definitely pick up once the market opens as there is no other metal like gold where people can invest their money in,” Selvakumar said.

For Kashi Jewellers, rural weddings constitute 60-70% of business comes from weddings. However, due to the lockdown, April and May had seen zero sales, despite each of the months having 10 and 18 auspicious days for weddings respectively. “Such a huge loss has negatively impacted the capital as there are few auspicious occasions for marriage in June,” said Kapoor.

Shifting gears for a lockdown-friendly business strategy

In terms of advertisements, Khurana Jewellery House has minimised their outdoor expense and has allocated relatively more resources to online, social media and influencer marketing. They are also undertaking a new project to explore e-commerce with the intent to give customers an omni-channel experience with virtual appointments, home trials and collections tailor-made for pandemic-conscious small gatherings.

As far as inventory management is concerned, Kashi Jewellers is against minimizing and liquidating the inventory, as the cost of acquiring that today would be much higher than revenue earned from selling it.

Other companies such as VS Selvamaligai Jewelry have changed their marketing approach to a more sympathetic tone this time. Selvakumar said that the brand didn’t make calls to customers like last year as many have lost their loved ones to the virus. They are also not promoting collections on social media.

“Gold is the safest metal and we should not worry about the demand as whenever the market fully opens, people would surely come to the shops to buy jewellery,” added Selvakumar.

Written by Manoj Chakraborty