New Developments that marked the year 2018

Digital Ads no longer for sale:

Empowered by digital media, jewellers drive new meaning into communication

Jewellers no longer advertise only to drive sales. Associating their brand with socially positive messages and giving it emotional content are also powerful motives. Any jeweller would welcome the chance to equate its brand with positive emotions and its jewellery with values that go beyond price.

The average Indian retailer is not yet on this elevated plane. Nonetheless, jewellers are beginning to understand that going digital can bring new meaning and energy to their brand communications. Some are producing campaigns, promotions and videos that engage their target audience, often by delivering altruistic messages.

On 8 March this year, International Women’s Day, P C Chandra Jewellers, Delhi, launched a video campaign urging people to “uncelebrate” the day. The video featured women from all walks of life describing moments when they experienced bias. The point was that every day should be Women’s Day.

The campaign drew flak, as expected, but its message resonated with many women viewers. It also associated the brand firmly with progress in gender relations.

Orra Fine Jewellery communicated its philosophy of inclusiveness with a video featuring visually challenged children. These children, the jeweller said, were the inspiration behind the Shruti Ganesha pendant of its Mantrasiddhi collection, which had an “Om” etched on it in Braille.

The video had Orra’s CEO and its head designer Rupam Singhal, narrating the story, and explaining how the brand touched the lives of children living without sight.

Another instance is #BestAtWork by Mia, a brand of Tanishq. The video sought to break the patriarchal stereotype according to which a working woman cannot achieve work–life balance.

CaratLane launched a video aimed at removing the misconception that a Valentine’s Day gift is only for lovers. The video made the point that Valentine’s Day is an occasion to express appreciation — even, for example, to a kind-hearted workplace colleague.

A video message from Om Jewellers, Mumbai, shows the owner himself telling customers about a new collection. It showcases the personal connection and commitment that the brand seeks to achieve with its patrons.

Consumers like to feel that they “know” any brand they invest in. They want the brand to share their beliefs and values. For jewellers, this is an opportunity to keep a conversation going. They are happy to invest in digital content that connects their brand with concerns that its consumers, as individuals, share. It is a fine way to build trust.

Heritage jewellery becomes haute couture, and retailers seize the moment

A year has passed since the great big Anoushka Sharma–Virat Kohli wedding. It was a great big media event as well but, more importantly, it has had a significant impact on jewellery tastes. Pastel meenakari, jadau and polki have come roaring into style, thanks to the celebrity couple’s choice of jewellery, and to the superlative visual presentation by designer and couturier Sabyasachi Mukherjee.

Retailers agree that it is the fashion czar Sabyasachi who, over the last few years, has driven this change — making 2018 the year to bring out one’s grandmother’s priceless polki from the locker and flaunt it fearlessly.

“Until two years back, heritage jewellery was not even 5 per cent of my inventory,” says Hiren Zinzuwadia from Zinzuwadia Jewellers, Ahmedabad, Gujarat. His company went into the heritage category just two years ago, after Sabyasachi had begun to popularise the category. “Now diamonds and heritage jewellery are at par, comprising a total 50 per cent of my inventory.”

Where once retailers of heritage jewellery found the middle-income, price-conscious market a tough nut to crack, now there is a real appetite and aspiration for the style. Celebrity exposure has helped send heritage designs flying off the retail shelves. Even customers with small budgets, Zaveri says, aspire to own at least one set from this category.

It doesn’t take a Burmese ruby or Colombian emerald to look luxurious in this style. A budget of Rs2 lakh buys one a heritage-style set featuring semi-precious stones with perhaps a modest show of pearls — and a million-dollar smile on the customer’s face.

An advantage for retailers is that brides aspire to the complete look, including the matha patti and nath. This increases the overall value of the transaction.

Retailers tell The Retail Jeweller that heritage is replacing diamond as the wedding-day jewellery of choice. “If you look at jewellers’ advertisements now,” says one retailer, “diamonds are fast being replaced by polki and jadau.” Many well-known diamond jewellers are adapting quickly and pivoting to cash in on the trend.

Take for example K ZinZuwadia Legacy, which this year launched Sahiba, a sub-brand exclusively for heritage designs. This is the jeweller’s first foray into this category, and it has clicked. “Consumers come asking for Sahiba,” says Hardik Zinzuwadia, owner “and the brand is doing unexpectedly good business.” It is doing so well that they jeweller has allocated to Sahiba exclusive show-windows and visual merchanding, as well as a whole floor out of the showroom.

Most jewellers say they are pleased with the rise of heritage jewellery. The category is not assailed by the kind of insidious quality and price comparisons that have troubled the diamond category. It is profitable and the margins are high.

It helps that top-quality design direction is available, albeit indirectly. While Sabyasachi sells one piece of a heritage design, other jewellers can and do develop lighter, watered-down versions and sell them in large numbers.

The bottom line? This has been a great year for heritage jewellery. Sales in the category have exceeded expectations of most retailers.

Online goes from visibility to enormous viability

Consumers today spend a great deal of time refining their choices online, particularly before buying anything. Whether shopping for entertainment, daily necessities or luxuries, the Web is the first port of call.

Because he himself researches online before making any purchase, says Aditya Pethe, owner, Waman Hari Pethe Jewellers (WHP), Mumbai, it stands to reason that jewellery consumers do the same. So it is imperative for a jeweller to be online, where the consumers are.

“Over the past three years, it has become routine for people to search online before any jewellery purchase,” says Mohit Shekhar, owner, Manoharlal Saraf & Sons. “People walk in to the store with a design on their smartphone screen, based on which they shop. Referring to designs available online also leads to a lot of customisation.”

For many jewellers, their first step into the Web world was setting up a website. Even for well-known brands, going online helped connect with a younger generation of consumers. Over time, visibility and outreach were extended to virtual storefronts, and ecommerce sales began. The next shift expected is that online jewellery sales are no longer limited to affordable designs.

Take WHP, for instance. It has an ecommerce platform, but, as Pethe says, “It was tough to attract the requisite traffic to the portal, even as recently as a year ago.” Not any more! Customers who once used the website chiefly to locate nearby outlets and find their working hours, have turned to shopping there. Just within the last year, says Pethe, WHP’s portal has begun to generate sales at a significant level.

“Yes, our products available for online sale are priced at under Rs20,000,” says Pethe, “and yes, our ecommerce turnover comprises not even 1 per cent of our annual turnover. But it is growing steadily. I feel that our online sales will eventually enter the mid-priced territory.”

Readying for this shift, retailers are fervently feeding their online profile. They are using every available avenue, especially social media, to promote their latest designs, present the latest and brightest customer testimonials, showcase the lovely brides they have adorned and publicise their latest offers.

Ishu Datwani, owner, Anmol Jewellers, Mumbai, says social media enables the next level of brand promotion — all the benefits of being online, without the hassle of running a website.

“I had a Saudi client who flew down to Mumbai to buy a piece of jewellery she loved, having seen it on Instagram,” says Datwani. Anmol has sold jewellery worth more than Rs80 lakh in the last month alone, he says, and just through Instagram.

Jewellers are well aware now that a website or app typically is the first brand touchpoint for a consumer, and that the influence of social media on brand discovery and development is growing dramatically. It is no surprise that they are increasingly eager to have social media influencers endorse their brands. They are learning that using the new media effectively can drive business to their brand, even at the cost of brands that are much bigger and better-known offline.

It’s a heady opportunity.

GJEPC’s shows the Human face of the industry

The Gem & Jewellery Export Promotion Council (GJEPC) can rightly be proud of what it has achieved for the industry. More or less singlehandedly the council has, over the decades, built up a rock-solid ecosystem of manufacturers for the export markets. No amount of credit is too much, given the scale of the GJEPC’s contributions. To take the crudest measures, the industry is now responsible for fully 7 per cent of India’s GDP and over 5 million jobs.

As part of its corporate social responsibility (CSR) programme, this year the GJEPC chose to capture and frame itself. The black-and-white photographs by the renowned photographer Santosh Verma offered glimpses of the innumerable people that constitute the vast, well-knit family of the gems and jewellery sector.

“We wished to humanise the gems and jewellery industry by giving it a face,” says Ronnie Wadia, senior partner & creative director, Alok Nanda & Company, who arranged the photo session. “The backbone of this industry is its 5 million skilled workers, including gemstone cutters and jewellery craftsmen. The kaarigar became the face of the campaign, and through him we told our story.”

The GJEPC’s aim for the photography session was to bringing this contribution to public knowledge. The session showcased how the gems and jewellery industry has contributed to the nation’s growth, while nurturing millions of craftsmen and their families through their lives.

The campaign is part of GJEPC’s larger objective to rescue the image of industry. This was felt necessary because of the reputational damage caused by the gigantic bank frauds allegedly perpetrated by jewellers Nirav Modi and Mehul Choksi. The scams came to light in February this year and badly dented consumer as well as banking goodwill towards the industry.

The GJEPC swung into action early, soon after the media frenzy began dying down. The industry had been left to cope with the stress of falling demand and tightened liquidity. The council’s publicity campaign sought, therefore, to rebuild a positive narrative, underscore how well the industry has stood the test of time and show that Modi–Choksi were no more than a terrible exception.

The response within the industry has not been universally appreciative. Considering the lacklustre domestic business environment, some insiders would have liked to see other priorities addressed first. They view this CSR campaign as resources wasted on image-building when what retailers really need is a campaign to pull customers into stores.

As an export promotion body, the GJEPC organises two of the largest jewellery trade shows in the country. So, according to a top retail industry spokesperson, what the council needs is to focus on growth for retail jewellers.

That said, every bit helps when times are bad. Given the GJEPC campaign’s focused approach, supporters can hope that it will soften the banks’ currently rigid and blinkered approach to the industry, and draw some sympathetic attention from policymakers in government.

A diamond by any other name Grown diamond jewellery now retails alongside premium jewellery brands on the high street

Renowned high-street jewellery retailers and chains in India, including many revered names, have felt themselves reduced to observers, — bystanders powerless to address the slow, sustained rise of a new genre of jewellers. Jewellers, that is, who promise diamonds at half the prevailing market price of diamond.

Fiona Diamond is the first retailer in India to give a serious push to the cause of conflict-free stones that shine as brightly as diamond. “Customers thank me for saving their money. They are excited to own real diamonds — bigger diamonds than they believed they could afford, at prices lower than they could ever have imagined,” says Parag Agarwal, co-founder. “Some of them say they are upset at their family jewellers for never having informed them of this choice.”

Their official website publishes explanations of why the stones they sell are, in fact, true gems. These gems are real, they say, in the same way that a test-tube baby conceived in a laboratory is real and unquestionably human. Lab-grown diamonds, they say, are grown from the same carbon seed as natural diamonds, by the same process, just not in the womb of Mother Nature.

Fiona Diamonds started out at the business-to-business (B2B) end of the market in 2010. In 2017, it got access to steady supply of various shapes, sizes and qualities of grown diamonds, and the company ventured into jewellery. Its stones now have an average carat size of 50 points.

The retailer has organised itself, strengthened its merchandising team and begun creating collections for consumers. It pitches grown as an alternative to the mighty natural diamond.

The category has received a major boost recently with the launch of De Beers’ Lightbox line of grown diamond jewellery. Fiona’s production and demand, Agarwal says, are also increasing at a breathtaking speed. Business, he says, has grown by 150 per cent from the time he started in the third quarter of 2017. It helps that Fiona grown diamonds come with a consumer-friendly 100 per cent buyback and exchange offer, as well as an EMI plan in which a 1-carat stone can be had for Rs9,000 a month.

The company is using its first-mover advantage to drive the expansion plan. There are four company-owned stores at present, and six franchisee-owned outlets. Next year, there will be four more.

Grown diamonds are, without a doubt, well suited to today’s marketplace. They make a strong appeal to contemporary consumers, they don’t break the bank, they offer the impeccable look and flawless finish of good natural stones, and they are here to stay.

Domestic council standoff: Issues and views:

It is heartening to see Minister of Commerce and Consumer Affairs Suresh Prabhu echo the industry need for a national domestic jewellery council. To expedite its formation, in August this year, the ministry formed a working committee with representatives of 14 jewellery associations from across the country; and Manoj Kumar Dwivedi, joint secretary, Ministry of Commerce and Industry, was finalised to head the committee. Despite initial momentum, however, the drive fizzled out.

According to Nitin Khandelwal, chairman, GJC, the move was stalled by an explosion of demands. “Every jewellery association, no matter how remote,” he says, “insisted on equal representation on the council.” This was not practical.

“Jewellery exports work according to a model wherein a national-level umbrella association represents local export associations,” Khandelwal explains. “This model does not work for the domestic council, where the aim is to create a unified body to voice key industry concerns.”

The domestic industry is already well served by a plethora of associations. Unlike in the export sector, though, domestic groupings are not all organised or equipped with a specific mandate and procedures.

Nor could the government immediately give a mandate to an organisation whose electoral policies and breadth of industry representation were, at the time, still to be established.

Sabyasachi Ray, executive director, Gem & Jewellery Export Promotion Council (GJEPC), says it is too soon to decide whether the Domestic Council will be an association of associations. “Suresh Prabhu, minister of commerce and industry, suggested an electoral college similar to that used to elect presidents of the USA,” he says.

Inclusiveness is at the heart of the proposal. “It is necessary to gain the approval of all jewellery associations across India,” says Ray, “so that even the smallest jewellery retailers and manufacturers find the council’s policies conducive.”

This is why the government formed the original ad hoc committee of 14 major jewellery associations, and asked it for advice on constituting an electoral college for the domestic council. This committee has met with the government twice, and a third meeting is expected soon.

The planned working committee, Ray says, will help organise the mammoth unorganised side of India’s jewellery industry, in order to boost its potential. The committee will also act, he says, as the chief lobbying body through which the industry can voice its concerns to government, just as the GJEPC does for the export sector.

No date is fixed yet to announce this working committee, but it’s becoming clear that industry as well as government are on track for its formation.

DPA: Setting natural diamond in consumers’ hearts

Natural diamonds need a champion. In today’s constrained market, consumers are ready and willing to appreciate jewellery that features lab-grown diamonds. The natural diamond industry, therefore, is looking for ways to reassure consumers about the enduring value of natural diamonds, and remind them why these gems remain priceless.

The Diamond Producers Association (DPA) is on the job. This industry body, representing eight of the world’s largest miners, is working hard to reinforce consumer awareness of natural diamonds as grown diamonds begin to compete seriously for a share of demand.

The DPA’s standout intervention has been the “Real Is Rare, Real Is a Diamond” campaign, in which thought-provoking video advertisements were launched across India, and across cultural barriers. The ads have reached as much as 75 per cent of the target audience in India.

The campaign draws inspiration and insight from recent, in-depth research into modern Indian relationships. This research included interviews with multiple young couples, which revealed a successful connect in their minds between the perceived worth of real diamonds and unique moments of their own happiness and celebration.

The DPA is reaching out to Indians organically, for instance through its YouTube channel, which has over 20 million views.

The organisation is not in a hurry. India accounts for a mere 7 per cent of global diamond consumption, which the DPA reads as a huge growth opportunity. It knows that opinion formation takes time, especially in a market where the natural diamond faces tough and unfair competition from CVDs, or grown diamonds.

After five months of concerted activity on social media in India, the DPA campaign has bagged an engaged audience of 30,000. This comprises individuals who are genuinely interested in diamond facts, stories, and education. It is also faring well with the target group of married couples in the 26–40 age bracket.

The organisation also has been generating viral-ready video content — featuring the who’s-who of Bollywood and the South Indian entertainment industry — to enhance the positive sentiments associated with real diamonds. Its biggest achievement in the video arena thus far has been a tieup with the film behemoth Yash Raj Films in 2018 for promotional content on natural diamonds. (Need example)

The DPA plugged a glaring gap in diamond industry education by publishing the Blue Book. This is a thorough compilation of diamond-related terminology, used to train sales staff and keep them up to date so that they can serve their customers better. A confident, well-informed sales team does no harm to consumer confidence.

During the final quarter of 2018, the DPA has begun to connect with retail partners across the country. It means to set up a strong network that can act as a force-multiplier for its category-building efforts. For instance, the organisation is developing communication pieces that can be placed in-store with its retail partners, through the network. This content may be released from early 2019 onwards.

In short, the DPA is well on track to reach out to all its key stakeholders in India, bringing them useful content and tools. This looks like the right way to go. After all, it is the retailers who handle the crucial last mile, taking the message of diamond right to the consumers.

Tanishq builds an exchange of trust 

Exchanging old jewellery for new is an opportunity, not an impediment — particularly in a business climate where more frequent and indulgent consumer purchases are eagerly to be welcomed.

Tanishq is leading the way. The major retailer has picked up and renewed this old Indian tradition, by responding to a felt need among consumers and demonstrating that it reposes trust in the inherent value of jewellery. It is doing the industry a favour by investing its own brand capital to encourage consumers to buy more.

With increasing digital access, “Awareness has increased ten-fold [in recent] years, and the jewellery buyer today is driven by a wish to experiment with modern designs and quality,” says Deepika Sabharwal Tewari, associate vice president, marketing, Jewellery Division, Titan Company. “We realised, however, that customers can’t keep buying new gold jewellery without exchanging their old jewellery.”

Accordingly, in summer this year Tanishq ran a high-profile, 15-day-long mega-campaign, in 11 metro and Tier-1 cities, to publicise its generous new-for-old exchange offer. The focus was on old gold jewellery of purity greater than 14k, with a promise of no loss of karatage. It was a good deal, and consumers responded well.

Buoyed, the retailer moved quickly on to Tanishq Promise, the next stage of its exchange campaign. Its advertisement film shows a doubtful-looking mother handing over pieces of old jewellery (evidently purchased from the family jeweller) at a Tanishq showroom for evaluation, with her daughter reassuring her through the process. In the end, the salesperson quotes an exchange price that is clearly higher than the elderly lady expected and the price it as originally bought for.

The video certainly “breaks the myth that jewellery exchange is only possible through a family jeweller”, as Tiwari says. That’s not all it does. It also shows a generation gap being bridged, gently and without hard-sell. It brings in the aspect of relationships of trust. It is an admirable achievement.

What’s more, Tanishq shows its awareness of what it takes to win consumers over. One of the retailer’s sharpest moves this year was making it possible to melt down old gold jewellery right in front of the customer, to present an exchange price that cannot reasonably be doubted.

“If 90 per cent of the industry is unorganised, as Tanishq believes, this means that many jewellers lack state-of-the-art gold quality analysis devices, and customers often end up buying impure jewellery,” says Tiwari. “We felt the exchange opportunity was the perfect way to assure customers that they were not losing out on anything.”

The Exchange at Tanishq ad video has 80,000-plus views on YouTube alone. Looking ahead, exchange transactions could become a terrific, industry-wide tool for boosting business.

De Beers legitimizes retailing of  Grown diamonds

Until not so very long ago, De Beers meant diamonds and diamonds meant De Beers. So when this torchbearer for the diamond industry announced the launch of Lightbox, its collection of lab-grown diamonds, jewellers around the world sat up in surprise.

The move earned more reactions than can be described in this article. According to one popular hypothesis, De Beers’ real plan is to crowd out all other synthetics players and capture the market by quoting staggeringly low rates for its own synthetics. Other observers choose to see the move as De Beers bowing to the inevitable and confirming that the time of synthetics has come.

Some retailers are pivoting with alacrity. Vardhman Jewellers of Delhi, a family jeweller with a proud legacy of many years, is for the first time launching synthetics alongside natural diamonds. “It’s time consumers knew their options,” says Namo Jain, Managing Director who plans gradually to introduce a range of lab-grown diamonds in the 15 small-format stores his company will soon launch in malls in Delhi.

He has no qualms. Customers deserve a choice, he says, and De Beers simply is paving the way for jewellers to foray into the category with honest pride. It is time to set aside the stigma associated with synthetics, especially among retailers of natural diamond jewellery, who are conditioned to view the sale of synthetics almost as an act of betrayal.

The Modi–Choksi fraud is hobbling the industry

The Nirav Modi–Mehul Choksi bank frauds, news of which broke in February this year, caught the gems and jewellery industry totally unawares. The double scandal delivered a double blow, to the industry and to banks.

The first blow was reputational, and it hit the government as well as jewellers and banks. Both the disgraced jewellers had already left India, and they have stayed out of reach ever since. Their fraud was on such a scale that it has not been possible for any agency to soften its impact significantly.

The second blow was financial. To save face, the banking sector — already on the back foot because of its growing burden of bad loans — imposed a hurtful collateral requirement of 100–150 per cent on lending to jewellers. This new rule has made it almost impossible for smaller players in the gems and jewellery sector even to think of surviving the competition.

One industry veteran called the move “unintelligible” and counterproductive, because it drives even honest businesspeople to corruption, to keep their enterprise afloat.

At a recent seminar, a senior government official admitted that gems and jewellery is the only sector currently facing a liquidity crisis, presumably because its bankers feel they cannot accurately assess risk.

Banks continue to hold back lending to the sector, hurting exports and the domestic business. A number of diamond manufacturing companies have already gone under, but there is little likelihood of a reversal in the risk perception.

Finally, on the retail front, diamond sales have nose-dived, hitting their lowest ebb this calendar year. In conversation with the <i>Retail Jeweller</i>, jewellers claim a minimum 20 per cent drop in diamond jewellery sales.

There is no way yet to assess whether this is because of the short-term paranoia among consumers in the aftermath of the scam revelations — which sent them scurrying to their jewellers to demand re-examination of high-ticket items — or whether it reflects a larger disenchantment with diamond, partly due to frequent coverage of the threat of undeclared grown-diamonds.   .

Anecdotally, it sounds as if buyers are hesitant to invest in diamonds because they feel less “real”.

Courtesy: The Retail Jeweller India News Service