Dhanteras shines a bright spotlight on the future of jewellery sales

retail
By retail November 17, 2020 14:41 Updated

Dhanteras shines a bright spotlight on the future of jewellery sales

With the dark year that has engulfed all of us in its bewildering smoke, what most of us were waiting for is the festive season for a bit of cheer. Dhanteras came with open arms, and most jewelers took advantage of it both online and offline and sales took a hike up the graph. The Retail Jeweller speaks to jewellers across India to gauge their analysis of the Dhanteras sales. Soma Bhatta

A booming gong to business woes

What came as a boon? Dhanteras this year was spread over two days. “It helped us manage customers more efficiently. The response was beyond our expectation. We saw a rush on both days of Dhanteras,” said Hitesh Adesara, Keshavji Chhaganlal Jewellers, Jamshedpur.

Despite the festivity, it did look like the pandemic still rested firm at the back of customers’ minds. “The customer flow was one-third when compared to the last year, but the conversion rate was 100%. Only serious buyers came to the shop,” said Ishu Datwani, founder, Anmol Jewellers, Mumbai.

“The overall sale this Dhanteras is better than last year. We are seeing a lot of pent-up demand in the market after a lacuna of nearly eight months that compelled customers to shun non-essential purchases,” said Abhishek Kajaria, owner of Avama jewellers, Kolkata.

In what could be a direct result of the latent hunger to buy, most jewellers TRJ spoke to, reported a volume growth in the range of 5-10%. “Our overall sales were more than 5% higher as compared to last year as far as volume is concerned,” said Adesara.

“The footfall increased by 6-7%, and so did the sale of jewellery weight-wise,” said Vaibhav Saraf, Director, Aisshpra Gems and Jewels, Gorakhpur. “For us, the sales were 8% higher than last year,” said Pratap Kamath, MD, Abaran Jewellers, Bengaluru.

The season spread cheer all around, thanks to the rise in gold price during the peak of the pandemic and the confidence it reposed on consumers. As a result, for those who did business at the same level as last year, or stayed slightly on the low, numbers did not go on the wrong side of the graph.

 

Vardhman Jewellers from Haryana achieved the same volume in sales as last year, “The sales figures though, were 30% higher because of the high gold prices,” said Sachin Jain, the owner. Saurabh Gadgil, MD and CEO of PNG Jewellers in Pune, admitted to 15% lower volume sales as compared to last year. But gold prices augured well for him, as the total sales value is 10-15% higher than last year.

A jewellery torpedo; bullion stays low

Contrary to expectations, most jewellers sold less or almost the same volume of bullion when compared to last year.  Kamath sold less than 2% bullion, which he said, was “the same as last year.”

Saraf decidedly avoided sale of spot gold coins to avoid a rush during Dhanteras.  ‘We purposely came up with a campaign urging customers to pre-book gold coins two weeks in advance that they could pick up on the auspicious days and as a result the overall bullions sales dropped by 25% as we only delivered pre-booked coins.’

Interestingly, Saraf is not perturbed by the loss of sale. The campaign aimed at two fold benefit, he says, “It helped us divert out focus and attention to customers who came in to purchase jewellery. At the same time, consumers appreciated the pre-emptive measures taken by us in order to make the store a safe place to shop,” said Saraf.

Adesara, who also sold 5% less in bullion (in volume) observed a unique trend. He said customers bought gold coins in multiple denominations of high weight, such as 10-gram, 20-gram and 50-gram gold coins, which is not common. “I think the reason is the gold-rate fluctuation. Customers shopping for weddings scheduled six months later are buying gold coins to negate the probable price increase effect in the future,” he said.

On the other hand, Aisshpra Gems and Jewels sold more lower-denomination gold coins. “We had most customers who normally buy 10-gram coins, choose 8-gram ones. That is a direct result of the price hike,” said Saraf.

Jain believes reason bullion sold less is because, “Most people these days are buying jewellery with an investment mindset,” says Sachin. He too sold less gold coins than last year. Expressing surprise at this trend, Gadgil says, “The contribution of jewellery to sales was unexpectedly higher, around 70%, and 30% was bullion. The share normally is 60% in jewellery and 40% in bullion. But, the wedding season may have been a contributing factor.”

Datwani, who sold approx 5% bullion this year, said, “Although we have not done a definitive analysis, it seems more people bought jewellery this year.”

For those who witnessed growth in bullion sales (as compared to last year), “Growth in jewellery sales far exceeded growth in bullion sales,” said Amit Bandi of Ratlam’s DP Jewellers, who saw a 10% volume increase in bullion sales as against 25% volume increase in jewellery.

Clearly, the consumers are seeing greater value in owning the priced metal in both forms and leaning more towards buying jewellery to avail both the utility and investment value at the same time. It an encouraging trend that the industry needs to be aware of and bolster.

 

Wedding bells ring in profits

If there is one thing that went as per expectation, it was the spurt in the sale of wedding jewellery. Most jewellers saw about 60-90% sales in the category. Binaisha Zaveri, Director, TBZ- The original, says, “It is a pattern we are seeing strengthen. The wedding sales are happening more during the festive season and this year is no different.”

Suhail Kedia, director of Maliram Jewellers, Amritsar, reported 70% sales in the bridal category. “As people are spending less on other avenues in a wedding now, the demand for necklaces was high, be it ones between 60-70 grams or heavier ones of 400 grams,” he said.

“More than 60% of our sales were in the bridal category. People are buying heavy jewellery such as gold kamarpattas, which weigh around 300 grams, and temple jewellery between 80-100 grams,” said Kamath.

“Almost 60-70% of our clients were bridal shoppers. They bought jewellery between 70-100 grams,” said Adesara.

While most hailed wedding shoppers, some jewellers reported more sales in the non-bridal sector. “Due to the heavy rush that is generally seen at this time, people shopping for wedding jewellery don’t visit the store during Dhanteras and Diwali. 90% of our purchases happened in non-bridal categories such as rings, chains and bangles,” said Jain.

For those who did not get a rush of wedding customers the high-volume wedding sales benefitted in filling the gap. “Only one-third of our jewellery sales were bridal. Weight-wise though, we sold more in the bridal category — around two-third of the overall weight sold is on account of bridal purchase. Bangles and necklaces between 60-100 grams were in high demand,” said Gadgil.

For Saraf too, around 40% of the weight volume in sales came from bridal jewellery. DP Jewellers had a piece of the wedding pie as well, with this category contributing close to 40% in their overall Dhanteras sales. “Most customers went for high-value and trendy jewellery, such as antique designs with pastel meenakari work, and fusion jewellery,” said Bandi.

It is understandable that customers plan wedding purchases in advance and push the purchase to tie in with auspicious days. However, this year seems to have been exceptional given the deferment of weddings due to the pandemic. And, combined with the weddings already scheduled for the season it has set off the industry to a great start for the season ahead.

Diamonds sparkled too!

It did look like this was the year best suited for a transition. The traditional Indian mind that normally went for gold, now started looking at diamonds as an option in jewellery purchases. Due to increased gold prices, many jewellers saw a greater traction in low-value diamond jewellery in the bridal and non-bridal categories.

“During Dhanteras, many people make token purchases in low weight. Due to high gold prices, a segment of consumers that would buy small-ticket gold jewellery items between Rs 15000-25,000, has shifted towards diamond jewellery like rings, earrings and mangalsutras. We have also seen substantial bridal purchases in diamonds. This year, we saw a 25% growth in diamond sales during the auspicious occasion,” said Saraf.

Echoing a similar opinion, Jain said, “In the past two years, for every 100 customers we had, 25 bought diamond jewellery. This is a big thing for us.” “Almost 5% customers who were gold enthusiasts, have shifted to diamond jewellery due to the price volatility of gold,” said Adesara. Bandi also witnessed more than 25% growth in diamond jewellery sales.

Keeping this ongoing shift in mind Kedia made a deliberate effort to increase inventory of small diamond jewellery during the festive period. “Many customers at the entry-level (10-15 grams) are showing a greater inclination towards diamond jewellery,” says Kedia.

Although the trend is clearly more pronounced in smaller towns and cities as diamonds remain more of an aspirational choice there, it is being witnessed by brands in metros as well.  Zaveri says, “The current price of gold makes transition to light weight diamond collections easier and we have seen this trend. However the emotional bond between Gold and Indian consumers is very strong and bulk of sales is still skewed towards gold jewellery.” Echoing a similar opinion, Gadgil says, “I don’t think gold prices have benefited diamonds, because customers who wanted to buy gold have gone for it,” he said.

But aware of the new possibilities of making the fence sitters switch categories more easily, many retailers are aggressively pushing diamonds by introducing new ranges and promotional campaigns. They are yielding the benefits too.

Powered by the New Normal

An aftermath of the pandemic, many jewellers reaped the benefit of phygital sales. The evolved behavior of consumer and a new path-to-purchase enabled by e-com and online discovery pushed sales through new channels.

“We had a good number of new customers, both millennials and seniors, on the online platform. Many saw our designs on social media platforms and visited us, said Datwani. ‘25% of our sales came from pre-bookings and the rest happened during the two Dhanteras days.’

Aggressive online marketing by brands allowed consumers to pre-book orders at retail outlets. Gadgil claims, “As a result 40% of our Forevermark solitaire bangles and necklaces sales were pre-booked.”

He also witnessed many customers take the multi-channel route to make the final purchase. “Omnichannel retailing enabled many of our customers to see our products online and then come over to pick them up.”  On the online platform, Gadgil primarily sold coins and jewellery below Rs 50,000.

Zaveri confirms it’s a trend that is becoming stronger. “Since the start of the pandemic we have seen high interest from customers in video assisted buying and this has continued during the festive season, the trend is that the first engagement with the brand is via video and then if the purchase is big ticket the customers come to the store to close the sale,” Zaveri says.

Jewellers also went all out to aid consumers to buy from the convenience of their homes. Some like Bandi, managed close to 15-17 deals over video calls. ‘Most of them were wedding shoppers,” he says.

All in all, Dhanteras sale is building hope of a bright season despite the limitations that Covid has forced on us. It is spreading the positivity and sheen that comes in from the once-in-a-year festive season and promises to lift up the flattened revenues and reduced sales of covid-stricken businesses.  (with inputs from Manoj Chakraborty)

retail
By retail November 17, 2020 14:41 Updated
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