Reliance Jewels on track to achieve the greatest market penetration of any jewellery brand in India

Soma Bhatta (SB): How does the Reliance Group see the jewellery business since Covid-19?

Sunil Nayak (SN): Before March 2020, Reliance Retail had already chalked out ambitious plans for Reliance Jewels. The last fiscal year became a testing ground for our new projects. We have brought forward our aggressive expansion plan. Business was down during the first two quarters of 2020, but the performance in the last two quarters was pleasantly surprising. The situation repeated in May–June 2021, but the resurgence from July onwards has restored belief in the jewellery segment, among corporate brands like ours.

SB: Given the pandemic uncertainty, reputed brands are setting their business goals month by month. How are you setting your business goals?

SN: At Reliance Retail, we always have been agile in adapting our short-term and mid-term plans so that we stay on track for our long-term goals. Covid-19 irregularities have helped us infer that the jewellery business must include building customer confidence by strengthening the brand’s relationship with the end-consumer. Our philosophy stresses on being in the moment, for which we create purchase opportunities every week, month and quarter, successfully. Our customers have stayed loyal to the brand during the pandemic — because of our services, they don’t explore opportunities elsewhere.

SB: Many brands have pushed back their expansion plans till after the pandemic. Is Reliance recalibrating its growth plan?

SN: We want to be the jewellery brand with the greatest penetration of the Indian market. Having said that, during the last fiscal we put the safety of our employees before business expansion.

Since the start of this financial year we have scouted for properties, and we are now in a position to finalize 30 stores. We are expanding through four touchpoints, namely, standalone showrooms; shop-in-shop [SIS] platforms in Reliance’s multi-brand fashion retail entity, Trends; the B2B business for corporate sales; and ecommerce through  AJIO, RelianceJewels.com and JioMart.

We have 250+ stores spread across 120+ cities. Within our mid-term timeline of three to five years we should have the desired penetration, and our touchpoints will be of a much greater range and density than our competitors’. We expect double-digit growth across all channels, by the end of this financial year.

SB: What are the innovation strategies that will support this high-growth plan?

SN: Reliance Jewels shares the overarching culture of the organisation. We are creating the strongest value proposition for customers in the precious jewellery category. The first step in that direction is building the necessary infrastructure. We have established design innovation centres across all regions in India. Earlier, we depended more on vendor offerings and co-creation. Now, we will create exclusive designs along with our partners.

The design studios and satellite centres that we are setting up will generate granular data on each market. We are identifying gaps in the market already, in terms of design and price point, across all categories and materials. This is the biggest-ever research drive within the organisation. Based on the market data, we will apply fine art and technology to improving our products, and give end-consumers the best value for their money.

SB: Is Reliance competing for the lowest price offering?

SN: No, definitely not. Our focus is on achieving the right balance of price, product and quality, so that the consumers’ value perception of our products is the highest. Our research aims to find the sweet spots and then build around them. We are cultivating a strong culture of design innovation driven by the core idea of creating value for the customer.

SB: What are the other benefits of owning designs in the retail business, where trading still seems to be the popular practice?

SN: For a retail brand to build trust in terms of its design wherewithal, a brand needs to own its designs. Although Reliance is well known across other categories, we are a relatively new business and still building our competency. Reliance Jewels will need to earn consumer confidence in its own right. By building our own inventory, we also ensure that our inventory investments are optimised. We are looking at a 2.5 times increase in stock turn across categories. This will happen with a boost in brand visibility and competence, as customers naturally will compare a nationally strong corporate brand like ours with the offerings of regionally strong players.

SB: How will hallmark unique identification (HUID) and hallmarking impact organised players? Are you facing challenges in this regard?

SN: Reliance has always promoted hallmarked products. With the law being made mandatory, the entire industry will earn more credibility among the end-customers. One of our teething issues is the more than doubled delay in product distribution now, as compared to before the new law was enacted, of hallmarked good supply. We have taken countermeasures, such as placing orders in advance and reducing manufacturing time, but some discrepancies are bound to occur in the upcoming season.

SB: What are your key learnings from the pandemic situation as a business leader?

SN: The first lesson has been to refrain from rushing to conclusions about the jewellery business. Everyone, including me, thought that jewellery would be affected acutely but that didn’t happen — fortunately.

Second lesson, a better connection with our staff ensures better store operation. Our staff has exceeded expectations in delighting our customers despite the odds. This insight reaffirmed my faith in the old saying about managing a retail business: take care of your staff and they will take care of your customers.

Third, widespread consumer interest in a relatively new jewellery brand like ours (and we are still in the establishment phase) is very pleasing to us. Our conversion ratios and ticket sizes have gone up, which shows that we are earning and keeping customer loyalty.

SB: Reliance Jewels is adding silver jewellery to its portfolio, alongside gold and diamond. What is the nature of the current inventory basket?

SN: We are introducing silver jewellery as an entry-level product in certain potential markets. Other than in our exclusive business outlets, silver jewellery will also play a major role across the SIS outlets. Gold will remain the strongest driver, while diamond continues to appeal to millennials as an aspirational category.

Courtesy: Retail Jeweller India News