Since the beginning of March 2020, the world has been hit by a strong virus that has not just affected human health but has interrupted the economic growth of several countries badly. The pandemic has caused a world-at-large shift across several sectors, and the gems and jewellery industry is no different. Recent datashows how gems and jewellery have been one of the hardest-hit retail industries during the pandemic. According to several jewellery experts, the industry has overall seen just a 20-30 per cent business due to fewer footfalls amid fear of the virus’s spread.
According to Indian government reports, gold rates have fallen significantly and the world’s second-biggest gold consumer has tumbled down as it is witnessing the slowest pace of growth in the last 11 years.
However, some selected retails within these vertices are seeing remarkable growth and expansion in recent months. A positive spin is visible for many direct-to-consumer jewellery brands. The contributors to this global growth of the market include a growing number of online buyers, and an increasing female population as well as an increasing middle-class population. That said, there are also challenges like declining rough-diamond mine supplies, delay in auspicious ceremonies like engagements and marriages as well as the closing of retail stores in smaller cities.
Despite the unavoidable upheaval at the pandemic’s onset, many jewellery businesses are successfully riding the new-normal wave, innovating and inspiring along the way. With remodelling and structuring their sales drive to design unique virtual shopping experiences, these jewellery retailers are finding better shopping ways to satisfy their customers.
From just-launched labels to established brands, they have been reinventing the whole shopping process, making it a comfortable experience for customers. How are they doing it?
Let’s understand how these brands are understanding the drives and behaviours from different demographics and forming their effective growth strategies.
Despite the fragility of the industry, purchasing of jewellery has gone up for businesses opting for Direct-To-Consumer (DTC) model. A fitting example would be the jewellery brand, Gorjana. Co-founded by Gorjana Reidel and Jason Griffin Reidel in 2004, Gorjana jewellery started as a wholesale-only business. With a shift to DTC three years ago, the brand has upscaled its market values with successful sales. In 2020, the brand experienced 300% growth year-to-date, with 400% monthly growth between April and May. At present, 80% of sales of this jewellery brand are direct-to-consumer, through in-stores, and online. The combination of physical retail and a digital presence has helped consumers get that omnichannel experience that is custom and personalised according to their needs.
The Fitbit Luxe™ Special Edition by Gorjana.
How different is Direct-to-Consumer from Traditional Retails?
The traditional retail business model is lengthier than the Direct-to-Consumer business model. Where traditional business models have intermediaries like retailers and wholesalers, the DTC supply chain is shorter with no intermediaries. Hence it reduces the time for the jewellery product to reach the customer. This also helps in strengthening the bond between the brand and the customer, boosting long-term customer relationships.
With the Direct-to-Consumer business model, brands can enhance control over the marketing of their products. Product offers and special discounts can be given even at an individual level, thus allowing these retailers to take the branding of their business to the next level.
Move to Digital Platform
If demonetisation was not enough for industries to adopt digitalisation, then the Covid-19 pandemic surely is! Digital adoption, changing customer’s preferences and emerging niche jewellery segments are redefining jewellery retailers across markets. This is the perfect time for traditional jewellery retailers to move smoothly to the digital platform, create a user-friendly site, establish a secure payment system and a personalised feedback loop for customers.
According to the Global Diamond Report 2020-21 by Bain & Co and the Antwerp World Diamond Centre, around 20 per cent of diamond jewellery retail sales last year occurred online. The report stated that several reputed diamond jewellery brands have seen up to 70 per cent year-on-year sales growth.
The pandemic accelerated the process of change in the fashion industry - from production to presentation and sales, thus pushing the digitalisation of the jewellery industry even more. The Jewellery Room , an international platform connecting consumers to the world’s finest jewellery brands, went completely digital in 2020. They moved their focus from B2B to a solely B2C approach with the website acting as a marketplace. This helped them create a larger trustworthy community online and help customers have access to their products from the comfort of their homes.
According to the Q4 2020 review by Platinum Guild International (PGI), jewellery like earrings and ear studs are extremely popular amid the Covid-19 pandemic due to consumers’ increasingly online lifestyle and mask-wearing habits.
While contactless payment solutions were here for a while, they grew their market aggressively since the past five years. With consumers gaining trust and confidence in e-wallets and online purchases, contactless payment solutions like Google Pay, Paytm, and others are likely to remain important in the future.
According to a study released by McKinsey in late March, consumer sentiment with digital platforms is supposed to remain strong in a post-pandemic scenario. The study found that most shoppers intended to sustain their new digital behaviours – increased online purchases and using online buying solutions.
Opportunities with AR/VR technology
With digitalisation comes opportunity, in bulk! Jewellery being a tactile industry, customers prefer to look and try them on, before making a purchase. With technology, the jewellery buying experience can be as thorough and multidimensional as possible. Here comes the aid of Augmented Reality (AR) technology and Virtual reality (VR) technology.
An augmented reality try-on solution can help brands increase sales by gaining their customers’ insight, collecting data on the behaviour of the customers, and consequently help in reducing the rates of return. Integrated technology services have so far proven to improve the overall customer experience for several established brands, CaratLane being one of them. In 2015, the brand pioneered the space of virtual jewellery try-on features by creating an app for customers with the ability to try jewellery designs “virtually”, aided with an innovative 3D mirror.
Also, StyleDotMe , a fashion tech startup with Augmented Reality has formed an AR platform, called MirrAR. It is the world’s first real-time AR software for jewellers, which retailers like Tanishq, Amrapali, PC Jeweller, and Kalyan Jewellers have integrated with.
Chrono24 , a German-based online watch marketplace allows customers to ‘try on’ their watches from the comforts of their home with the help of AR technology on their smartphones.
It’s time to go Social
Today, social media is one of the largest and fastest-growing platforms. It has become an integral cog for jewellery brands' online communication strategies, allowing them to reach a larger and varied audience at a minimal cost. Establishing a social-first campaign for brands has also proven to be one of the most effective strategies for increasing brand awareness as well as reintroducing their brand language.
Brands all over the world have come together to show courage and help each other during this pandemic. One such example is Missoma- a demi-fine jewellery brand based in the UK. The brand’s social media campaigns like ‘Missoma at Home’ and #MissomaLinkUp are helping people around the world cope with Covid-19 and stay strong. What helped the brand increase interaction on their social media platforms is their outlook for the right set of audiences. Targeted at women in their 20s and 30s, the brand implemented a robust influencer strategy, gifting pieces to carefully selected women who fit the brand’s aesthetic and values.
The brighter side of the pandemic is that the jewellery industry is likely to pick up pace soon and with that demand will grow manifold followed by sales. While several jewellery businesses are eagerly waiting for the curve to flatten, this can be a great time for businesses to understand their model, reinvent a sale strategy and go big in the market.
While the jewellery industry is staring at a major uphill this year, the need of the hour is consistency and sustainability along with a well-laid out plan.