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. Let us see the impact on the jewelry industry during Covid-19. The pandemic has caused a world-at-large shift across several sectors, and the gems and jewelry industry is no different. Recent data shows how gems and jewelry have been one of the hardest-hit retail industries during the pandemic. According to several jewelry experts, the industry has overall seen just a 20-30 percent 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.
During Covid
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 jewelry brands. The contributors to this global growth of the market include a growing number of online buyers, an increasing female population as well as an increasing middle-class population. That said, there are also challenges like declining rough-diamond mine supplies, delays in auspicious ceremonies like engagements and marriages, and the closing of retail stores in smaller cities.
Despite the unavoidable upheaval at the pandemic’s onset, many jewelry industry businesses are successfully riding the new-normal wave, innovating and inspiring. With remodeling and structuring their sales drive to design unique virtual shopping experiences, these jewelry industry 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. Let’s understand how these brands are understanding the drives and behaviors of different demographics and forming their effective growth strategies.
Direct-To-Consumer
Despite the fragility of the industry, purchasing of jewelry has gone up for businesses opting for Direct-To-Consumer (DTC) model. A fitting example would be the jewelry brand, Gorjana. Co-founded by Gorjana Reidel and Jason Griffin Reidel in 2004, Gorjana jewelry 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 jewelry 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 personalized according to their needs.
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 jewelry 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 during covid-19
If demonetization was not enough for industries to adopt digitalization, then the jewelry industry during the Covid-19 pandemic surely is! Digital adoption, changing customer preferences and emerging niche jewelry segments are redefining jewelry retailers across markets. This is the perfect time for traditional jewelry industry retailers to move smoothly to the digital platform, create a user-friendly site, and establish a secure payment system and a personalized feedback loop for customers.
According to the Global Diamond Report 2020-21 by Bain & Co and the Antwerp World Diamond Centre, around 20 percent of diamond jewelry retail sales last year occurred online. The report stated that several reputed diamond jewelry industry brands have seen up to 70 percent 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 digitalization of the jewelry industry even more. The Jewellery Room, an international platform connecting consumers to the world’s finest jewelry 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), the jewelry industry like earrings and ear studs are extremely popular amid the Covid-19 pandemic due to consumers’ increasingly online lifestyle and mask-wearing habits.
Contactless payment during covid-19
While contactless payment solutions were here for a while, they grew their market aggressively over 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 toward digital platforms is supposed to remain strong in a post-pandemic scenario. The study found that most shoppers intended to sustain their new digital behaviors – increased online purchases and using online buying solutions.
Opportunities with AR/VR technology
With digitalization comes opportunity, in bulk! Jewelry being a tactile industry, customers prefer to look and try them on, before making a purchase. With technology, the jewelry 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 behavior 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 jewelry try-on features by creating an app for customers with the ability to try jewelry designs “virtually”, aided by 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 jewelers, 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 homes 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 jewelry brands’ online communication strategies, allowing them to reach a larger and more 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 and 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 jewelry brand based in the UK. The brand’s social media campaigns like ‘Missoma at Home’ and #MissomaLinkUp are helping people in the jewelry industry 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 Future
The brighter side of the pandemic is that the jewelry industry is likely to pick up the pace soon and with that demand will grow manifold followed by sales. While several jewelry businesses are eagerly waiting for the curve to flatten, this can be a great time for businesses to understand their model, reinvent a sales strategy and go big in the market.
Summary
While the jewelry 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 during covid-19.
