Challenges and Opportunities of Selling beyond known boundaries:-
The jewellery industry, generally considered slow-paced, is in the midst of a handful of rapid transformations. In some of them the pace of change is propelled by technology and its eager adoption by consumers. Ecommerce has transformed the way retailers approach business. Offline brands are investing in online retail, and online retailers are opening bricks-and-mortar “experience centres” and physical showrooms. The session was titled “Internet shoppers: Challenges and opportunities of selling beyond known boundaries”.
“Indians have actually jumped an entire generation, from the personal computer straight to the mobile phone,” said Vijay Jain, CEO, Orra, who moderated this session of the Retail Jeweller India Forum 2017. “This influences not only how they consume information but also how they buy.”
Quite aptly, in his remarks Jain observed that some traditional family jewellers, when they went online, did not simply leverage their brand equity in a new space. Instead he identified Zaamor and Stylori as two powerhouse online jewellery brands that were created by the well-established family enterprises Vummidi Bangaru Jewellers (VBJ) and NAC Jewellers, respectively.
Mariappan Muthiah, vice president– business operations, Zaamor, explained why the parent company VBJ launched the new brand: “Going forward, we may want to raise funds, which may require diluting ownership. Second, the major market for ecommerce is in the west and north of the country and VBJ is better known among South Indian customers. Launching a new brand seemed reasonable, as long as the VBJ lineage was woven into the new brand story, to build trust.”
Anand Ramanujam, CEO, Stylori, echoed the same opinion: “Besides keeping open the option of funding, we wanted to tell a different story which would have conflicted with that of NAC, a 50-year-old brand. Even the quality of jewellery, target audience and product designs are unique to the new brand.”
Mayank Shivam, category leader, Amazon Fashion, India, shared the perspective of a marketplace operator displaying a number of online and offline jewellery brands. “A known brand typically has higher conversion even if it is regional. Having said that, online customers are very different and it’s important to customise the product mix and get the product story right. It is far more important than brand familiarity, but — everything else being equal — there still is an advantage for established brands.”
He had statistics. “Eighty per cent of the audience is 18–35 years of age, and more than 50 per cent of jewellery sales are to towns with a population of less than 100,000.”
Jain asked the panel of experts what back-end infrastructure a jewellery retailer must invest in, to operate an ecommerce platform. Minesh Shah, MD, Effission Software, explained in his presentation that “There are various layers. It really depends on what a retailer wants to build. One can settle for a basic site or one that is cloud-computed, with a monthly subscription. Retailers will have to invest also in analytics to know their customers better, and in customer service, to elevate the buying and post-order experience.”
“For our VBJ site we have basic cataloguing,” said Mariappan, “but Zaamor is a fully fledged ecommerce site with wider requirements.” Technology aspects of online retail are, he said, “akin to visual merchandising in stores: a higher level of technology-enabled merchandising is required for ecommerce.” Zaamor diamonds has, for example, “IP technology that shows customers different products according to where they are located.”
Ramanujam emphasised that the investment is linked to the vision. “It took us four months to build Stylori.com because we wanted the customer experience to be very different to that of all the other sites in the same space. We wanted to build something that stayed in the consumer’s mind and wasn’t quickly forgotten — not just another me-too jewellery portal.”
Building the best possible core team for online operations is crucial, said Aditya Pethe, director, Waman Hari Pethe Jewellers. “We made the mistake of starting out with 25 people, but now we keep a core team of four or five. The team need not be big because jobs like digital marketing, software and logistics can be outsourced.”
Pethe clarified that outsourcing does not mean less investment. “As jewellers, we lack the IT skill sets. It becomes important to hire the right talent and align it to one objective. Some of the talent is unaffordable, and it works better to have such people on board as consultants.”
Just being online and active is not enough. “It is very easy to get ‘likes’ on social media,” said Pethe. “It is the conversion to sale that is important.” In other words, a sound marketing strategy is essential.
“One has to spend on acquiring customers,” said Ramanujam. “That is the oil for the ecommerce engine.” According to Mariappan, traffic can be built quite easily “but conversion is based on the experience of the website. So if the retailer does not invest in enhancing the experience of the site, the cost of acquisition increases.”
“For a marketplace like Amazon.in it’s relatively easy to drive customers,” said Shivam. “It has a lot of categories and is heavily invested in marketing.” Many of Amazon’s decisions are based on technology-driven intelligence, he explained, an advantage not available to individual retailers, who will find it much more difficult to understand customer behaviour and acquire customers. “Our data analysis allows us to know exactly what each customer is searching for. The scale is indeed a challenge, as online customers may be anywhere in the country.”
Post-order service for ecommerce, Shivam said, is not easy to master. “In the offline space a customer will come back to the store and you’ll make sure the problem is resolved. But in an environment where you do not know the customer, maintaining a 100 per cent clean customer experience is the key.”
This matters more, he said, because “Jewellery is one category where we see a lot of repeat purchase, which is based on the shopping and brand experience. Retail customers with one single bad experience will never return, particularly because these are high-value items.”
Being online is empowering consumers, he said. “A lady buying jewellery worth R 10,000 gets over 500 options to choose from, on one site. At a single store she may not get more than two trays of designs.”
For their part, he said, jewellers should have realistic expectations from the online channel. “A lot of retailers seem disappointed that the average price is not moving up. But online customers today are looking for lower base prices, of R 15,000–20,000. We will see it gradually go up over the coming years.”