The topic of the ninth session of the event was ‘Building a growth strategy for family-run independent jewellers’. Addressing the gathering, Devang Shah, Director – Management Consulting, KPMG India, the speaker for the session, made some very insightful observations about single-store neighbourhood jewellers.
Shah first talked about the difference in the growth rates of the organized sector as against the unorganized sector. He said that the share of the organized sector has increased considerably from 9% in 2007 to 22% in 2015, and further to 30% in 2018.
On the one hand, the market is growing at a slow pace, and on the other, the organized sector is expanding its presence. One can safely assume, therefore, that the unorganized sector, comprising single-store outlets or two-store outlets, has been badly hit. Shah further said if one counts the number of jewellers filing GST returns, one will find that the number is going down, which means that fewer and fewer jewellers are existing at the end of the long tail of the jewellery industry. Today, the big guns are doing well. For example, Titan and Kalyan have put up a stellar performance, whereas single stores and family-operated stores are struggling to grow their business.
Shah then proceeded to share three key solutions for independent family jewellers which will help them stay relevant and thrive in the competitive market. The first of these, he said, is creating a USP for the brand. For long-term survival, jewellers may even have to think of measures that might not be economically viable in the short-run. They have to remember that they are operating in a scenario in which big players with deep pockets are flooding the market with a large amount of stock, dazzling buyers with large, glitzy showrooms, and spending a fortune on advertising. Needless to say, small players need to create a specific reason for customers to come back to them. They have to be known for something that is unique to them, something that a retail chain cannot replicate. They have to identify a USP.
It could be anything, from design to prices to customer care. Shah pointed out, that these stores will have to think beyond the obvious and aim at something much more specific. Jewellery companies that have performed well are known for something specific.
The second solution, Shah said, is hyperlocal marketing. Hyperlocal marketing basically means high-intensity marketing within your catchment area, with the target being 1000 to 1500 families right in the neighbourhood. Giving details about the concept, Shah said that a number of tools are available today that allow you to do this quite easily. You just have to make sure that your hyperlocal marketing has great content.
Family jewellers can also build local partnerships with other brands from the same city so that they can use their customer base to expand their own reach. Shah advocated local partnerships because that is something that big brands would find difficult to replicate. Besides, personal involvement and special TG touch points can be highly beneficial for small stores.
Shah listed hyper-personalization as the third solution. Small jewellery stores can use the Customer Relationship Management (CRM) platform, which will help them to localize and personalize everything for their customers. In fact, right from the time the customer starts searching for options and figuring out which store to go to, the retailer can use the CRM technology to influence the customer, map his/her journey, and offer personalized pricing.
It might sound daunting, but hyper-personalization is quite possible in this age of technology. In fact, it might be a necessity. The benefits are immense. Not only do retailers get to know their clientele intimately, but they can also beat the large players who rely on processes and rigid methods.
Shah concluded the session by giving a few tips to family jewellers for improving their performance. He advised them to look at talent as a differentiator, rather than as a cost head. He also said that small retailers can match the benefits given by bigger companies, or even better them, as they have lower overheads. He advised them to go for group insurance of their staff as it impacts the attrition rate.