The year 2020 has been the year of crisis, the year of complete shutdowns and economic slowdown and this impacted the overall retail industry in more than one way. While retail consultancy firms were betting on 2021 to be the year of revival, the second Covid wave led to partial lockdowns, closure of malls, and curbs on late evening movement that kept consumers home.
The second wave that started mid-February 2021 largely impacted the gems and jewelry sector and automotive dealerships which had so far benefitted from the release of pent-up demand, with wary customers and negligible sales. CRISIL Ratings Ltd. too maintained that the sharp rise in Covid-19 cases and the impact of any stringent containment measures on businesses are the key threats to the nascent demand recovery and gems and jewelry is one sensitive sector currently.
The second wave is proving to be much worse than last year with a huge loss of life across the country causing an overall negative consumer sentiment.
“It would be incorrect to say that jewellery purchase by customers has remained unaffected by the ongoing pandemic. However, people will emerge from this crisis with new ways of doing things. The second wave-driven lockdown did have an immediate and hard-hitting impact, but consumer purchases have climbed uphill digitally. Customers are seeking personalized, sensitive, and utility-driven communication touchpoints in the absence of showrooms or lesser walk-in opportunities. This has brought a shift in budget allocation with digital as a dominating medium. As a brand, we have made sure, right from one on one virtual communications to brand messaging with socially relevant themes, our top priority is to engage and maintain our relationship with every customer,” asserts Sunil Nayak, CEO, Reliance Jewels.
Losing the Sheen? Or Not?
The pandemic induced by Covid-19 has wreaked havoc on varied segments and industries. There have been a lot of cancellations and postponement of meetings, exhibits, weddings, parties in the coming months and this has hit the jewelry business hard, like many other segments. Few brands in the segment reported that they were only starting to revive the business after the restrictions were eased after the first wave, even as the others reported lower footfall during the same time. Jewelry brands also went through a tamed and muted Akshaya Tritiya for the second year in a row. Apparently, almost 30-40 tonne gold is sold on Akshaya Tritiya usually which has reduced to not even 1 tonne.
Pawan Gupta, Founder, and Director, PP Jewellers, maintains, “The pandemic has affected India’s economy to a great extent, especially with the ongoing second wave. A noteworthy number of jewellery brands had expected 2021 to be an entryway to plenty of business opportunities following a disheartening 2020, with hopes of the sales chart moving in an upward direction. The reason for this expectation was simple - revenge shopping suppressed desires to uplift mood, gifting, postponed weddings, and the likes. While there was some hope and growth experienced during and post the festive season of 2020, the second wave of Coronavirus has had a major impact that flipped around the recently re-achieved stability in functioning. This situation brought us all back to square one. Covid-19 disturbance has caused jewelry retailers in India to rethink their current plan of action.”
Businesses, however, are still hopeful of making up for the lost sales, once the situation gets better and weddings start taking place. Owing to the small scale, intimate weddings and events, there will be cost-cutting on various elements like guest lists, the destination, etc., and consumers will allocate a bigger buying budget to jewelry, which will ultimately help growth. People look at gold as a valid form of investment as compared to other options and recent times have witnessed millennials opting for gold too as a viable investment option.
“The current situation is still quite bad but it is safe to say now that the worst is behind us. Things are only going to get better day by day and numbers are also suggesting the same. We have been receiving a lot of inquiries for daily wear jewellery and solitaires. And I see that demand increasing in the near future because there are not going to be many large gatherings and people have savings which can be invested well in the form of solitaires. While there was a major financial hit on people’s income and most consumers are not in a positive state of mind to be buying jewelry, but the sentiment is becoming more positive moving forward and hence an increase in demand,” avers Rohan Sharma, Director, RK Jewellers.
The Survival Strategies
The pandemic has led brands – both online as well as offline – to transition into the virtual world in order to keep in touch with their customer base and to continue the business efficiently. The months to come will make the overall industry more inclined towards the use of all kinds of technology. While the current slowdown will pass too, jewellers will have to wait for the buyers to settle down for a bit before returning to their normal routine. Currently, with the uncertainty prevailing, consumer demand is likely to decline as they are hesitant to make larger investments. Until then, jewelry retail brands need to keep strategizing to bring the consumers back and revive the sales.
Gaurav Singh Kushwaha, CEO, BlueStone, says, “At BlueStone, which has been one of the leading omnichannel platforms for jewelry since 2011, we became even more aggressive towards making the best use of our digital media platforms. Social engagement and sales were expected to go down due to the pandemic and lowered consumer sentiments to shop jewelry. But on the back of our successful digital strategy execution, we saw a 2.5X surge in social engagement and 2X growth in sales this Akshaya Tritiya. We also continued to work on the expansion of our store footprint from 40 to 100 by the year-end. Digital is no longer a straight line, but a key element in an omnichannel experience. The recent times of COVID-19 have certainly proved the same and the importance of a strong online presence, both in terms of digital marketing and e-commerce shopping, for all businesses across the world. Since people turned strongly towards social networks in order to stay connected with each other and keep themselves occupied at the same time, it was our strategy to keep innovating and expanding our customer shopping experience digitally with 'Try At Home' and 'Virtual Catalogues' during this period.”
Even as for a category like jewellery, nothing can compare to physical communication, it is important to keep innovating like showcasing store inventory online, providing home delivery and store pick up, and making sure shoppers know what size, styles, and quality to buy irrespective of the medium of delivery.
Sunil Nayak agrees, “At Reliance Jewels we think, digital marketing for jewellery brands is no longer an option – it is a necessity, and messaging of such campaigns should be more customer engaging and interactive. As a marketing strategy, we are embracing various digital media as the preferred medium for promotional activities as it gives us a chance to interact with the customers. We will also be releasing a brand new exclusive collection that embraces the current trends and is a perfect adornment for the women of today during our Reliance Jewels’ anniversary campaign in August. Meanwhile, we are also collaborating with social media, lifestyle affinity portals, influencers, bloggers, and lifestyle magazine websites that are vocal and are co-creating engaging content in the online space. This helps in generating maximum eyeballs for the brand as they can attract more and more customers through such digital engagements.”
The impending festival and wedding seasons will also contribute to the restoration process. Indian gems and jewelry market blossoms with weddings and with postponed weddings earlier this year, the upcoming wedding season starting November will help the industry rebound with consumers expected to allot more budget to jewelry. In order to tap demand, jewelry brands need to keep innovating and stay updated.
Currently, with people still skeptical about stepping out and having large gatherings, there has been a lot of demand for lightweight, functional jewellery, and for pieces like drop earrings, pendant lariettes, etc. that are ideal for workwear and small get together.
“With the trend as observed last season, of more personal and intimate weddings due to pandemic, consumers now have a more minimal yet trendy and elegant approach to their style. Sleek yet varied styles of chains in necklaces and bracelets, colorful enamel jewelry in rings and earrings, and other everyday wear designs are working well and shall keep in trend over some time. Keeping the same in mind, this year BlueStone plans on focusing more on personalization and customization of jewelry styles. With an introduction of fresh designs of solitaire rings and couple bands, we shall also be launching over 100 new styles in platinum for the celebrations. Apart from a huge variety of rings, we shall be coming with a fresh and more quirky styling of Mangalsutra designs for the modern, minimalistic yet contemporary bride,” Gaurav Singh Kushwaha tells.
For RK Jewellers, design curation clubbed with strategic partnerships with like-minded brands will help the brand bounce back.
The Road Ahead
While the jewellery market is still reeling under the impact of the second wave with expectations of a revival in the next quarter with gold being the preferred choice of asset handed over at a wedding or even festivals, till then, it is important to lower expenses, conserve cash and maximize business and create awareness in the current situation.
While the partial lockdown this year hindered sales, it gave jewelers time to strategize for the future and focus on how to make this step exciting and unique for buyers. As consumers return to stores, they will seek safe places, will spend lesser time and show more interest in buying from omnichannel brands and it has thus become imperative for brands to have an omnichannel presence.
Sunil Nayak maintains, “While the gems and jewelry industry has been affected due to the pandemic, but we have seen growth recovery in terms of jewelry sales both via showrooms, e-commerce, and various other services that we initiated in the last few months. Along with this, the extended use of digital platforms has enabled active and continuous engagement. Currently, 70 percent of our showrooms are open for customers and we are expecting the rest of the cities to be operational by the end of this month. Since we will be entering the wedding season and the festive season soon, we are expecting a rise in purchases in the months coming up.”
The growth potential of the segment is huge and it is sure to revive and restore with adequate government support, which has undertaken various measures recently to promote investment and upgrade technology and skills in the category.
According to IBEF, exports of gems and jewelry stood at US$ 25.30 billion in FY21 as opposed to US$ 3.42 billion the previous year.