Distribution is the key
Distribution is the key

Jewellery business has never been ‘thanda’ in India. Though the industry has been predominantly captured by one store unorganised retailers, the retail chain owners are now emerging to create a loyal customer base across India including Gitanjali, TBZ and others. The recent one to expand its operations is Tara Jewellers. The retailer, which recently opened and IPO, now as a part of its strategy opens stores across India.

In conversation with Vikram Raizad Executive Director & CEO (Retail) Tara Jewellers Ltd, Sweta Pal finds out why retail expansion is of utmost importance.

Sweta Pal (SP): Do you think retail expansion is crucial? How have you planned the same for Tara Jewels?

Vikram Raizad (VR): I definitely agree that retail expansion is an important and crucial element. Retail is all about presence and distribution acts as the key. Our strategy is to be everywhere, not just in width but even in depth. We are opening stores in both metros and in Tier II cities. When we talk about expansion, though metros are important, but smaller towns also need to be addressed. Consumers from Tier II and III cities are aspiring for the same lifestyle as metros and they have the disposable income to support it too. Jewellery brands at times forget that consumers everywhere want to secure their investments and therefore prefer the organised players because of better service and popular designs. Tara Jewellers plans to take advantage of this in smaller cities.

We had 30 stores across 19 cities and now this number will expand to 50 stores across 37 cities by the end of June this year. We have already opened six of these stores in Jodhpur, Udaipur, Jaipur, Jalandhar, Ludhiana and Bhatinda. The expansion which started from western side of India will now spread out to most of north and north-western India.

SP: Indians have always loved gold the most. How do you plan to sell diamonds to the smaller cities?

VR: We have worked in the international market for 19 years. Our entry in the Indian market was only after extensive research was done to recognise the key barriers to purchasing diamonds for Indians. We found that Indians perceive diamonds as expensive, a misconception that has emerged. There is not enough knowledge about diamonds amongst Indians. Jewellery buying is part of the Indian tradition and we plan to market ourselves in that way and not use a celebrity to represent us. We intend to educate Indians about diamond jewellery. Our stores too are designed on those lines. There is a browse wall where customers can see the designs that are displayed, an education wall that is dedicated to helping customers understand the finer points about diamonds, an open workshop which enables customers to see the ‘behind the scenes’ of the craftsmanship and finally a collections wall that has different categories of jewelleries together to form a set for customers to have a better styling option. The consultation tables offer customers the chance to sit and have in-depth discussion on their purchase options and get detailed information about the pieces from the trained staff. The idea is to make the buying experience more enriching so the customer would choose us for all consequent purchases.

SP: What was the investment made for each store and how were locations chosen?

VR: Each store has an average size of 1,000 sq ft and requires an average investment of Rs 3.33 crore. We chose the international design consultancy, Fitch, to design all our stores and have maintained a standard design in all. We are on the path of building a brand identity and Tara’s unique experience needs to be the same at every store. But retail is a local game and we have tried to reflect the local community in each store. Jewellery is something people do not buy without planning. Therefore in each city, we chose to open stores in recognisable jewellery clusters and high streets where most customers come with the intent to buy. We want the customer to consider all options before buying.

SP: You recently started IPO. How has the strategy helped you?

VR: The IPO was started in order to realise our expansion plans. Initially we opened 30 stores as a test to check how viable the market was. We got a pre IPO investment from Swarovski for Rs 40.5 crore. For the expansion we raised Rs 220 crore- 150 fresh issue and 66 for the new stores.

SP: What percentage of sales goes to advertising and promotions? Elaborate on your recent promotional and media campaigns?

VR: Our promotional budget is 3-4 per cent of sales. We typically look at 50-50 distribution in ATL and BTL activities. Tara Jewellers TVCs have recently gone on air. Promotion is important for us right now, because people need to know the brand before they buy jewellery from us. We are working on building the customer connect and have therefore chosen the slice of life idea and not celebrities for all our promotions.

SP: Are you using social media for promotion? How are you leveraging e-retail?

VR: We are currently on Facebook, but expansion online is still in progress. We are not looking at selling online yet as we are focused on building our brand first.

Stay on top – Get the daily news from Indian Retailer in your inbox
Also Worth Reading