How Titan Jewellery has Virtually Brought the Store to Customer's Home?

The year 2020 has not been what various retail brands and retail consultancy firms had predicted and expected it to be and while 2021 is not looking too great either with the second Covid wave, the industry has been quick to pivot in response to the falling business, overwhelming the sense of fear and caution amongst people and changing consumer behaviour caused by the pandemic. While the pandemic had a massive impact on companies and brands across segments, the jewellery industry has been one of the worst-hit with wary customers and negligible sales.

The second Covid wave that started mid-February 2021 has largely hit the gems and jewellery sector and automotive dealerships, which had so far benefitted from the release of pent-up demand. Somasekhar Vemuri, Senior Director, Crisil Ratings, 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 jewellery is one sensitive sector currently.

According to Gem and Jewellery Export Promotion Council (GJEPC), the overall gems and jewellery exports stood at Rs 273.41 crore during April 2020 following lockdown in various parts of the world. However, the demand is back in major export markets as the overall shipments of gems and jewellery surged to Rs 25,226.11 crore year-on-year in April 2021.

Exports of cut and polished diamonds (CPD) in April grew to Rs 16,538.84 crore as compared to Rs 261.19 crore in April 2020. Gold jewellery shipments surged to Rs 5,060.23 crore compared to Rs 1.55 crore a year ago. Silver jewellery exports rose to Rs 2,240.13 crore from just Rs 5.05 crore in April 2020. Similarly, exports of coloured gemstone in April increased to Rs 163.66 crore against Rs 4.13 crore.

While the industry is doing great in terms of exports, major players in the segment are strategising and pivoting to stay relevant among the customer base back home. The most recent ones that are working under the current circumstances have been the advent of online shopping, omnichannel retail and the inclusion of the latest technological innovation.

The jewellery division under Titan Company Ltd that houses brands like Tanishq, Mia, Zoya and online-born Caratlane, is continuously innovating while also expanding even during the pandemic with its right set of strategies to navigate through the current times.

In an interaction with Indian Retailer, Ajoy Chawla, CEO- Jewellery Division, Titan Company Ltd, talks about what really worked for the jewellery major during the ongoing second wave. Titan Company bounced back from the slowdown due to the pandemic with its jewellery brand Tanishq registering a sharp growth during the festive season in 2020.

Addressing the Changing Consumer Behavior

One of the many changes brought by the pandemic is consumer shopping behavior. Consumers are expected to wait for few months before starting to invest again in gold and jewellery. While it's being said that it will take at least a quarter for things to stabilize, Titan’s jewellery segment has figured out ways that would keep the business running.

“We have witnessed a few trends or changes that have come along with the pandemic among the customers. The sense of safety and well-being is one thing that has emerged very strongly and it's not just for customers but also for our employees and the entire ecosystem – be it staff, franchise partners and their staff, karigars, etc. I think building a safe environment and building a safe way of working and inculcating it as a culture is one big theme. And we have found that people truly value safety. It has become a confidence-building measure for customers," maintains Chawla.

The second most important thing is convenience. Customers today want to shop remotely (where they are leveraging digital tools but it really is a physical experience between two human beings separated by a screen) as also digitally (which can be either pure online shopping or supported or enabled by a live chat). Thirdly, we realized that people continue to celebrate milestones - those who had missed birthdays, anniversaries or special occasions wanted to catch up on them a little later and so like weddings, it became a deferred demand. Further, there has been an increase in the share of wallet spends on weddings for jewellery since other spends came down and jewellery is something which has a deeply emotional and ritual connect,” he further adds.

Tanishq also worked on its products to make them more accessible for people hit by the pandemic. The gold price rose dramatically over the last 18-20 months (from Rs.35,220 in 2019 to Rs.50,620 in 2021) and people’s spending power remained almost the same and therefore there was a need for the brand to offer similar looking products in a lighter weight.

Tanishq had announced in October last year that it is working on reducing the weight of jewellery by 20-30 percent. The work from home and virtual interactions also necessitated the jewellery major to focus on above the keyboard jewellery – earrings and pendants in light-weight. Also, with today’s consumers being conscious than ever before, there is a growing demand for minimal jewellery pieces which are sleek, dainty, classy and for this, while Mia is taking the lead, minimalism as an element is being inculcated in Caratlane and Tanishq as well.

Consumers today are gravitated towards brands, not just on familiarity and reliability factor, but are looking for brands willing to have a conversation, they are attracted towards the brands with a cause, they want to see the role that corporate brands are playing during a humanitarian crisis like this.

“As a conventional brand, you show that you have a good design, a pretty picture and purity of the material used but I think that’s not enough. What’s really promoting a brand is a deeper story, a more authentic story and what is it that the brand is showcasing. While many of these were already work in progress, but what the pandemic has done is it has, in a way, accelerated some of these changes and brought them prominently into focus,” says Chawla.

What’s Working?

The pandemic is leading brands - both online as well as offline – transition into the virtual world in order to remain relevant for the consumers in times of the new normal and the year ahead will make the overall industry more inclined towards the use of all kinds of technology.

Ajoy Chawla avers, “Tanishq had already begun investing for a digital or omni future a few years ago. We have been, in a way, experimenting with digital initiatives – from simplest things like websites to making it simpler and frictionless, endless aisles was an initial initiative that is still working at its own pace. We had started thinking about concepts like pure online selling and joint closure (wherein conversation starts online and is completed offline). The pandemic only accelerated all these initiatives.”

The pandemic has accelerated the shift towards a digital world and various segments are witnessing changes in online shopping behavior that will have lasting effects. The last few months have reshaped how people shop for jewellery and brands in the category are offering more online services that would give them an in-store experience while sitting at their homes. Jewellery brands are opting for options like video calling, 360-degree store tours, virtual jewellery trials, and real-time live assisted chat to enable seamless online shopping. A lot of these VR experience in shopping is being offered by StyleDotMe’s platform mirrAR.

Ajoy Chawla asserts, “We witnessed a lot of our customers coming online, even the conventionally offline ones and because they needed help on how to select and buy online, we enabled a few hundred of our retail staff to come online and actually chat with the customers to help them out. We achieved sales of around Rs 30 crore in the month of April, purely based on the new model. We also enabled a video calling feature wherein one can see products based on their likes and interests and while the store staff tries the piece on to give them the real feel of shopping at a store and this process could take anywhere between 45 minutes to 4 hours. Besides, we introduced Endless Aisle featuring more than 20K SKUs, which though existed before was not being used on such a large scale. We were already offering ‘Try and Buy’ with Caratlane to enable online shopping and later it also became Tanishq’s and Zoya’s method of reaching out to customers. And then, there are other elements like ‘Pay from home’ which are working great with our consumers. We have achieved a turnover of around Rs.500 crore last year with our omnichannel sales which is a 4x jump but still about 3-4 percent of our total turnover and we think this can further grow very fast. If we put together digital and experience shopping, they have become a 9 percent contributor to our total sales for last year.”

Online vs Offline

The jewellery segment, like many other categories, is moving towards e-commerce and Tanishq is no exception. The brand has an integrated team with good IT and UI/UX support to enable omnichannel sales seamlessly. While this is the preferred way of shopping currently, will it outperform offline retail in the coming years is what we are wondering?

Ajoy Chawla, however, feels that customer is more into a seamless integration of online and offline channel rather than pure online or offline.

He adds, “From being less than 1 percent, online and omni has come to 3-4 percent and it’ll become 6-7 percent of total sales over the next few years. Clearly, 95 percent of our business will still be offline especially for Tanishq which is a serious jewellery brand. But while we are trying to draw this boundary between online and offline, the customer isn’t feeling that and is operating as a buyer whose journey is very seamlessly omni. The lines between them are therefore blurred so even if one does not buy online, he might get influenced by the digital world or even OTT platforms. So it is difficult to make out where does the online end and the offline begins. This trend is going to grow and it is imperative for brands to embrace and adapt it and learn from it to move ahead.”

Meanwhile, the jewellery powerhouse has continued its expansion drive even during the pandemic year. Tanishq is present in 215 cities with 359 outlets or more than 500 outlets if we include Mia, Zoya and Caratlane stores.

“In the jewellery category, I think the touch and feel, how it fits and looks, views of the store manager or store staff, really matter. The customer is looking at physical experience because they are spending a lot of money and so one would not want to leave it to a pure online thing. Jewellery shopping is a pleasurable exercise, it is an indulgence. And this can be achieved only through real experience and not virtual ones. Customers like to experience the brand. We have realized that customers mostly prefer not to travel too far and actually go to the neighborhood store for their jewellery needs, so while big stores in major areas are important, it is also important to have a store in small areas and towns. I would like to believe that real relationships are built by real experience and so, we have our stores in 215 cities already and we are continuously expanding. We are clear on continuing a strong physical game by adding more stores each year. We have added about 25 stores last year even in a pandemic year and every year, we have been adding around 35-40 stores. We will continue that journey and have planned store opening for this year as well,” points Chawla.

Going forward

As per Union Budget 2021, the GJEPC has proposed a reduction in import duty on cut and polished diamonds to 2.5 percent, from the existing 7.5 percent, in order to double exports of gems and jewellery to US$ 70 billion by 2025. While the segment’s apex body and even the government is working towards upscaling the industry during the pandemic, jewellery brands are betting on the upcoming festive season and weddings to help them revive sales. Tanishq currently draws over 20 percent of its sales from the wedding jewellery segment and is making efforts to cash on the same by launching region-specific collections.

While majors like Tanishq and others are navigating through the pandemic with their carefully curated playbook, it is the small retailers or mid-sized brands that are most impacted by the second wave.

Advising fellow brands from the industry, Ajoy Chawla says, “While there are no set rules and brands today need to try and experiment at smaller levels to gauge the ideas and implementation, there are few tips which I believe can help. Firstly, there is a need to be able to showcase your product online and it is also important to have good photography of the product with a good narrative in order to make it easy for the customer to search. Thirdly, the e-commerce store needs to seamless with a backend team to oversee and ensure the ease of shopping online. Staying connected and updated through social media is another important aspect to attract customers.”