No wedding or other festivities in India would be complete without jewelry. Even the idols in the temples are decked out during important festivals. But while jewelry is an integral part of Indian customs and traditions, slow demand has been demoralizing the industry lately — especially the diamond players.
Here are some of the strategies that industry experts have in place to beat the market blues.
Invest in generic marketing
Alkesh Shah, vice chairman of jewelry manufacturer Goldstar Group, holds the industry responsible for failing to promote diamond jewelry sufficiently.
“It is well understood that jewelry is not the main item on millennials’ lists, the reason being that we as an industry have not invested enough in advertising that would keep the customer eager and engaged,” says Shah. “We are thus competing with various industries like the mobile [phone], holiday destinations, perfumes, etc. Also, with some reputed brands going bust, we need to reassure the consumers on our commitment to ethics and authenticity.”
As a company that doesn’t deal directly with the consumer, Goldstar, too, has “held back on marketing spends,” Shah admits. But it does offer marketing and selling services to its retail clients as add-ons, including “high-resolution images, storylines, visual merchandising ideas and impressive trays, [as well as] customer relationship management [CRM] tools that help the retailer understand its customers’ buying patterns.”
Avoid discounting
In a sensitive market with increasingly skeptical customers, Shah says, “buying patterns and payment terms are undergoing a change.” But one thing he vehemently advises suppliers not to do is discount products.
“We must be certain of the customers we are dealing with and not go in for the short-term gains,” he warns. “It is not wise to drop low on margins. Some players in the industry are doing so, and this is detrimental to the long-term players.”
Low margins make it difficult for dealers to pay back their credit, leading them to opt for longer financing periods. In turn, “extending the long-term credit period affects the cash flows of the manufacturers,” he explains. As such, he says, it’s important for manufacturers and other B2B players to coordinate with each other and come up with a standard for their credit conditions.
Rajiv Popley, director of jeweler Popley Group, also refrains from offering cash discounts to lure in customers. “We follow a very strict and competitive pricing policy which is known to our patrons,” he says.
The customer is king
Rather than offering goods at lower prices, Shah suggests, jewelers should go the extra mile to strengthen service and bring in design innovations. Popley Group is a case in point.
Apart from offering classy and niche designs, such as its recently released 2018/19 bridal collection, “Popley has had a heritage of customer service since 1927,” says the director. He cites the company’s CRM and loyalty program, P.U.R.E — Popley’s Unlimited Rewards and Earnings — which “enables clients to be identified across all stores of Popley in India and the United Arab Emirates with the same privileges.” Customers who buy diamond jewelry collect “Glitter Points” that they can redeem for more jewelry purchases, he explains, adding that “all diamond jewelry purchases can be insured instantly for use all across India, even
on transit.”
Forging relationships with clients is key, affirms Navin Sadarangani, director of jewelry-retail consulting firm Nyuz.
“The way forward is to look inward,” he states. “Look into the people who made you the business you are, your customers — internal as well as external. A well-thought-out and participative loyalty program can be the most effective marketing tool. At the core of the program, the objective should be to build relations, not transactions.”
Price according to quality
One major issue is that people don’t really know the value of the diamond they’re buying, according to Jignesh Mehta, founder and managing director of diamond dealer Divine Solitaires.
“The biggest challenge faced by the diamond industry is the ambiguity of price vis-à-vis the quality of diamonds,” he asserts. “The diamond industry [has long failed to address] consumers’ concerns regarding quality, price and resale value of diamonds. This is a huge turn-off for the consumers, who then turn away to invest in other products and services, thereby creating a slowdown for the industry.”
Guaranteeing that diamonds are priced according to their quality is his company’s response to this problem. “We firmly believe that customers today need a strong value proposition to invest in diamonds as a reliable asset, rather than selling them on discount schemes.”
For the upcoming festive and holiday season, the brand is offering an 11-month installment plan for its solitaires and jewelry, with customers paying a fixed sum until the last month. This means that even if the diamond’s price goes up in the interim, they don’t have to worry about that difference until the end.
The brand’s transparent-pricing approach carries over to digital channels: Its mobile application gives the customer “a complete digital experience of her diamonds,” Mehta says, including “quality-guarantee certifications, as well as tracking the pricing and value of her diamond.”
Core concentration
When a jeweler has ties to an established name, it doesn’t hurt to use it. ORRA, a subsidiary of manufacturing giant Rosy Blue, is taking advantage of its parent company’s clout to market itself as a diamond retailer.
In addition to both digital and traditional advertising, says ORRA CEO Vijay Jain, “we have...pumped up our core alliances to promote our collections. Being part of the world’s largest diamond manufacturing company, in a fragmented and competitive market, we realized that our unique selling point would be to leverage our rich diamond heritage. From an aspirational, growth, premium and profitability point of view, we felt that diamonds were a better choice in the long-term market.”
The brand has chosen to highlight its bridal collection as part of its marketing initiative, “capturing the entire celebration, including mehndi [the pre-wedding henna ceremony], cocktails and reception,” says Jain. That means targeting not just the bride, but also the bride’s parents.
Know your audience
When devising a marketing plan, the key is to know your target customers, Sadarangani says. “Sell the need to the creed — what you have to sell should be showcased in the right way and in the right media to the right audience. Diamond-jewelry buying is [more] a call to emotion than a call for value. Once you understand that, your communication will tug at the heartstrings rather than at the purse strings. The Indian jewelry buyer is not brand-conscious; she wants a brand that delivers — design, value and customer service.”
Image: ShutterstockArticle from the Rapaport Magazine - November 2018. To subscribe click here.