The Covid-19 pandemic has crippled India’s economy. Like many industries, the jewellery industry too has been hit hard owing to a long list of cancelled or postponed events, shows, exhibitions and weddings for the next few months. Major jewellery brands had expected 2020 to be a doorway to a plethora of business opportunities. The production, supply and export were aligned to meet the desired goals towards the end of the year. However, Covid-19 was a big factor that turned the smooth operations upside down. As businesses lost their profitability, the managements of key players duly intervened to fire-fight the crisis.
The gold rates have fallen significantly and the world’s second biggest gold consumer has tumbled down as it is witnessing the slowest pace of growth in the last 11 years. The health authorities are discouraging people from venturing out for business or leisure which has brought exports and imports to a grinding halt. Various avenues for investments that have not been explored due to the inactivity in the industry have led to serious liquidity crunch. The businesses were thriving on constant demand before the pandemic broke out. The jewellery industry has suffered major disruption in its operations across the globe.
The industry is witnessing no footfall at jewellery stores and despite the ongoing peak wedding season, mass shopping has come to a standstill. While businesses are still dealing with financial challenges, it is daunting to see the effects on the gems and jewellery industry.
As a precautionary measure, the government has encouraged it’s citizens to postpone wedding functions and only venture for essential commodities during lockdown. The Indian jewellery market thrives on weddings. The industry further lost its lustre on the festival of Gudi Padwa which suffered a setback during the lockdown and lost a great opportunity to clock high sales. On the bright side, the industry is likely to pick a steady pace post July 2020, from China to Europe to the US – but the volumes are set to dip by about one-third.
The Covid-19 pandemic has disrupted the world and businesses are searching for future trends and strategies in a post-Covid-19 world.
Trend 1: Digital Consolidation
Digital media is a key element in any omni-channel experience. Brands need to be agile in figuring out and acting upon how consumers shop to convert consumer engagement into purchase – in a socially distanced world.
The brand can go online, leveraging strategic digital marketing, social media and celebrity endorsement, to take jewellery beyond traditional bridal designs, diamonds and high-end jewellery stores. Brands and businesses could leverage influencer programmes and analyse online consumer purchasing behaviour to accelerate conversion. The integrated programme works on the 4 Ps of Marketing; Product, Price, Place and Promotion, to combine targeted digital marketing with event-driven omni-channel campaigns
Trend 2: Branding and Storytelling
A majority of consumers express their willingness to spend more or the same on precious jewellery than pre-Covid-19 after things return to normal and strong brands that tell a compelling story will lead the way to recovery.
Few jewellery brands exclusively and directly target mature consumers. Different marketing campaigns in India also captured the needs of a new generation of young and affluent male consumers seeking a more contemporary expression of their personal success and value. The early phase of omni-channel marketing from retail partners enabled few brands to reach a large number of stores across multiple cities within just 4 months of launching.
Trend 3: Mid-Market Extinction
Finding and owning the right territory with the right business model is becoming a necessity, especially in a market that has become more competitive overnight. As traffic to stores has declined, driving higher margin sales has become an even greater priority for business owners.
The plan needs to have a multi-pronged strategy that drives traffic to stores, creates upsell opportunities and rewards high performing stores and sales staff through a sales-linked award programme. The collection creates an aspirational positioning for designer jewellery in India targeting young as well as the mature consumer base.
Consumers re-evaluating what’s meaningful in life
The Covid-19 pandemic has disrupted jewellery business globally, but it also provides unique opportunities. In designer and fine jewellery’s market, the majority of consumers are re-evaluating their priorities in life and show their willingness to spend the same or more on jewellery than pre Covid-19, either to feel good about themselves or to express appreciation for their loved ones after these difficult times. Jewellers who are prepared to meet that need will definitely benefit.
Although the first quarter was unfruitful, it is hoped that the second quarter will make the industry flourish. While businesses are eagerly waiting for the curve to flatten, this crucial time can be judiciously utilised to lay out a Covid-19 action plan that can be executed in the near future. While the industry is staring at major losses this year, the need of the hour is sustainability in the long run, driven by a well-laid-out plan.