The New-age Retail Rules
VIJAY JAIN, CEO and director, Orra, a high- end jewellery brand, tells Solitaire about new strategies that retailers could adopt to cater to millennials, the importance of visual merchandising, and the threats that the retail jewellery industry is facing.
You have spoken about the need to change the way we merchandise and not just think of the carats/kilos of diamonds and gold sold? What would attract today’s millennial to walk into a store? Could you explain in detail the importance of visual merchandising? How has it been implemented at Orra?
The most important thing to recognise is that while the trade thinks in terms of carats and weight, most consumers on the other hand come to a store with a set price in mind. They have a budget for different occasions such as an anniversary, birthday, wedding function, etc., and look at an overlay in terms of total value rather than in terms of carats and grams. Therefore, it is important that jewellers start thinking of price points rather than carats and weight, and ensure an adequate range from a price perspective be made available rather than from a weight perspective. The trend among millennials is in ‘sharing’ and not necessarily in ‘owning’. They do not like being forced into making a purchase decision. Experience is very important for them, and so when they buy jewellery it is no longer just the jewellery but the entire experience around it. This is in terms of where did they go, what was the environment in the store, staff interaction, visual merchandising, the story behind the product and the provenance of the product. Focusing on the experience will be as important as the jewellery itself. At Orra, we believe that the fourth dimension in retail is the “experience”, and for the consumer to truly experience an international brand, we needed this premium imagery to be translated into an international store format for the brand. Factors like store space, décor and ambience become very important. Visual merchandising also plays a very important role here. Including displays, décor, signs, write-ups or layouts they help attract attention and allow the customer to think beyond product. In the digital arena, this can be in the form of tips, lifestyle, trending stories and style information that are light-hearted as well as provide information appeal to them. At the store level, the customer wants to enhance the information that they have
received already through these different mediums. So if we provide them with an experience it would be an added advantage. For example, the brilliance scope is placed at every Orra store allowing customers to experience the brilliance and fire of our diamonds. Since we launch around four new collections every year, we work extensively towards keeping the décor fresh and attractive—from prominent window displays highlighting the flavour of the season to collection-wise detailing with the right mix of colours. We ensure that no customer who walks in misses them. The theme of the visual merchandise would ensure months of proper planning to execute the right feel for the store. While what we showcase may not necessarily lead to a direct sale, it helps influence their final purchase decision. This form of engagement and fond brand recall, works towards building a long-term relationship with them.
You have been voicing your concerns about a few challenges that the jewellery industry is facing at the moment. One of them is destination weddings and the options of going in for alternative accessorising. Could you elaborate on how the jewellery industry should tackle this issue?
Destination weddings showcase the rising affluence of the people of India. Beyond travelling to different exotic locations within the country itself, we are seeing a rising trend towards international locations gaining more popularity for weddings. This trend is no longer limited to extremely rich families. Even middle-class families are moving towards destination weddings outside the country. Jewellery, and more so precious jewellery, has always been of significance at weddings. Precious jewellery was not only worn by the bride but by invitees as well. Given the cumbersome and difficult process of having to take your jewellery to the customs, declaring it, getting a valuer to value it and the time consumed, people
don’t want to go through the hassle. Instead, they are moving towards choosing nonprecious jewellery for such occasions. We have therefore seen an increasing trend not only among the rich but also the super rich taking non-precious jewellery for weddings. So, if the super rich are willing to wear non-precious jewellery at weddings, it runs a risk of being an acceptable social norm not to wear precious jewellery by the in-betweens as well. Traceability is now the buzzword for responsible sourcing of gold and diamonds. How will blockchain technology aid in maintaining mineto-store provenance? A revolutionary aid in this world of digital transformation, blockchain technology will help customers increase their trust in the brands they associate with. Responsible sourcing of diamonds clubbed with ensuring purity has been further accentuated. While organised players have already made an effort to ensure that consumers get all the information regarding the diamonds that they buy, India’s jewellery market still has largely 70% of unorganised players, and we have a long way to go. Orra is one of the few retailers in India that focuses on not only unearthing perfection from the depths of the earth, but also seeing the diamond through its journey of cutting and polishing for its eternal radiant glow. Apart from this, Orra constantly undertakes self-assessment of its products, striving to provide only the best to its valued customers. As an extension of this, Orra also follows internationally acclaimed Best Practices and Principles (BPP) as defined by Diamond Trading Company (DTC) and Responsible Jewellery Council (RJC) processes. Blockchain technology will only further accentuate responsible sourcing. Tracking the journey of gold and diamonds from mine to retail stores will help customers rest assured that jewellery that comes from the brand is sourced in a professional, ethical, social, environment friendly and accountable way. In addition, it will also ensure complete disclosure and release of all available information about the product. Such transparency allows for strengthening of the overall faith that the end consumer has in the industry. Current technology and cost structures are already in place to allow blockchain to be feasible for solitaires. However, the challenge is similar to what we face in GST from a perception point of view. Unless the prior person does not confirm both purchase and sale, the next successive person cannot do the same. And therefore for it to be truly successful, you have to have adequate people in the entire supply chain who are willing to come on board and be transparent. This will not only provide provenance but establish ethical ways of doing business. However, current technology and costs do not allow for the smaller stones, say up to 5 cents, to be tracked at an individual level. This can be overcome in the short term by tracking a pack of goods rather than an individual stone. What’s your take on synthetic diamond mixing? What measures should manufacturers and retailers take to ensure that consumer confidence is retained in diamonds? I believe that there are two distinct markets – the natural diamond market and the synthetic market. And the challenge is not the co-existence of natural and synthetic, but the risk of diamonds being mixed. Synthetic is a man-made technology-created stone, which means that with every passing year the value of the synthetic stone will keep coming down. For example, let’s say today a diamond costs $100, the synthetic is likely to be priced at $70, and in the following year as technology improves the price of the synthetic is likely to fall from $70 to $50 and so on and so forth. In the Indian context, the underlying value of the jewellery is very important from a consumer’s perspective. So we do not believe that the consumer will buy a synthetic stone for $70 instead of a natural stone for $100 if he realises the value of the synthetic will keep falling every successive year. So the markets for synthetic and natural stones are very, very different. The challenge however, is that unscrupulous players are mixing both natural and synthetic and selling it as natural. Currently, consumers are not so aware and neither is the technology readily available at a retail level for it to flare up. However, it is a matter of time and it would be as short as a couple of years. If there is a mixing of stones it will shake the confidence not only in the store/ brand the consumer has brought it from, but also the jewellery industry. Therefore authenticity is absolutely critical. The ways to overcome this issue are multiple and will have to be an industryled initiative. As a jeweller, it is critical to establish who you buy the diamonds from and also the provenance of the stone. At present, technology already exists to do a quality check on loose stones. Recently, a scanning machine that has the ability to check for synthetics even in mounted jewellery has been introduced. Provenance, who you buy it from, and quality check are the three legs on which one can make a beginning.