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.

Solitaire - - CONTENTS -

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.

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