The Indian Gems and Jewellery industry is continuously evolving and matching pace with the growing digital economy. Traditional offline jewellery retailers are developing their online capabilities, while online-first Jewellers are rapidly expanding their offline footprints.
“Online jewellery retail is currently around 2% of overall jewellery retail in India. However, online-influenced offline retail has grown to as high as 90% for some of the top online-first Jewellers in India.”
This article evaluates the pros and cons of offline and online retail and attempts to predict the future of Jewellery retail in India.
Pros & Cons of Offline & Online Jewellery Retail
The above chart shows both advantages and disadvantages of offline and online retail. The key advantages of offline retail are high conversion rate, high transaction size, customer relationship, and high profitability. Online retail presents unique advantages in terms of customer reach, scalability, flexibility, and real-time data analytics for faster decision making.
Why has it become a must for offline Jewellers to have an online retail presence?
The below two quotes best explain the importance of online presence for any business:
“If your business is not on the internet, then your business will be out of business.” – Bill Gates
“The smallest company in the world can look as large as the largest company on the web.” – Steve Jobs
The disruptive and empowering nature of the internet has made it essential for any progressive thinking business to go online.
Customers have already shifted online. The Internet has empowered them to demand anything, anytime, and anywhere. Their typical buying journey begins online. For example, customers may discover jewellery on social media, visit the Jeweller’s website for more information, compare similar products, evaluate the brand’s online reviews, and finally decide to purchase either online or offline.
This shift in customer behavior requires Jewellers not only to be present online but also to make every touchpoint shoppable.
“Jewellers that are not present online will lose visibility and become less relevant to the digital customers.”
Why are online Jewellers choosing to get into brick and mortar stores?
Most online-first Jewellers that have grown fast have struggled to make profits online. The main reason has been the low online conversion rate, especially for high-value precious jewellery, which is unique and non-standardized.
“In general, brick and mortar precious jewellery stores have >50% conversion rate as compared to <1% conversion rate for online precious jewellery stores.”
Many customers who discover jewellery online still want to complete the transaction offline after seeing, touching, and feeling the jewellery.
This is why online-first Jewellers have started to expand into offline retail. With the omnichannel expansion, they have been able to realize higher conversion rates and faster profitability.
“Online is a fast way to get started, offline is a faster way to scale and turn profitable.”
Is it possible for a Jeweller to sustain on only one of the platforms?
Omnichannel customers are more profitable as compared to offline-only or online-only customers. Hence, Jewellers that choose to remain offline-only or online-only would eventually lose out to their omnichannel competitors.
Also, Jewellers with an omnichannel presence will be able to deliver a better customer experience and are more likely to take away market share from single-channel Jewellers.
How are these omnichannel intertwined? Why is it important for both platforms to work in harmony?
Customers want the flexibility to choose from multiple channels based on time, interest, occasion, budget, or urgency.
They also want an integrated and seamless experience to easily switch from one channel to another.
Below are examples of integrated online and offline channel benefits
- Customers can browse online, select jewellery, and schedule a video call with a store representative to close the final order
- Customers can order online and pick up in-store or order in a store and get it home delivered
- Customers can buy from anywhere and return or exchange anywhere
- Customers can visit a store and browse through the Jeweller’s virtual catalog for greater choices
Which of the two platforms is more profitable?
For high-value precious jewellery, offline retail is more profitable given the higher conversion rate and higher average transaction size possible in a physical store. But without an online presence, offline-only Jewellers would find it difficult to attract new customers
Online is a faster and less capital-intensive way to start and build a jewellery business. But it is very difficult for an online-only Jeweller to scale profitably. Online-first Jewellers who decide to expand offline can leverage digital to drive offline store traffic more cost-effectively.
Overall, Jewellers with omnichannel presence would enjoy the benefits of both online and offline jewellery retail and thus realize higher profits.
What is the future of jewellery retail in India?
The future belongs to omnichannel Jewellers who can provide a seamless shopping experience across multiple channels.
Jewellers need to gradually build their omnichannel capabilities leveraging the reach, flexibility, and scalability of online retail along with the personalized customer relationship and profitability of offline retail.
“A digital-first and customer-first mindset would be crucial for omnichannel success.”
Note: This article was exclusively written for SVAR – The Voice of Jewellers.
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