Why E-commerce in Jewelry is a Big Challenge
The time is right for the jewellers to strengthen their omni-channel presence to influence the consumers
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E-tailing boom has not spared any sector. In some sectors like food and electronics, e-commerce has secured considerable market share, with the click-happy generation accepting it as the comfortable alternative.
But, jewelry sector is a different story. E-commerce is yet to emerge as an alternate space for sales. Estimates showed that the market size of jewelry retail is just $135 million, whereas the total jewelry retail jewelry retail market is pegged at $75 billion as of 2017. So, the share of online jewelry in the entire jewelry retail narrative in India is close to microscopic – just 0.18%. In 2017, the total online sales reported by all jewellers in the country worked out around Rs. 600 crore – which is equal to the annual sales of one top-performing store by a leading retailer.
E-Commerce and Jewelry
Jewelry e-tailing has a long way to go to offer a semblance of competition to the traditional offline jewelry retail in terms of numbers. This is because of many reasons, first of which is the preference of Indian customer for touch-and-feel model. This is particularly true with the womenfolk who constitute the majority of buyers. The looks and features of a person differ completely from one to another. Hence, still the women would prefer to wear and assess an ornament, whether it is necklace or earring. This in-store experience still holds back the buyers from going online.
Trend of online purchase
The analysis also shows that the ticket sizes are essentially low in the online sale. People tend to buy jewelry online for birthday or wedding gifting purpose and the majority of the online buyers are male. Hence, the most of those online jewelry players haven't even reached the break-even still.
But, online space has emerged as a perfect foil, as it is one of the key influencing tools for offline sales. It actually sets the pace of the offline retail in terms of footfalls to a store and actual conversions.
Awareness amongst customers
Nowadays, the consumers prefer to carry out detailed research on products, compare prices online before dropping into the store. For them, smartphone is not the most preferred online buying tool. Instead, it has emerged as the most convenient channel to do all the price and feature comparisons. The buying journey of a consumer actually goes through several stages like awareness, consideration, taking the decision to buy and purchase. Earlier, the journey was linear in nature, as buyers used to compare products store-to-store. However, the emergence of online retail has made the journey multidimensional with a number of back and forth movements in each stage. "Research online, purchase offline' has become the new mantra, which is true for jewelry. Consumers go through blog posts, videos and reviews to arrive at a particular purchase decision.
The online influence on offline retail becomes even more significant and decisive when it comes to purchasing jewelry – a product which is precious in nature and usually comes with design intricacies. Because of that, people still rely on the touch-and-feel aspect while buying jewelry from their favourite jewelry retail store. Especially when it comes to big-ticket purchases, people still prefer to visit jewelry stores and a retailer increases turn-over and makes profit only from the high-value purchases.
Online space provides the retailers ample opportunities to influence their target audience, establish contacts with them. Product selection, price inquiries, checking the latest designs – all are now happening online. A positive product or store review, a nicely shot jewelry image, a blog on the latest collections, positive social media buzz, an attractively designed website – all go a long way in positively influencing the consumers' decision-making process.
Now, the time is right for the jewellers to strengthen their omni-channel presence to influence the consumers, as the consumers will become even more dependent on online to carry out product researches. Offline retail should no longer be looked at in isolation. The retailers should integrate their online presence to their offline presence to derive better results at their retail stores. At the same time, it is a forgone conclusion that online sales will also pick up in the coming years.