How should G & J sector retailers face the upcoming economic crisis?
Irrespective of the economic crisis, there will be a certain set of customers in the market. The challenge will be to get that set to come to buy from your store. No one needs to think that because this is a global economic crisis, there is nothing I can do about it.
Many jewellers think that they will have to wait for the customer to come to the store. The real effort they should be taking in this scenario is to go out and get the customer.
No one needs to think that because this is a global economic crisis, there is nothing I can do about it
What are the top three things that gems and jewellery retailers can do to get the customers to come to their store?
Many jewellers have to reach out to their prospective clients, over whatsapp, or SMS. During the lockdown, there were retailers who appointed marketing personnel to reach out to their potential clients and enquired generally about their wellbeing via emails, SMS or whatsapp.
Second step was to reach out and talk to their potential clients, engage with them, listen to their worries. Retailers must have a good database of their clients, save their numbers, addresses, et al. You must have a comprehensive database of your clients. During such times, such a database can help retailers.
For those retailers who have been unable to prepare such a database should inculcate these new business habits, and re-visit that business model to include such good practices in their day-to-day working. You can call it the new Post-Corona (PC) business model.
You must have a comprehensive database of your clients
Staff must be trained to start making telemarketing calls. Some retailers will have to make the extra effort to narrow down on their staff, who are most productive, and flexible with new business practices and always willing to learn something new. Only such persons will survive in this PC business environment. Others will invariably have to exit. These are difficult decisions, but in order to keep the overheads minimal, business owners may sometimes have to make tough choices.
Work from home, needs a different mindset, the business owner has to display more involvement – and leadership skills during the lockdown, staff members should have been given all these tasks and business owners should have been alert to see who has performed well, and who hasn’t. One thing, business owners must realise that since it is their business, they must be more involved in it, as compared to their staff – they should ace all their staff members when it comes to skill, knowledge, performance, proactiveness – they must lead by example. Only such leaders get true respect.
Third is that the inventory should be better managed. During the lockdown, gold prices have soared, so the very cost of the inventory has increased in multiples – so their ‘book profits’ have increased despite the fact that there was no business at all. They must account for such profits, which is their gain.
What are the first few most important things that a jewellery retailer should do soon after lockdown, with respect to business development?
Social media marketing involves no extra cost and should be undertaken by all jewellery retailers – they need to be as creative as they can, so as to attract many viewers.
Many smaller jewellers do not take this extra effort. If they don’t, their competitors will take that effort and take away all clients, which the other jeweller would have got.
PC is a situation – where creativity, leadership, out-of-the-box thinking will rule the roost. Any digital marketing will work in this situation. They are expected to come out with a number of discount schemes.
How can retailers cope with the cash crunch?
Like, I have said before, gems and jewellery business always shows profit – even if there is no actual sale, because the price of gold rises even during lockdown. This season it is rocketing and there is news of it reaching new highs in the near future as well.
When the stores re-open, jewellery retailers will be selling inventory at a higher cost – with more profit than they expected in the first place. This is their gain. Jewellery retailers are aware of this. They can sell off some part of their inventory – in order to raise some cash – if they want to infuse the business with minimal new cash. They are investing in their own business – not in someone else’s business – why should they shy away from it? They can monetise their inventory and invest the money raised in their business.
They are investing in their own business – not in someone else’s business – why should they shy away from it?
See, when prices rise, retail demand goes down, for instance if a person with a wedding in the family had made plans to buy gold worth Rs 5 lakhs, s/he can buy 20 per cent less gold for the same value – since price of gold has increased. So that 20 per cent of gold can be safely sold in order to overcome the liquidity crunch. This is something which every jeweller – large or small can do. So, there is no reason to panic. The cash crunch in jewellery business in more of bubble.
What if many customers come to sell gold, instead of buying gold?
The cash raised by selling off excess 20 per cent inventory can be used to buy this gold from your own trusted customers. Every jeweller buys old gold at a much lower rate. Turning down a needy customer would be wrong. Six months down the line when the same customer walks back in your store to buy gold – at an even higher price you are going to get the reward of your fair deal.
Never turn down a person in need of cash, that is the foundation of a good gems and jewellery business – it is these people who will never go to any other jeweller – because you have gained their trust. This is a huge gain and an investment which will always give good returns.
What if there is a Corona 2.0 affecting the world after we come out this current situation?
Life is unpredictable – no one has any control over such global crises. So we have to raise our own immunity – personally and professionally.
Improve your lifestyle – your business model – foolproof it to meet any difficult situation whatsoever. You can overcome any problem – if you resolve to. Do not worry, because you are not alone in fighting these battles. The whole world is fighting and some, are worse placed than you are.
Life is unpredictable – no one has any control over such global crises. So we have to raise our own immunity – personally and professionally
What ails the gems and jewellery retail business?
Many retailers don’t want to change. They want to stick to their traditional ways of business – despite the fact that the whole world around them is changing. That is the reason – youngsters do not want to buy gold – they would rather buy a fancy mobile phone or laptop, rather than use that money to buy gold.
Many small jewellers are so stringent that that would not want to spend the two per cent charge on payment by credit card, which the customer offers while buying jewellery.
On the other hand, a branded jewellery store – where the price of the same piece of jewellery may be higher, but they accept all modes of payment with a smile. Small jewellery retailers must adapt to such situations. These are basic changes which the whole industry must adapt to.
Do you believe this online business model will survive?
You will get discovered online, and buyers will come to the store in person. If there is no online presence – then you are not even in consideration of whether the younger generation wants to walk into your store.
You may have 10,000 likes on FB, or Instagram – and they may not be translating into actual sale. So in such situations, you must follow up with those who have ‘liked’ your online product display. Keep on sending them newer catalogues – links, etc. pursue your virtual prospects.
The PC business environment forces retailers to accept a new normal. It is in their hands – whether to accept it willingly or get forced into it.
Mr. Shivaram can be contacted on 09036036524 and email@example.com.