The world has come to a standstill, the rapid pace of leading commercial hubs has come to an abrupt halt as Coronavirus is doing the rounds of every nook and corner -- forcing the rich and poor, the powerful and weak back indoors.

Where life itself adorns the garb of uncertainty – business seems to have been relegated to the farthest corners of human concern. In such unprecedented circumstances, every step one takes becomes a leap. The economic decline awaits in the wake of this serious health crisis and no one knows what else lurks in the background.

Experienced retailers present their views on how to overcome some of the toughest challenges that the economic crisis is likely to bring in…

#Scenario 01

What if many people come forward to sell gold?

A lot of jewellers are concerned if a large number of people come to sell gold, what will happen? How will they be able to buy so much of gold at such high rates? They cannot disappoint their clients as well, because they have been their customers for generations.

It is indeed a catch-22 situation, because we ought to honour the word, given to our esteemed clients, when they must have bought that jewellery from us, that we may have promised to buy it back, whenever they wish to sell it. The situation is indeed tough. The gems and jewellery industry is facing a serious cash shortage and this kind of an additional burden can prove disastrous.

As head of the Northern region for a lot of gems and jewellery associations, many jewellers have raised their concerns about this problem with me. I, honestly, feel this situation will not arise to the extent they are worrying about it. In India, jewellery forms part of longstanding a tradition. It is that asset in a family, which is never sold off, unless there is a severe crisis in the family – and the family has no option but to sell off its gold. Given the saving habits of Indians, on a large scale, and our frugal lifestyle, I do not think many women will come forward to sell gold.

Gold is an investment but fortunately it is not liquidated as often as in foreign countries. High price of gold may put off certain buyers, it may force them to buy lesser gold, but those families, which have weddings planned will inevitably, buy gold.

Despite my understanding, if such a situation were to occur, excess inventory that every jewellery retailer has stocked in the past can be liquidated and that money can be used to buy gold from their regular customers. The buying rate of jewellery is less than the rate at which we sell, so there is no loss in this transaction. Plus, keeping the customers happy is important for every business.

• Given the saving habits of Indians, on a large scale, and our frugal lifestyle, women will not come forward to sell gold
• High price of gold may put off certain buyers, it may force them to buy lesser gold, but those families, which have weddings planned will inevitably, buy gold
• The buying rate of jewellery is less than the rate at which we sell, so there is no loss in this transaction

Solution

Excess inventory that every jewellery retailer has stocked in the past can be liquidated -Vijay Khanna, Khanna Jewellers,Delhi

#Scenario 02

What if there is a liquidity crunch?

One of the foremost symptoms of recession is shortfall of cash in the market. While many corporate houses are going in for salary cuts – disposable income of the masses is on a steady decline. Gems and jewellery does not feature in the ‘necessities’ segment. So it seems inevitable that the industry is likely to face a liquidity crunch.

Liquidity is a matter of time. During lockdown, there was no income for any jeweller, we still had to pay staff salaries, and other regular business expenses. One major expense that was payment to suppliers was not there, because there were no orders to be placed. Whatever orders we had placed before lockdown, are yet to be delivered, only then those payments will have to be made. So when demand is low, supply of inventory is also negligible.

Also, gems and jewellery segment will arguably be the only business, which will not be affected by liquidity crunch for long. Even smaller jewellers will be able to have enough cash in hand to run their day-to-day operations. This is because, customers who buy jewellery do so at all cost. They have certain functions that they need to attend – irrespective of any situation and usually they have earmarked a certain sum to be spent on buying jewellery for this purpose. So they will go ahead to make the purchase. For instance, weddings may take place with lesser number of guests, or on a smaller scale, but the father of the bride will not cut down on gold that he wants to gift his daughter at her wedding. It is an investment he is making for her.

With other investment options giving negative returns – gold is one solid investment option, which is going to give guaranteed returns in future. So people would come forward to buy gold. Jewellers, also will have ample of cash once customers start buying gold. It’s a matter of time. Even during lockdown the gold prices have escalated and as a result the cost of inventory has increased in multiples. If all goes well, business will return to normal when lockdown is lifted.

All the same, if jewellers face liquidity crunch for a short while, they can avail bank credit, or sell off excess inventory, which will fetch a better price now. So cash can be arranged. Business owners can cut down on extravagance. The Reserve Bank of India, increased moratorium on loans. So, businesses can make use of these schemes in order to overcome any liquidity crunch they may face.

• Avail bank credit, or sell off excess inventory, which will fetch a better price now.
• Business owners can cut down on extravagance
• With other investment options giving negative returns – gold is one solid investment option

Solution

Avail bank credit, or sell off part of inventory, which will fetch a better price now and cut down on extravagance Priyesh Nagar, Madanlal Chhaganlal Jewellers, Indor

#Scenario 03

What if you are over orunder stocked?

Demand and supply parity can absolve many business problems and that is something that takes time to fall in place. When markets open across India and the globe, they may not happen simultaneously and obviously the demand and supply parity will take a longer time to come about. The volatility between these two determinants will keep affecting business all over – in the retail and wholesale segment.

Stores cannot afford to be either over stocked or under stocked. The prices of gold have risen during the lockdown since the past two months. So, it is advisable to sell excess inventory so as to infuse the business with ready cash. This can happen only when all markets open completely. By managing inventory to match the demand in the market, every jeweller can optimize profits.

Inventory management ERPs are available, many jewellery retailers are using those. Just before the lockdown was announced jewellery retailers have bought enough inventory, so when lockdown is lifted, stores will be over stocked with inventory, which will not have as much demand immediately. Therefore store owners may want to monetise part of it, and use that money wisely to meet their business expenses.

If a jeweller has two or more outlets, with the use of an app or any similar digital interface, he can share available inventory between his own stores, and show his clients all the stock that he has on sale via an app or his social media outlet, or website. In this way he can manage within the limited inventory that he has. In case a single store owner faces a similar, situation, he may have to buy stock – maybe on credit, if he is low on cash and sell it off immediately. In fact, many jewellers have an understanding with their suppliers, wherein they show (via internet) their buyers what suppliers have on sale, and buyers can select what they want over a digital interface, without the retailer having to actually buy from the supplier.

• If a jeweller has two or more outlets, with the use of an app or any similar digital interface, he can share available inventory between his own stores
• Inventory management ERPs are available, many jewellery retailers are using those

Solution

If you are overstocked, monetise excess stock and if you are under stocked, share inventory between branches or display products via Internet in association with suppliers G R Radhakrishnan, GRT Jewellers, Chennai

#Scenario 04

What if footfall is very low even by end of the year and sales are not enough to cover cost of operations?

People are in a state of shock and fear, their worries are justified, because it is a global pandemic. We all need to give it some time to recover. Every business faces ups and downs, businesses are equipped to mitigate such risks.

Those who have weddings scheduled will buy jewellery. Irrespective of the constraints they need to buy jewellery. If the price of gold is too high, they may prefer to buy silver with gold plating, or go in for lightweight pieces. But they will not do away with buying.

In India, buying gold is a tradition. In every celebration and festival, women adorn themselves with the choicest of gold ornaments. If in case, the footfall continues to be marginal and people shy away from coming to jewellery stores, jewellers will have to go out of their way to get customers to come to their stores. They can announce contests, participate actively in several social activities. There are several marketing techniques that jewellery retailers can employ to attract customers. It is a norm, that during festival season customers will flock to the stores. Because of the pandemic, some may choose to go digital, but sales will happen for sure.

In case, such a situation was to occur, jewellers could introduce creative marketing and branding campaigns, conduct small exhibitions in-house. Invite celebrities, to increase footfall. Participate in social events. And to meet expenses, they can monetise excess inventory to meet expenses and cut down on superfluous ones. A jeweller can always find solutions to raise cash.

• Jewellers will have to go out of their way to get customers to come to their stores in case of low footfall
• There are several marketing techniques that jewellery retailers can employ to attract customers
• Jewellers could introduce creative marketing and branding campaigns, conduct small exhibitions in-house.

Solution

Introduce creative marketing campaigns, small in-house exhibitions & more Hitesh Adeshra, Keshavji Chhaganlal Jewellers, Jamshedpur

#Scenario 05

What if there is a relapse and a Corona 2.0 afflicts the world?

Change is the only constant. So this phase has taught each one of us to be adaptable to change. Nothing will be forever. You need to plan your finances well and never rely overly on borrowings. Loans should be taken only if necessary.

Business owners have to reinvent and adapt to new ways of working. A health crisis can relapse, no one has control over such situations. All one can do is to be prepared for all kinds of challenging situations.

These adaptations begin small – first change your lifestyle, keep your health intact, take safety measures for your staff and customers. Adopt a healthy lifestyle and keep your business accounts healthy. Adopt austerity in life and in business. Avoid wasteful expenditure and learn to live with minimal means. Keep yourself happy and healthy at all times. These simple measures will help you in times of difficulty.

Good days will return, the economy will bounce back. It is a matter of time. Till then we all need to have patience and perseverance. You need to be polite and exercise compassion, in these difficult times. Each one is suffering, therefore we need to be more considerate and be kind.

• Business owners have to reinvent and adapt to new ways of working
• Adopt a healthy lifestyle and keep your business accounts healthy
• Loans should be taken only if necessary

Solution

Make your life and business healthy by adopting healthy ways of conducting life and business Vastupal Ranka, Ranka Jewellers, Pune

#Scenario 06

What if gold prices escalate beyond 90k for 10 gms by end of the year?

Buying gold is not confined to a class or segment, it is a tradition across all religions and social strata. The quality and quantity of jewellery buying may be different, but it will surely be there.

When gold prices increase, demand reduces. People may go in for silver or gold plated jewellery. They may go in for lightweight jewellery. Some may prefer studded jewellery, etc, because in such jewellery purity of gold is lower, about 14 carat – 18 carat. In all these cases also sale happens, and jewellers are able to book profits. They may be lower than expected.

Gold is a profitable investment. If there is a sudden hike in gold price, there will be some resistance from buyers. But if there is a gradual hike, buyers will accommodate it and will continue to buy gold.

Hike in gold prices, means people will buy light weight jewellery, so jewellers will have to keep such jewellery on display. Pieces, which look chunky, but are actually light in weight. They may also go in for rose gold, which actually has lesser pure gold and more of other metals. This will make it affordable for the buyer. Jewellers may have to ensure that they offer their clients, ample of choice within their budget – so the whole pure gold jewellery fundamental may shift to lower purity, yet shiny and chunky looking jewellery. It’s more of a style change.

• People may prefer studded jewellery, etc, because in such jewellery purity of gold    is lower
• Pieces, which look chunky, but are actually light in weight will be in demand
• Rose gold will also be populer

Solution

Change your inventory to suit client budget Sanjay Gupta, Tibarumals Jewellers, Hyderabad

#Scenario 07
What if manufacturing centers do not open in time – especially in Mumbai and Kolkata?

Gems and jewellery, unlike many other businesses has a unique supply chain, which depends on several issues ranging from quality, purity, weightage, style, et al. All of these factors will determine, from where individual retailers source their products.

Depending upon their location, market demand in their area and people’s preferences, their own individualistic styles, etc, they will seek out vendors and suppliers from different parts of the country. Some jewellers manufacture part of their inventory in-house, and source the rest from wholesalers located in Mumbai, Surat, Jaipur, Kolkata and several other places. Artisans from far off villages in Orissa, Bengal, Gujarat, Rajasthan, etc come to work for manufacturing units in these cities. Many live in shambles, away from their families and face several difficulties and yet employ their talent to manufacture some of the most exquisite jewellery, which is then shipped across India and finds its way into the collection of some topmost connoisseurs. Supply of gems and jewellery would not be so much of a concern, because demand too would be less.

Over the past few months, just before lockdown, several jewellery retailers have stocked up on their inventory – and because of the lockdown no sale has taken place. So we have ample of inventory at present, which will take care of the demand for a few months, at least.

If wholesalers continue to remain closed till the end of the year, and do not resume operations at all – it may be a cause for worry for all jewellery retailers, but when no one has a particular type of jewellery, buyers may have to choose from whatever stock is available.

More and more jewellers across the country will have to rely on their own artisans, and offer their clients customized jewellery, rather than ready-made pieces. As it is a nation-wide supply crunch – people will understand and therefore will mend their preferences.

• Supply of gems and jewellery would not be so much of a concern, because demand too would be less
• We have ample of inventory at present, which will take care of the demand for a few months
• More and more jewellers across the country will have to rely on their own artisans

Solution

Become self-reliant in manufacturing, offer clients customized jewellery Renu Sharma, Rajwarah Jewellers, Delhi

#Scenario 08
What if big shows get cancelled totally for the whole year?

Trade shows are important for retailers  from across the country, where we see newest styles and trends and meet new suppliers and vendors. We are able to network with industry veterans and gain a lot of insights from them. So cancellation of shows does create a serious dent in the learning curve. It is, important for retailers to find unique solutions to reach out to vendors, suppliers, and network with people over the internet. Virtual expos will be beneficial in such a scenario. Though nothing can beat, the experience of meeting people in person. All the same, with a pandemic of this magnitude, we aren’t left with a choice. I attend a lot of webinars, interact with many fellow jewellers over the internet through zoom sessions, web meetings and social media platforms as well. We also keep in touch constantly with all our suppliers and vendors, and clients as well. We share positive thoughts, place orders, if necessary – suppliers also share their newest catalogues with us and that way we try to overcome the loss caused because of cancellation of shows.

On the whole, gems and jewellery retailers are in control and seem to be prepared to meet all kinds of challenges. At present we can keep our fingers crossed, and hope that the situation improves and life springs back to normal without any more casualties.

• Virtual expos will be beneficial when real ones cannot happen
• Attend a lot of webinars, interact with many fellow jewellers over the internet
• Important for retailers to find unique solutions to reach out to vendor

Solution

Keep in touch with suppliers and vendors, and clients over Internet and social media Saket Keshri, Ratnalaya Jewellers, Patna