Jewellery | Luxury Goods
I) Challenges faced by the Jewellery Retail Industry
Online sales of jewellery constitute a growing size of the market share, although there is variation across regions, types and brands of jewellery. While customers prefer to touch and feel the merchandise at brick and mortar stores, online sales will predominate the affordable branded jewellery. Jewellery retailers also need to use digital platforms for conveying data, shaping the identity of the brand and building customer relationships. With more customers carrying out online research, one to two-thirds say they turn to social media for advice and information. Offline landscapes are also growing. Monobrand stores are gaining ground while multi-brand boutiques are also coming up. In 1990, for example, there were 2 Swaroswki boutiques, now there are over 900+. Pandora quadrupled the size of stores in a span of 4 years from 2009 to 2012. Focusing on omni-channel reach offers jewellery retailers a greater control over the customer connect and higher margin potentials. Multibrand boutique chains offer carefully curated assortment of brands and products, along with a unique shopping experience. To achieve sufficient margins, concepts are needed to operate on a global scale through Omnichannel approach.
b) Changing Patterns of Consumption
The jewellery industry is also noting hybrid consumption. Some parts of the world see more people trading what is considered to be a standard one-carat diamond engagement ring to three or even 4 carats. Premium brands are attracting people with huge disposable incomes, as jewellery retailers are engaging in price wars.
The boundaries between fine jewellery and fashion jewellery are also blurring. Fine jewellery was once viewed as a gift purchase, but consumers are now increasingly pampering themselves. Fine jewellery is also available at bargain prices. In contrast, brands such as Lanvin sell fashion jewellery for 1000s of Euros. So, segments are set to be defined by brand positioning and price points. New product lines require SOP for jewellery business. In fact, SOP for the diamond manufacturing industry is a big requirement these days, for this reason. Jewellery brands are also communicating their messages through in-store experiences, customer service and advertising.
c) New Fashion Trends
Fast fashion is especially important for the fashion jewellery market. H&M, as part of its guest designer collaborations, introducing designer jewellery and accessories collections. In a world of rapidly-evolving fashion trends, flexible companies with adaptive business systems reap rewards. Innovative jewellery players emulate fast fashion, reacting to trends and adjusting their product-development cycle times accordingly. To facilitate closer collaboration with partners along the entire value chain, from suppliers to designers and logistics providers, brands are looking for a retail jewellery business consultant that understands their business.
d) Need for Well-Defined Processes
Jewellery businesses have been associated with traditional family-run operations. So, for brands that value growth, the whole idea is they require a jewellery consultant to “expand our business.” Lack of SOPs (Standard Operating Procedures) are the biggest challenge. For processes that are not well-defined, brand expansion becomes hard to achieve.
e) Personnel Selection, Recruitment & Training
Another challenge every jewellery retail brand faces is personnel training and recruitment. Staff are a valuable asset for any organization, and must be trained so skillsets are honed and they are oriented in an effective way.
f) Imparting Product Knowledge
Imparting product knowledge and domain expertise to staff is essential. Domestic brands are getting outpaced by international brands. Building or expanding the global presence has become mission-critical. Diamond business consulting or looking for consulting for retail businesses can be a solution to the challenge of expansion. Top brands capture a small percentage of local markets still. For domestic players, there is an undeniable advantage in hiring a skilled retail process consultant. Given the amount of competition, brands urgently need consultancy for retail jewellers.
g) Acquiring Skilled, Quality Workers
Acquiring skilled and quality workers with an eye for detailing is important. The parameters must be in place to assess the performance and upgrade skills accordingly.
h) Developing Accurate, Effective Systems
Developing accurate and effective systems for all departments, right from sale to purchase, accounts, marketing etc are required for a 360 degree view for expansion. YRC experts have implemented Business Process Management (BPM) solutions which helps to gain better control on your daily operation. Implementing BPM for shapingy and building customer relationships has become a basic necessity, and achieveing process automation is not an overnight process. To get to the point where you can expand your jewellery retail store, or grow your business in international markets, you need a jewellery business consultant you can rely on.
II) How YRC Can Help?
YRC Management Consulting helps in developing SOPs for the complete organization, right from the front to the back office, offering better control over sales and operations. If you are looking for jewellery business consulting services that can help your business to thrive, trust YRC with omnichannel solutions for online & offline jewelery brands to expand & sustain business growth momentum.
III) About Jewellery Retail Industry
Investment in jewellery and gold is considered the safest and best option globally, especially in India, Sri Lanka, Nepal and many other Asian countries. The jewellery and gems industries are steadily expanding as more people are becoming enraptured by the solid returns on investment jewellery retail products represent. During festivals and the wedding season, jewellers are thriving in across the world. Banking on goodwill and creating a legacy culture sets the jewellery retail business apart from others. Annual global sales of EUR 148 billion are expected to grow at 5 to 6 percent each year, totaling EUR 250 billion by 2021, according to McKinsey. The jewellery industry is set to outshine every other economic sector. The ten biggest jewellery groups capture a mere 12% of the international market and only two of these, Cartier and Tiffany & Co, are ranking the top 100 global brands. National or regional jewellery brands are set to join top international brands by 2021. Industry experts project that the 10 largest jewellery houses will double market share by 2021. Average deal value in the jewellery industry has also been rising. The focus is on branded jewellery which accounts for a king’s share of the market. McKinsey estimates branded segments will constitute 30-40 percent of the market in 2021. Whether it is new money consumers, emerging market consumers or young consumers turning to brands for self expression and realization, branded jewellery retailers are making the most of the opportunity. Jewellery retailers need to strengthen and differentiate brands through distinctive and unique designs.
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