In Modern India, consumers browse online websites / mobile apps pre-purchase and use online blogs and social media for ideas and inspiration. Wallets and Digital Payment Gateways are playing a key role in the growth of Internet Investment Gold. COVID-19 has caused retailers in India to re-evaluate their brick and mortar business model and implement an enhanced digital strategy.
Today, successful retailers embrace an omni-channel strategy to boost online sales. The online gold market is still in its nascent stage in India, digital and social activity plays a key role in the purchase journey. There is a real opportunity for growth in India’s online gold market if it can improve the end-to-end gold jewellery purchase journey and thus establish the ‘loyalty loop’. To drive market growth post COVID-19 the industry needs digital strategies that will ensure gold jewellery reaches more consumers at the consideration stage of their purchase journey… and reaches them more often.
The outbreak of COVID-19 and consequent closure of stores from mid-March caused jewellery sales to collapse. COVID-19 has forced jewellery retailers to reconsider their brick and mortar business model and implement digital as a core strategy. India’s top retailer, Titan, recorded a 74% decline in retail sales in the period 16 to 31 March compared to a growth of 12% in the period 1 January to 15 March.13 With stores closed, retailers such as Titan, Senco Gold and Diamonds and Kalyan Jewellers rolled out various incentives and offers in April, such as providing opportunities to lock in prices, discounts on the gold rate, gold ownership certificates or gold vouchers, and exchange of gold coins for jewellery via their e-commerce websites during Akshaya Tritiya. Even so, online sales volumes were nowhere near the same period in 2019. This focus on digital will be key to successful growth post COVID-19, but more importantly the seamless integration of offline and online channels will play a crucial role in driving sales. Titan has devised a six-pillar strategy to boost sales, and this includes implementing an omni-channel through which various initiatives, such as video call, [email protected], Augmented Reality/Virtual Reality and Endless Aisle, have already been launched. 14 Similarly, other retailers are using digital media to reach out to customers post COVID-19. They are focusing on improving the customer experience through personalised services, such as store visits by appointments made online (via app, WhatsApp or email) and product selection via video. Retailers are enhancing this focus on omni-channel with lower price points and product lines designed to boost online sales. Online gold jewellers such as Candere and Bullion jewellers of GOld Coins and Silver Bars such as CoinBazaar , are embracing technology and innovation to boost online sales post COVID-19. They are using customer relationship management (CRM) software, Salesforce, and data analytics tools (Google Script, Google Tag Manager) to help understand consumer behaviour and achieve higher retention and conversion through their e-commerce website.
Despite online gold sales growth and an increasing desire among certain sections of the population to access gold through online channels, digital accounts form a relatively small proportion of total sales. Barriers that prevent potential buyers from completing the online purchase journey include:
• desire to hold/touch the product
• desire to have the product right away
• returns policy worries
• price concerns
• lack of awareness and understanding about IIG Online gold retailers are aware of these barriers.
The desire to hold/touch the item pre-purchase can be overcome if retailers offer the option to buy online, collect in-store and exchange/return if the product is not as expected. Online retailers such as CarataLane and Candere already do this for consumers using their omni-channel strategy: consumers purchase online and collect the piece at a physical store. The concern around refund/replacement is addressed by e-tailers such as Amazon and Flipkart who have a 30-day refund/replacement policy. To provide transparency into online pricing, Amazon provides a breakdown of the gold price by fine gold content, making charges and taxes. Internet Investment Gold allows investors to purchase physical bar and coin online with storage in vaults. Awareness of IIG will help the category to grow, and the participation of banks would further bolster the market. Online gold platforms are trying to enhance the shopping experience through digital innovation, technology and personalised service. CaratLane, Bluestone and Candere have introduced a ‘try-at-home’ feature where consumers can book an appointment to try jewellery pieces at home/work with no obligation to purchase. CoinBazaar has introduced an exclusive option to buy in digital gold but redeem in Platinum Bars, Gold Coins or Silver Bars as per choice of customer from amongst widest range of Brands available on their website.
Combiation of Physical and Digital Gold is what looks a challenging proposition in India right now. The traditional mindset of Indian for Touch & Feel along with Gifting on Various Occassions backed by Modern mindset to Invest for Capital Appreciation and hedge against Inflation in GOLD leaves a gap where PHYGITAL comes in. Companies focused on this will surely go a long way in building the future of India towards a phygital gold economy.
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