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The Retail Revolution 1st India Gold Conclave Chennai 19th July 2008

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Background of Indian jewellery Industry. Changes taking ... Big Bazaar. Giant. Subiksha. Metro. Bombay stores. Big Bazaar has already launched a gold section ... – PowerPoint PPT presentation

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Title: The Retail Revolution 1st India Gold Conclave Chennai 19th July 2008


1
The Retail Revolution 1st India Gold Conclave
Chennai19th July 2008
2
Flow of presentation
  • Background of Indian jewellery Industry
  • Changes taking place within the Industry
  • Coping with these Changes
  • Gazing at the Future
  • Future requirements for the Industry
  • Some example from Tanishq

3
How big is the jewelry market in India?
4
Background
  • The Indian jewellery Industry is one of the
    largest domestically (and in the world) and has
    some unique characteristics
  • Recent Changes in the Lifestyle goods industry
    and the diamond industry have created some
    opportunities and challenges
  • The family jeweler segment is the largest segment
    of the market and hence most likely to be
    impacted by these changes
  • If the industry needs to initiate changes at the
    firm or Industry level , the leaders need to
    agree on the challenges facing them and the
    strategies needed to cope with them

5
Indian Jewellery Industry
  • Market Size
  • Fourth largest consumer market in the world
  • Jewellery Market Size Rs75,000 crores
  • Diamond jewellery Rs10,000 crores
  • Largest market in terms of volume of gold
  • India accounts for more than 22 of the total
    gold used for jewellery purposes
  • Growth
  • Gold jewellery Market Growth 8-10
  • Diamond jewellery Market18-20

2006 data
6
Per Capita consumption
7
Whats Changed
  • Gold as a share of wallet is decreasing in the
    younger generation. Traditional jewellery is
    still the dominant design pattern while
    contemporary styles are emerging fast
  • Although guarantee of the retailer is important
    in ascertaining quality, hallmarking is gaining
    acceptance
  • In the past choice of stores used to be 1-2
    stores, but customers now look at 4-5 stores for
    range and choice of jewellery
  • The main occasions to buy are still marriage and
    festivals
  • Customers in the high value category are
    becoming more informed because of exposure to
    media and fashion trends

8
Organised retail making a dent
9
Fragemented Value Chain
Job workers
Gold
MMTC
Independent outlets
Intermediaries
Banks
A outlets Chains A category outlets
Direct Imports
Large Jewellery Manufacturers
Open Market
Whole sellers
Independent A,/A,someB Branded outlets
in Shopping malls
Diamonds
Mining companies
Sight Holders
10
Share of Organised retail in the market
Despite its large size jewellery retail is
unorganised and very fragmented
11
US Retail Scenario
12
Organised retail making a dent
13
Industry standards are set
  • Diamond Trading Company (DTC)
  • World Gold Council (WGC)
  • Platinum Guild International (PGI)

14
How they aid organised retail
  • Educating the customer about different kinds of
    precious metals, stones and jewellery as a whole
  • Creating Brand pull in customers
  • Promoting jewellery by increasing usage and
    appeal occasions
  • Putting a good vendor base to ensure continuous
    supply of products and better service for the
    customer
  • Positioning jewellery as a lifestyle product
    rather than a traditional product
  • Responsible for the emergence of a jewellery
    industry value chain

15
Value chain redefined
Merchandising Design
Manufacturing
Marketing
Retail
Unlike the traditional jewelers in the past who
had a single owner manager structure, clear
streams of specialization emerging in the
industry
16
Design Differentiation becoming the USP
  • Traditional industry relied on Karigar skills
  • Now, More emphasis laid on formal design training
    in jewelry category especially by the organized
    players
  • Design Training in NIFT, SNDT,GIA, JDTI
  • Players like Tanishq, Ganjam, TBZ have
    specialized Design Studios which have won laurels
    at international forums as well

17
Manufacturing
  • Hallmarking - Standardization in Material quality
    is fast becoming a pre requisite especially for
    Gold jewelry
  • In case of diamonds, Increased awareness of
    diamond quality ( 4 Cs)
  • Special EOU in hubs like Mumbai (SEEPZ) which
    supply to stores across the world but face stiff
    competition from Hong Kong and China
  • Platinum has few manufacturers in the country in
    comparison to Gold and Diamonds

18
Marketing
  • Creating Newer opportunities to buy jewelry
  • Festivals like Akshay Tritiya, Occasions
    like Mothers Day, RakshaBandhan, Valentines Day
    etc
  • Fashion campaigns in vogue- Tanishqs
    Fashion Earrings, Colors of royalty
  • Creating a desire in the Indian Woman to buy
    jewelry for its design value/for accesorisation/
    to make a statement about her personality.

19
RETAIL
  • Retail
  • Seduce the consumer in the retail space as
    competition is not only within jewelry category
    but categories like electronics, wellness
    services and luxury items
  • Evolve a distinct retail identity in terms of
    product, store look and customer experience
  • Trend of the speciality Jewellery markets/ malls
  • Increasing traditional players renovating/refurbis
    hing store spaces
  • Concept of strong retail brand in jewellery
    industry gaining strength

20
What else is changing?
  • Disposable income rising faster as the economy is
    growing
  • Rs One Crore Per Anum Income households among
    the fastest growing population segment in the
    country
  • This Trend also visible further down the pyramid

21
Mapping of Indias Income classes
22
Projected Growth
Indian jewellery market is expected to grow at
an overall rate of 8
23
Entry of strong players into the jewellery
industry
  • Reliance
  • Big Bazaar
  • Giant
  • Subiksha
  • Metro
  • Bombay stores

Big Bazaar has already launched a gold
section Departmental stores like Shoppers Stop
have jewellery outlets
24
New Channels of Distribution
  • Direct selling
  • Modicare launching jewellery sales
  • Pantaloon acquiring a 10 stake in Goldiam
  • E-retailing
  • Fabmall/Gold Palace starting e-retailing of
    jewellery

25
Transition
Different stages-Different strategies
  • Strategies
  • Jewellery is used
  • as a status symbol
  • Jewelelry has little
  • differentiation and
  • adopt a me to
  • strategy
  • Local partnerships
  • are important to
  • succeed
  • Risks
  • Loss of customer
  • trust
  • Low customer
  • protection
  • Strategies
  • Cost cutting measures
  • adopted by most
  • jewellers
  • Management of the
  • distribution chain
  • Alliances
  • Risks
  • Industry Restructuring
  • Loss of customer trust

Market maturity
Mature
Consolidated
Fragmented
Time
  • Risks
  • Unclear market
  • segmentation
  • Unclear offering
  • Loss of customer
  • trust
  • Strategies
  • Creation of a
  • local brand
  • Use of
  • innovative
  • distribution
  • channels
  • Local alliances

26
Lessons to learn from apparel
  • Traditionally dominated by small
  • and family run stores
  • Strictly made to order
  • Fashion element and design
  • content minimal
  • Fact Files
  • Second largest organized
  • sector in the country
  • Total Apparel industry
  • worth Rs 1000 billion with
  • readymade garments
  • worth 300 billion
  • Export of Readymade
  • apparel constitute 46 of total
  • Percentage of apparels
  • sold through single large
  • format stores is 44
  • India viewed as a hot
  • destination for global
  • retailers
  • Emergence of big brands and retail
  • outlets, tremendous competition
  • Increasing preference for ready-made
  • garments, with rise in urbanization
  • Increasing importance of Fashion, style
  • and brand management

27
  • The rapid growth of the organized retail market
    was unforeseen in the apparel space, and this is
    predicted to continue growing the market as a
    whole
  • An industry that believed that individual
    customization that a family tailor offered was
    irreplaceable, found customers increasingly
    amenable to picking up off the shelf
    alternatives, now available in a wide range of
    design and size
  • Primarily driven by people who found they had a
    lucrative domestic market when fighting pitched
    battles in the export market

28
What do we need ?Expertise to be developed in..
29
What do we need?Expertise to be developed in..
30
Therefore
  • As the retail boom has arrived in the country,
    jewelry industry cannot ignore it.
  • Will have to take giant steps so that can meet
    customer expectations and offer value to the
    customer which is higher than the material cost
    they pay for
  • Separation of the ownership from the management
    in the jewelry industry
  • Need for more specialized people in each of the
    above mentioned fields
  • Immense opportunities for young professionals
    from varying fields

31
The Tanishq Story
Building a successful retail brand
32
  • Retail has traditionally been regarded as a sales
    and distribution channel
  • Brands - in FMCG, durables, fashion categories
    like to dwell on their extensive retail
    distribution reach
  • But, truly speaking, retail can impact the minds
    and hearts of customers as strongly as it can
    reach the vicinity of their homes
  • Because retail can make the magic of brands come
    alive, in an environment that consumers can
    experience, feel and touch
  • Retail can deliver the brand value proposition to
    consumers in a compelling yet cost-effective
    manner

33
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34
Products need to tell a story- Retail Showcase
  • Retail space can showcase product far more
    brilliantly than advertising ever can
  • sexy product displays, which completely mesh with
    brand personality
  • Attractive store windows
  • the alluring play of colour and lights
  • key product features can be emphasized, often
    dramatically
  • relatively long consumer attention span

35
BRAND is what the customer sees
  • Retail space is uniquely positioned to surround
    the customers senses with multiple facets of the
    brands personality
  • Can deliver visual, audio and olfactory cues
  • in-store visual merchandising
  • music that brings alive the moods of the brand
  • online audiovisuals that inform, excite
    stimulate
  • in many cases, even the fragrances and smells
    that define the brand and draw the consumer

36
Communication with the customer
  • Unlike most advertising, retail space permits an
    interactive process of communication about brand
  • - An effective salesperson can communicate brand
    in a clear, compelling, customized manner
  • - Catalogs, take-one leaflets, online dialogue
    counters in the store can further enhance this
    process of speaking to the customer about key
    brand benefits
  • - Within the retail space, the customer is
    captive audience as he listens to you and
    experiences your brand

37
Captivate
  • The first three Ss (showcasing, surround effect
    and speaking effectively) make the captivating
    magic of the brand come alive
  • This is truly the moment of truth for every
    retail brand the point of seduction, leading to
    consumer choice purchase
  • Magic, by its very nature, cannot be captured in
    words but we see it in our showrooms, 365 days
    a year

38
Unanimity in the story- Paheli
  • Communicate to create brand association and
    generate interest
  • TVC
  • Print and Magazine
  • Instore
  • Outdoor

39
BRAND PROPOSITION- NEW TALES OF TRADITION
  • Communicating your brand values and your unique
    proposition to the customer.
  • Synergy between your products, store,advertising.

40
CHALLENGE NORMS
  • Challenge existing norms and wake customers
  • Taking a strong stance in our campaigns
  • Education into why customers should buy into
    organised retail.

41
Own an Activity- Anmol Saheli
  • Seeing ourselves as a complete wedding jeweller
    was one proposition but communicating the same to
    the right TG another task.
  • Anmol Saheli- Emotional Bonds talked about rather
    than hardselling jewellery.
  • Hit the right cord with the right TG and
    overnight walkins grew and sales as a factor of
    this.

42
The best way to predict our future is to invent
it
- Alan Kay
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