Ever wonder why the established jewellery retailers in India, who have enjoyed immense success offline, struggle to replicate that success in the online realm? On the other hand, online-first jewellers can rapidly scale their online business within a short period.
One of the key differentiating factors is their ability to build trust in the mind of the customer for buying jewellery online. Trust is important in any business. Trust is more important in the jewellery business. Trust is even more important in the online jewellery business. We will discuss the reason shortly.
This article analyzes the various types of jewellery retailers in India and their respective share of the online jewellery market. It further provides insight into the fundamental reasons why online-first jewellers are able to quickly win the trust of online buyers.
Current State of Online Jewellery Business in India
In 2022-23, online jewellery retail was estimated at 2.3% of the overall jewellery market in India. In contrast, online retail was estimated at 7.5% of the overall retail market in India.
The low penetration of online jewellery retail can be attributed to multiple factors, the most important being the difficulty of establishing trust in the minds of the customers for buying jewellery online.
The below chart provides a bifurcation of the online jewellery sales in India in 2022-23 by various types of jewellers.
Online first jewellers who are relatively new to the market and control just 2% of the overall jewellery market in India, dominated the online jewellery market with a 52.2% share.
National and regional jewellery retailers with established brand names and a 34% share of overall jewellery retail accounted for a 31.2% share of the online jewellery market in India.
Medium-sized jewellery retailers with 27% of overall jewellery retail in India, accounted for an 11.9% share of the online jewellery market in India.
Lastly, stand-alone jewellery retailers with 36% of overall jewellery retail in India, accounted for only 4.7% of the online jewellery market in India.
Before we understand how online-first jewellers are able to win the trust of online buyers, let us first understand the importance of trust in building an online jewellery business.
Why trust is important in any business?
Trust is the key to success in any business. People buy from brands they trust.
“If people like you, they’ll listen to you. But if they trust you, they’ll do business with you.” – Zig Ziglar
Why trust is more important in the jewellery business?
Below are a few reasons why jewellery purchase requires a relatively higher level of trust.
Unorganized and unbranded market:
The Indian jewellery market is still a largely unorganized and unbranded market, where the quality of jewellery, pricing, and policies are not standardized and differ across jewellers.
Handmade product
Indian jewellery is predominantly handmade, which makes each piece of jewellery unique (unlike other standardized categories such as electronics)
High-value product
Precious jewellery accounted for 85% of the overall jewellery market in India in 2022-23. The average order value of precious jewellery retailers in India is usually in the range of Rs. 50,000 to Rs. 1 Lakh
The higher the price of a product, the higher the risk, and hence the higher level of trust is required for purchase.
Why trust is even more important in the online jewellery business?
Below are the factors why online jewellery purchase requires an even higher level of trust.
No touch and feel
In the case of online jewellery, the risk is even higher as customers find it difficult to check the fit, comfort, and appearance of jewellery without physically trying the product.
Pay first and wait for delivery
In online retail, customers have to pay first and then wait for the product to arrive, unlike physical retail where they can get instant delivery of the product.
Plenty of options
With so many online options available to consumers, it is essential to establish credibility and reliability.
Hence trust is the most critical element of success for an online jewellery business.
How online-first jewellers are able to win trust of online buyers?
Online-first jewellers are able to successfully address the three prerequisites of ecommerce success (mindset, skillset, and technology), and hence can quickly win the trust of online buyers.
The below chart shows a comparison between traditional offline jewellers and online-first jewellers across the three primary success factors.
Top tips for building trust in your online jewellery business
Besides the above 3 fundamental aspects, there are several tactics that jewellers can use to build online trust. The below chart lists the various tips Jewellers can use to build trust across the online customer journey.
Conclusion
Trust is built when a business consistently delivers on its promises to the customers. Consistency comes from focus and commitment.
Traditional jewellers need to make a fundamental shift in their mindset, skillset, and their ability to leverage the power of technology if they want to tap into the online opportunity. Those who can successfully navigate this transition are likely to thrive in both offline and online realms, thereby creating a seamless and rewarding experience for their customers.
Note: This article was exclusively written for The Retail Jeweller Magazine.
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Growth Consultant: Omnichannel Jewellery Retail
Helping Jewellers build scalable & profitable omnichannel brands.