7 01 2014
Traditional retailing needs to adapt modern retail concepts for survival
“For the small or traditional retailers to survive in the highly competitive times, they need to amend their ways of functioning. They need to incorporate strict quality control measures, provide 100 percent hallmarked jewellery, innovate deigns, and be updated with the latest market trends and market pulse. They should also start adding branded jewellery to their collection as it will make a lot of difference to the approach that consumers adapt towards them,” opines Shailesh Ranka, Director of Ranka Jewellers Pvt. Ltd., Pune.
Like Ranka many jewellers believe that brand stores will take a lot of time to penetrate into the rural markets, and while majority of the customers in rural and sub-urban sectors go to the small retailers due to the trust factor, they will continue to survive. However, Pratap Kamath, Partner, Ahharan Jewellers, Bangalore has a different take on the same. According to him small jewellers are likely to face stiffer competition from their larger counterparts and their trade will fade away with time. “May be in the next 5 to 10 years. Professional organizations are making their steady way into the rural and sub urban markets and as such small retailers are finding it very difficult to compete with them,” he said.
Like the two sides of the same coin, both traditional and modern jewellery retailing has its own pros and corns. While brand stores offer good customer service and store presentation, traditional jewellers enjoy the loyalty of their clients based on trust factor, bargaining and credit facility.
Price tags at branded stores are fixed, therefore when consumers step in to shop they end up paying the price listed on the product. As such there is no scope for a customer to bargain. However, there is a difference when customers go the jewellers whom they are well acquainted with. A little bit of negotiation on the overhead expenses leaves them happy and satisfied.
Some jewellers believe that that it is mostly the IT group, with a high level of disposable income, from the younger generation that goes to branded stores to shop, whereas other youngsters are calculative and still prefer to go to small retailers owing to their expenses and allowances, thereby giving small retailers yet another chance to survive in this competitive era.
But others deem that the younger generation doesn’t look at its from an emotional point of view. They prefer a professional treatments while shopping for jewellery and are more brand conscious and opt to shop at branded stores . Despite all arguments that favour and are critical of both traditional and modern retailing, the most important question left unanswered is “Are the common masses ready for a change to accept the concept of modern retailing as part of their daily life?” Putting an end to this speculation, Raghav Sahni, owner of Diamond Tree, New Delhi said, “Yes, the common masses are ready to accept the format of modern jewellery retailing in India. The only concern is that their pocket allowances are not as good. However, brand stores will take a lot of time to capture the market share from small retailers.”
According to Sahni jewellery at a branded store may cost high but it is definitely worth the money. “Products sold at any branded store come with a guarantee and this claim of the retailers can be challenged in the court of law,” he said and added, “Branded stores charge more for their products due to higher overhead expenses and also because there is less competition. The only disadvantage is that there is little product variety available in a particular price range at these stores while traditional jewellers offer an assortment of products in the price range demanded by the customers.” An innovative idea is a driving force to ensure success to brand stores and if the traditional jewellers want to survive they need to come up with equally novel business strategies to maintain their clientele and add a good number of new customers.