On an average, Tanishq has undertaken 15-25% reduction in weight on jewellery pieces, including bangles, jewellery sets, rings, earnings etc set in 22 karat gold
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NEW DELHI :
Tanishq, India’s largest jewellery retailer, will convert at least 50% of its gold jewellery in-stores into “lightweight" pieces over the next 12 months, giving shoppers an option to spend less per piece as India sees a unusual spike in prices of the precious metal.
“This was necessitated because of the sharp rise in gold and customers actually feeling the pinch. We were also sensitive to the fact that we don't know how the pandemic will play out. So we wanted to make lightweight a big mantra in our system," Ajoy Chawla, CEO, jewellery division, Titan Company, said in an interview.
The jewellery pieces, internally tagged as Hi-Lites, were rolled out across the retailer’s 368 stores in the December quarter after a team of 40 people spent six months re-engineering and designing pieces to lower the grammage.
In all, 3,500 pieces, only gold, not studded jewellery, have been “light-weighted" in what is the most extensive exercise undertaken by the company to counter higher gold prices and safeguard consumer demand.
On an average, Tanishq has undertaken 15-25% reduction in weight on jewellery pieces, including bangles, jewellery sets, rings, earnings etc set in 22 karat gold.
Price of the yellow metal has jumped significantly since the early days of the pandemic, moving up to ₹46,650 as on 13 January 2022 from ₹38,070 per 10 grams for 22 carats on 1 January 2020.
“With gold prices having gone up significantly over the last couple of years—over two years it's a 20%+ kind of a swing—we heard a lot of customers come back and tell us that their budget can't stretch so much but they’d like to own a certain product and design," Chawla said.
The 3,500 pieces that have been redesigned as part of this exercise, together made for 30% of gold inventory at Tanishq stores in the December quarter. In the December quarter, sale from such pieces contributed close to 26% of the total jewellery business.
The company used different ways to create light weight jewellery. It included design re-construction and technology, that is, the way it manufactures. "Some of the products are machine made, so we did some changes in the way we are looking at manufacturing them so they use lesser gold. And third, we looked at some material innovation. We came out with a patented material, a hard alloy, which makes the same 22 karat gold harde, so people still get 22 carat but we can use lesser of the material to give the same dimension and stability," Chawla said.
He added the move is helping Tanishq convert more walk-ins to shoppers.
“We are expecting to serve at least a million customers in the next 12 months on the back of this initiative," he said.
Inflationary pressure has prompted consumers to look for what's affordable, said market watchers.
“Also, consumers want options for daily wear. In the last 2-3 years, gold prices have almost doubled which makes it very high for large sections of consumers," said Abneesh Roy, executive vice president, Institutional Equities at Edelweiss Securities.
This kind of pricing and product will also work well especially on e-commerce, he added.
In the December quarter, the company that also retails watches and perfumes, witnessed strong demand across its consumer businesses clocking 36% growth over the festive quarter last year, the company said in a quarterly update to the exchanges on 6 January.
“Buoyancy in jewellery demand driven by festive purchases in October and November helped the division achieve significant revenue uplift for the quarter," it said.
Both walk-ins and customer conversions were significantly higher compared to last year. New buyer growth was higher than total buyer growth, driven partly by Tanishq's regionalisation strategy of winning in focus markets. While ticket sizes were stable, they were 15% higher than pre-pandemic levels, the company added.
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