Jewellery retailers in India are re-evaluating their brick and mortar business model and implementing omni-channel approach with an enhanced digital strategy to boost sales, says a report.
The World Gold Council in a report titled 'Online gold market in India' said the COVID-19 disruption has caused jewellery retailers India to re-evaluate their existing business model and noted that online retail adoption accelerated during COVID-19 across categories.
"Though relatively nascent at 1-2 per cent, the online gold market in India is witnessing an enormous push from both digital players who see this as an opportunity and large jewellers who see this as a necessary supplement to their brick and mortar model," WGC Managing Director, India, Somasundaram PR said.
He further said, gold jewellery retailers need to improve the end-to-end jewellery purchase experience and establish the 'loyalty loop' with consumers.
The online gold market in India accounts for just 1-2 per cent of overall gold sales in terms of value and during the third quarter calendar year 2019, only 17 per cent of urban gold jewellery purchases and 3 per cent of rural gold jewellery purchases were made online, the report stated.
"Jewellery buying, on most occasions, is a well-planned, family decision involving months and years of savings, therefore, online experience has to reflect this long-term engagement and cannot sustain as simple transactional market-place," Somasundaram said.
He further noted that for retailers, creating a seamless experience integrating offline and online channels will be critical to attract more consumers and differentiate between online gold buying and buying a gold ETF (electronic traded fund).
The report further said that consumers between 18 to 45 years account for 70-80 per cent of online sales, while those over 45 years account for 20-30 per cent.
The average ticket size of online gold jewellery purchase is ₹25,000-30,000 and is purchased for daily wear (50 per cent) and festivals or gifting (50 per cent), the report said adding online sales of gold bars and coins are popular during auspicious festive days like Akshaya Tritiya and Dhanteras.
Some of the barriers for online gold sales that prevent potential buyers from completing online purchase include, desire to hold or touch the product, to have the product right away, returns policy worries, price concerns, lack of awareness and understanding about Internet Investment Gold (IIG) in India, the report said.