Gold & Silver

Online discounts fail to boost digital gold sales

Suresh P Iyengar Mumbai | Updated on July 16, 2020 Published on July 16, 2020

However, a good beginning has been made: WGC report

 

The huge discounts and innovative digital strategies adopted by leading jewellers have failed to boost online sales during the Covid lockdown.

The outbreak of Covid and consequent closure of stores from mid-March caused jewellery sales to collapse. Titan recorded a 74 per cent decline in retail sales between March 16 and March 31 against a growth of 12 per cent logged between January 1 and March 15.

With stores closed, retailers such as Titan, Senco Gold and Diamonds and Kalyan Jewellers rolled out various incentives and offers in April, such as providing opportunities to lock in prices, discounts on the gold rate, gold vouchers and exchange of gold coins for jewellery via their websites during Akshaya Tritiya, said a World Gold Council report ‘Online gold market in India’.

Sales volume low

Despite the best efforts, online sales volumes were nowhere near the same period last year. Covid has forced jewellery retailers to reconsider their brick-and-mortar business model and implement digital as a core strategy.

Last year, the industry sold 4-5 tonnes, equivalent to just 3 per cent of annual gold retail investment with an estimated 2.5 million active investors with repeat transactions.

 

The seamless integration of offline and online channels, besides establishing the ‘loyalty loop’ will play a crucial role in driving online sale of gold jewellery post-Covid, said the report.

Somasundaram PR, Managing Director, India, World Gold Council, said though relatively nascent at 1-2 per cent, online gold market in India is witnessing an enormous push from digital players who see this as an opportunity and for large jewellers it was necessary supplement to their brick-and-mortar model, he said.

Online gold retailers are trying to overcome the desire of customers to hold and touch the jewellery before the purchase with an option to buy online, collect in-store and exchange/return if the product is not as expected.

The concern around refund and replacement is addressed by e-tailers such as Amazon and Flipkart through a 30-day replacement policy.

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Published on July 16, 2020
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