The Essence of Jewellery and Challenge for Jewellery Brands in the ME
The demand for jewellery is driven by a multitude of reasons or aspirations. Sometimes high levels of disposable incomes lead people to think beyond their basic needs and make them aspire for luxury like jewellery. In countries like India and China, gold jewellery has deep-rooted cultural and traditional significance. In India, bridal jewellery for weddings accounts for a lion’s share of market demand. Gold also attracts demand as a safe source of investment. Coming to the Middle East, fine jewellery is often considered as a reflection of deeply held cultural and traditional values like blessings, fortune, appreciation, affection, and associations. So, in the backdrop of such rich cultural connotations associated with jewellery, striking the right notes is never easy for retail jewellery brands and businesses in the Middle East, especially the ones coming from other parts of the world. The prior presence of expert and experienced local and domestic brands makes things more difficult.
As highlighted above, the jewellery content and design preferences of customers are strongly governed by the cultural and traditional values and norms of the land. If the local needs and aspirations are not taken into account, fit-for-all value propositions are going to fall short. This is where the concept of hyper-localisation comes into the picture. Hyper-localisation is an adjustment strategy following which businesses seek to align with a regional or locality-based market environment. It helps them curate their value propositions to meet the demands and prerogatives of a specific, geographic market. Hyperlocal retailing dodges the barriers of traditional localisation by focusing on regions, cities, neighbourhoods, and sometimes even individual stores.
One of India’s leading fine jewellery brands, Kalyan Jewellers, is often hailed as a role model in mastering the art of hyper-local retailing. The company has a network of over 150 showrooms spread across India and the Middle East. The brand’s wide and strong presence in a culturally and traditionally rich and diverse country as India speaks volumes of its success with hyper-localisation.
Going further, this blog explains the importance of hyper-localisation for retail jewellery brands and businesses with an emphasis on the Middle East market.
Importance of Hyper-Localisation for Retail Jewellery Brands
Seven grounds of the importance of hyper-localisation for retail jewellery brands and businesses in establishing local distinctiveness to impress local customers are discussed ahead in this blog.
Localised Brand Resonance
For a new retail brand, especially in a new market, impressing customers and creating footfall and conversions are some of the main challenges. This is the point where the planning and strategies of a new business get a reality check. Competitors responding back with adjustments make it more difficult for new players. For example, price discounts brought by a new player will be swiftly countered by its direct competitors with appropriate changes in their pricing. In large parts of the Middle East, the competition in the retail jewellery sector is already intense. In the face of such competition, re-directing consumer behaviour to draw them to a new store is even more difficult. This is where the hyperlocal retail strategy chips in. It cannot be a countermeasure but a strategy infused in business modelling and business planning from the early stages. Pressing early on hyper-localisation aids retail businesses in discovering in advance market opportunities for resonating with local customers in local markets as a local brand in more profound ways. This is where brand resonance is created. Jewellery brands like Aurore Ezzedine, Yessayan Jewelry, Damas Jewellery, and L’azurde (to name a few) enjoy significant brand resonance with customers across the Middle East. For new brands, the lesson here is that the stronger the localised brand resonance is higher the possibility of impressing customers in a quick span of time. The overall brand resonance also has a bearing on the elements of in-store experience and store layout planning.
Hyperlocal Merchandising
As the choice of jewellery is heavily influenced by local culture and tradition, retail jewellery businesses must reflect the same in their offerings. Not doing so reflects inadequacies in comprehending local market demand and hyper-local consumer behaviour. Jewellers must also keep a tab on the existing and changing micro and macro preferences of local customers especially when it comes to design portfolios and inspirations. Offerings that resonate with customers in a consistent manner give them a good reason to keep returning to a brand. Why would customers go to a jeweller that cannot offer products that could reflect their taste in fashion or meet the traditional requirements or any design sophistication? The names of the factor buckets remain the same; it is their content that varies which is why localisation is important. Merchandising is also influenced by new offerings in the market by other players, subtle changes in fashion trends, variations in the prices of stones and metals, etc. The point of localised merchandising in the jewellery business is to ensure that the final product meets the specifications of local customers in terms of quality and authenticity, design flexibilities, use of preferred stones and input materials, and craftsmanship. Retailers need to also stay consistently updated on local jewellery trends.
Hyperlocal Advertising and Promotions
The significance of hyper-localisation also applies to advertising and promotional efforts. The fundamental idea behind carrying out advertising and promotional campaigns is to attract and influence the behaviour of one or more customer segments. Hyper-localisation demands that these campaigns are designed and delivered to impress local customers in local markets. Instead of adopting a generic approach, hyperlocal promotions create the scope of establishing an instantaneous and more profound connection with local customers. Besides, targeting specific audiences with fit-for-all promotional campaigns is always a challenging task. For example, many popular celebrities from the Middle East and MENA region are seen on social media showing their appreciation for the craft of many jewellery brands in the Middle East like Damas Jewellery, Aurore Ezzedine, L’azurde, Yessayan Jewelry and others. This is one known way to resonate with local audiences. In hyperlocal advertising and promotion, things may go even further by considering celebrities with more specific local impact for the purpose of brand endorsement.
Another advantage of hyperlocal retailing is that it is easier to comprehend and define target segments and markets with higher detailing as the emphasis is on a small base of customers within a small geography. This allows the crafting of sharper advertising and promotional strategies.
Localised Personalisation
Just the way hyperlocal retailing provides extra effectiveness to advertising and promotional campaigns, it also helps retail jewellery businesses and brands improve the performance of their personalisation campaigns as well. The irony with most personalisation attempts is that they end up becoming so generalised that customers no longer feel it is something curated for them. Knowing that bots and programs are communicating with them could also be another reason. However, the bigger reason is the unavailability of sufficient and relevant data combined with large-scale imperfections in predictive analysis. Online or offline, without meaningful data and insights, it is difficult to draw any reliable connection between past behaviour and future actions in terms of response to efforts of personalisation.
The leverage of hyper-localisation is its reduced scope of market research which is confined to smaller regions, localities, or even neighbourhoods. This permits a more comprehensive analysis of consumer behaviour and market elements. Good business acumen and judgement supported by relevant data and analytics leads to better assessment of behavioural patterns aiding the efforts of personalisation in retail and eCommerce. In addition to bespoke offerings, one of the classic options for personalisation in jewellery is engraving of signs and symbols or name initials.
Operations Optimisation
Hyperlocal retailing is not confined to marketing and it is applicable to other business functions like operations, staffing, administration, and finance as well. The crux of hyper-local retailing lies in aligning a business with its immediate local market environment. Once the requirements of hyper-local alignment are comprehended and established at the enterprise level, it sets the platform to identify adjustments required in the business processes of all concerned business functions. This creates the possibility of enhancing operational efficiency by reducing or eliminating waste and redundancies from business processes and operations. Retail store SOPs play a significant role in achieving these objectives. For example, demand for gold-based jewellery can vary based on specific values. This can affect the purchase and inventory-related decisions of jewellery brands and businesses. Taking the bigger picture into account, hyper-localisation helps retail jewellery brands align their operational systems to the needs and requirements of local markets.
Brand Loyalty
Hyper-localisation helps build and sustain brand loyalty in the long run. Fundamentals and strategies of hyper-localisation when followed and maintained consistently over time create something beautiful which is consistency in the delivery of values that are relevant to local customers. The recurrences of positive experiences help customers decide if they should return to a brand or not. Consistency in value propositions offered and how these values are delivered including the subjective experiences help customers make this decision. This is where the manifestation of brand loyalty takes place in the minds of customers. For a jewellery brand, these values are adherence to cultural and traditional norms, designs, customisability, authenticity certifications, quality of craftsmanship, quality of stones and metals, pricing, obedience to regulatory norms, warranty, modernisation, etc. When these values are consistently maintained, it improves the chances of customers returning to a brand which in the long run takes the shape and form of brand loyalty.
Preparedness for Growth and Expansion
Hyper-localisation is a fundamental concept of marketing that will always help retailers resonate better with local market conditions. So, getting better at hyper-localisation is a valuable expertise and experience for business growth and expansion projects that may be executed in the future. This applies to retail jewellery businesses and brands as well. It equips them with the knowledge and insights of how to make hyper-localisation work for their business in varying local market conditions. When the time for growth and expansion comes, they would already possess a foundation of relevant competencies to hyper-localise their new stores in new locations. Improvisations may be warranted but they would not have to start from scratch.
How YRC helps get Hyper-Local: a glimpse
Market Research
In local market research, our team of experienced retail consultants presents a comprehensive analysis of feasibility, demand and trends, sales and channels, competition, pricing, and future propositions for both online and offline markets. The objective is to derive specific and actionable insights required by clients to formulate sound hyper-localisation strategies for new markets.
Business Model Development
In business model development, we provide assistance in identifying and defining unique value propositions and developing the necessary strategic framework of the value chain and internal capabilities for the hyper-localisation of business models. This framework outlines and establishes the route map of the creation, value addition, and delivery of the intended final value propositions to customers in local market conditions.
Business Strategy Consulting
In business strategy consulting, we help formulate the business or functional strategies required for hyper-localisation. These strategies help run a business in an organized and coordinated manner covering both core and support functions like operations, marketing and sales, finance, IT, HR, inventory, logistics, etc. The role of each business function is mapped and defined while securing the required coordination amongst these functions on the way to making the business model work under local market conditions.
Financial and Commercial Assessments
Financial and commercial assessments, which are an important part of a business plan, divulge the numerical and statistical strength and feasibility of a business idea. These assessments are necessary for startups as well as growth and expansion projects of existing businesses. The decisions of investors are heavily influenced by these assessments and projections. We prepare these estimates with a detailed analysis of:
· Capital and initial investments
· Operational expenses
· Purchase and inventory planning
· Flow of revenue
· Profit and loss projections
· ROI and break-even analysis
· Financial ratios, etc.
SOP Consulting
SOP development and implementation is one of our fortes. In SOP consulting, we develop and help implement SOPs for business processes with the bigger goal of helping businesses become process-oriented enterprises as different from people-dependent systems. Our SOPs establish routine flow of work and operational standards, help create and maintain consistency in business operations, and eliminate errors, waste and redundancies. Some of the examples of SOP solutions we offer are:
· SOPs for local supplier selection and onboarding
· SOPs for maintaining safety and security in stores
· SOPs for payroll process
· SOPs for QA and QC
· SOPs for customer grievance redressal
· SOPs for the checkout process
CX Strategy
Customer experience is a vital area of work in hyper-localisation. It directly concerns the ability of a retail brand to resonate with local customers. What makes CX an even more potent instrument is its subtleness. CX is extremely difficult to copy or replicate by competitors. In CX strategy, we share meaningful and workable insights based on customer journey. We address every important physical and digital touchpoint involving customer-brand interaction and the decision-making process of customers. Our experienced team provides insights on improvising CX throughout the customer journey starting from realisation of needs to post-sales support. In the localisation of CX strategies, various points of consideration we take into account are culture and tradition, recruitment, training, law and regulations, sustainability, use of technology, layout planning, operations planning, budgeting, etc.
Franchise Consulting
Hyper-localisation and franchising are natural partners. One of the reasons franchisors choose franchising is to avoid complete exposure to the business risks associated with diving into new market locations. By working with a local business unit, this risk gets shared. In this sense, franchising is like a solution for hyper-localisation. However, it cannot be guaranteed that the chosen franchisees are good at understanding their own local markets. This is where it becomes necessary to come up with strategies and planning that would make the franchise work in local market conditions. Achieving this localised alignment is vital in the retail jewellery business too. In franchise consulting, we offer assistance in framing expansion strategies, formulating franchise business plans, charting partner search activities, drafting franchise paperwork, developing SOPs for franchise business operations, and defining franchise audit processes.
Quick Recap
In the Middle East, fine jewellery echoes many deeply-rooted cultural and traditional values like blessings, fortune, appreciation, affection, and associations. With such rich cultural undertones associated with jewellery, it is never easy for jewellery brands to strike the right notes in the Middle East. This applies even more squarely to businesses coming from other parts of the world. The competition from experienced local and domestic brands makes things more difficult. As cultural and traditional values and norms play a determining role in shaping the specific nature of demand for jewellery, not taking local needs and aspirations into consideration is something jewellery brands cannot afford to do. This is where ‘hyper-localisation’ comes into the picture.
Focusing on hyper-localisation helps retail jewellery businesses discover potential market opportunities for resonating more profoundly with local customers in local markets as a local brand. Hyper-localisation increases the accuracy of merchandising decisions at the level of individual stores. As the focus shifts to small local markets in hyper local retailing, it is easier to study and analyse consumer behaviour and market characteristics to more comprehensive levels. This helps to come up with more effective promotional and personalisation campaigns in the context of local markets. Marketing aside, hyper-localisation also applies to other business functions like HR, operations, finance, administration, and others for the same objective of localised alignment. In the long run, being consistent with the efforts of hyper-localisation helps create and sustain customer loyalty. Getting better at hyper-localisation gives valuable experience and expertise for future retail expansion projects.
To know more about how we can help your business with hyper-localisation or for enquiries on other retail business solutions or to speak to one of our expert retail consultants, please drop us a note and we will shortly reach out to you.