JCK India’s last conference call in a series of three events leading up to the final event, JCK AIM 2009 on 18 December 2008, on Tuesday concluded that aggressive marketing and increased spends on advertising could be beneficial to the gems and jewellery industry in the current economic scenario. Anil Talwar, owner of Chandigarh-based Talwarsons Jewellers supported the idea by recounting Talwarsons’ example: “We have tripled our ad spend this year and reaped exceptional benefits in the form of an over 50% year-on-year increase in sales, even in the so-called economic crisis”. Interestingly Talwarsons’ 2007 sales grew 36% over 2006.
Subhash Bhola, director of New Delhi-based Bholasons Jewellers, agreed that increasing advertising spends during an economic slowdown is one way to distinguish the spender from the crowd. “It increases the recall value of the brand, and when prices stabilise and people decide to buy, that retailer comes to the top of their minds.”
His contention however, was that not every retailer has the means to afford these kind of advertising spends and that indulging in such an activity was the choice of each individual retailer and could not be generalized across the board.
Meanwhile, Sanjeev Agarwal, managing director of Revah Corp cautioned that such a move in the face of lesser buyers and reduced cash flows would require an exceptional amount of spunk on the part of the retailer who undertakes it.
Nirupa Bhatt, managing director-India and Middle East, GIA, who also moderated the discussion, focused on how to enhance existing promotional activities to benefit the industry in this time of need.
While culling out issues related to the marketing and public relation activities of the gems and jewelry industry, Agarwal also brought up the impact of gold price volatility, which has resulted in reduced walk-ins and off-take at retail stores.
Although Tanishq’s regional business executive Koshy Cherian agreed, he pointed out that this was a problem shared by the entire luxury retail space. “Volatility in gold prices causes customers to become skeptical about buying.”
Kolkata-based MP Jewellers’ director Shibankur Roychoudhury added: “Due to heavy volatility in gold prices, retailers’ margins are shrinking badly.”
Contrastingly, Talwar, who is also a director of the All India Gem and Jewellery Trade Federation (GJF), believed the India story will remain intact, though there may be a slowdown from the exceptionally phenomenal GDP growth rate and a meteoric 1,000-1,500% growth for the gems and jewellery industry over the past 15-20 years.