Alongside festivals and cuisine, jewelry is an essential thread in the cultural fabric of India. Since antiquity, jewels have been used as offerings in religious ceremonies and acquired for their intrinsic value, forming an important asset class in a family’s wealth portfolio. But buying jewelry is not just about the transaction. The pleasure that comes from visiting a store, viewing options across price points and categories, and trying on the pieces is an essential part of the satisfaction one gets from a purchase.
As lockdowns brought down the shutters at stores across India, CaratLane — the country’s largest internet-first, direct-to-consumer jeweler — began rolling up its sleeves to prepare for the growth it saw on the horizon.
“Covid-19 has been an adrenaline shot for all direct-to-consumer companies, and the single most significant event in the life of digital businesses, which have benefitted the most,” says CaratLane founder and CEO Mithun Sacheti. “Demand for diamond jewelry had been stagnant in India for a while (with gold jewelry on a high). During the pandemic, things changed. Suddenly, we saw a resurgence in diamond jewelry sales. The time people have spent with their families has been disproportionate compared to any other year. We believe this drove people to celebrate more moments.”
Furthermore, he continues, “savings have grown. One of jewelry’s chief competitors is travel. Our lowest periods pre-Covid-19 have coincided with the second half of December and May, the peak summer holiday season. Jewelers have sold more solitaires in India during the pandemic than in previous years.”
Since its founding in 2008, CaratLane has established itself as a dominant player in the fine-jewelry segment. Jewelry purchases in India have always been related to weddings and special occasions. CaratLane changed that by offering women well-designed, fine-quality, wearable gold jewelry at accessible price points. It also offers multiple ways to shop: Customers can browse and buy online, opt for the Try-at-Home service (selecting a maximum of four pieces), or visit one of the brand’s 122 stores across 45 cities.
The tools for the job
When the pandemic struck, the CaratLane team tapped into one of the most valuable tools in its arsenal: OneView, a proprietary software the company conceived five years ago to help its employees understand customer behavior.
“The emotional experience of buying jewelry rests with the consumer,” explains Sacheti. “A small jeweler who specializes in highly personalized interactions with his limited customer base knows this well. [Customer relationship management (CRM) systems] are effective in scaling and organizing lead-related information, but rarely equip users with the knowledge of how to personalize interactions with customers. OneView was built with a grand vision in mind, and that vision comprised marrying the two parts to form a CRM that digitizes and journals the entire journey of a consumer.”
Still, the team realized that OneView alone would not be enough to meet the challenges of Covid-19. In combination with the software, they began using pin code marketing, which targets specific residential areas by their postal codes. When lockdowns started, says Sacheti, online browsing jumped from approximately four hours a day to six hours. As weeks of confinement rolled into months, OneView insights showed that demand was percolating. The team estimated that the first cities to close would end up opening ahead of others, so two weeks before a district or city emerged from lockdown, CaratLane increased its pin code-based activities there on multiple digital channels to get more local residents browsing its website.
As an omni-channel business with combined sales and marketing teams, the company was able to turn the data it was receiving from OneView directly into action, and to adjust its efforts with relative ease as the pandemic situation developed. But online marketing wasn’t just about staying visible; engagement was vital as well. The company identified individuals who showed interest, and re-engaged them with campaigns.
CaratLane also started a program called CLive, which lets clients pre-book appointments to visit stores virtually. Through it, they can engage with a salesperson and ask to see various jewels, as if they were there in person.
The company’s results reflect the success of these programs: CaratLane has enjoyed a whopping 50% post-pandemic growth rate — among the highest globally.
“Since inception, our core marketing strategy has been built on our two-pronged approach: create fine jewelry, and use technology to remove friction and barriers,” says Sacheti. “Effective technology is like magic; it should be invisible.”
The company didn’t stop at creating its own digital solutions, either, he continues. “We conducted a workshop to teach other jewelers in the industry how they could create and manage a virtual store program.”
The human factor
Of course, it wasn’t all smooth sailing. The most formidable challenge the company faced related to its people.
“If you [were to] ask me, in the past five years, when did I lose sleep? It was during the pandemic, when our team members were falling sick and one of them sadly succumbed to Covid-19,” Sacheti shares. “When lockdowns started, many left the big cities and went back to their hometowns and fell sick. We could not reach them.”
With schools closed in India since the start of the pandemic, there has been additional pressure on working women. Many women in India live in large, multi-generational families. On the plus side, this provides them with vital support in child rearing and management of domestic affairs, enabling them to enter the professional arena.
“When our female employees came to work, they had a physical space they called their own,” says the CaratLane CEO. “Now at home, many didn’t even have that, and it was confusing for their children and elderly members of the household who were all at home and expected their attention. Some thrived in that environment, and others struggled.”
As to how the pandemic affected buying behavior, CaratLane has noted a few shifts. With metropolitan cities under lockdown for long periods, tier-two and tier-three towns drove incremental growth. Other changes included more purchases by men, an increase in the popularity of earrings at the expense of bangles, and a disproportionate rise in gifting.
Eye on America
Planning for the coming 12 months, CaratLane has its sights set on the US market. The company has started shipping internationally and is exploring ways to capture a large slice of the American pie.
The US “has always been a market leader” when it comes to customer service and using technology to remove barriers, Sacheti observes. “But the US has had business come much easier to them. People trust the infrastructure. If you order something online, you know FedEx will deliver it the next day. In India, logistics can be unreliable. From the start, we have been using technology to solve problems, which change daily, and one thing the US could learn from us is our hustle, a big part of building a business in India. In India, we are creating the market; in the US, we will take part in a market that’s established.”
Another segment the company is monitoring is synthetic diamonds, “which we noticed are doing well in the US,” he comments. That said, CaratLane doesn’t have plans to introduce synthetics in India. “Indians are too emotionally attached to natural diamonds. We are perpetually looking for buyback value when purchasing jewelry. With the price of synthetic diamonds dropping 30% year on year, it’s wait and watch for us in India.”
Among its other projects, CaratLane has introduced a jewelry rental business called AuDorn, which lets users borrow branded jewelry — such as the iconic Tiffany T bracelet — for as little as INR 500 ($6.70) per day.
India’s precious-stone and jewelry market is set to reach $100 billion by 2025, according to estimates from the Ministry of Commerce and Industry. As a top player in the country’s fine-jewelry sector and one of the largest in the world, CaratLane is one to watch as it rides the jewelry wave both at home and abroad.
caratlane.comArticle from the Rapaport Magazine - September 2021. To subscribe click here.