The progress of the ad industry has always been in sync with consumer emotion and about 40-45% of the annual spends in India happen between Raksha Bandhan and New Year, where a good chunk comes from the jewellery market.
This year, after ad spends fell in Q1 and Q2, a lot of expectations are on the wedding and festive seasons for the sector’s overall revival.
According to data compiled by the World Gold Council, the jewellery and gemstone market registered the smallest annual purchase since 1995.
The jewellery sector is looking at some recovery during the festival period, said Sunil Nayak, CEO at Reliance Jewels.
After the lockdown was eased, the country is slowly opening up and he feels the new normal will have a positive effect on the gems and jewellery sector.
“When the dust settles, while we are seeing a positive demand for gold and gold products on the investment front, the weddings and festival season will lead to a tremendous shift in the buying pattern. From a consumption pattern view, a huge positive change has been seen in customers’ tendency to purchase fine jewellery, especially gold, not just for festivals and weddings but for gifting and investments too,” he said.
Most of the weddings planned in Q1 and Q2 have been postponed to Q3 and Q4 and brands expect the demand to grow more.
Also, as people spend less on travelling and other lifestyle expenses, jewellery will certainly benefit from a portion of this unspent income, said Nayak.
Ever since the markets have started opening up across the country, Orra has seen a steady growth in customer demand.
“While it is too early to predict the future with the given health situation, if this positive trend continues, we foresee a healthy demand for our category by festive, even if not as high as the previous years (pre-Covid),” said Dipu Mehta, Managing Director, Orra.
Festivals and festive occasions, especially major ones like Akshaya Tritiya, Diwali and Dhanteras, are very important for jewellery brands in India.
“After the coronavirus crisis and the prolonged contractions and restrictions in its wake, people will be looking earnestly to not just get back normalcy in their lives but also mark those actions that restore normalcy. And buying jewellery and gold during festive occasions are a major reassuring factor. We see a surge in demand and a swing-back of latent demand as well since next to no purchase could happen during Akshaya Tritiya,” said Nishit Nanda, CEO, Consumer Business, Khimji Jewels.
Impact on adex:
Given that some normalcy is returning to the retail sector, Mehta expects ad spends would be less but not absent this festive season.
Nanda said while the overall adex may fall, brands and businesses that have stayed the course during the crisis and created strong relationships will benefit once the situation improves sustainably.
Also, he said the nature of adex will undergo radical changes.
Focused spends on digital and TV:
Nanda believes there may be a certain dip in the overall numbers because of prolonged inactivity during the height of the pandemic but this festive season, he predicts renewed and focused ad spends across digital, social, television and interactive experiential mediums.
“In many ways the redefinition of tried and tested marketing strategies and media mixes has been hastened because of the pandemic. Digital and social content, deep and enriched consumer experiences and overall CX-driven strategies across platforms and so-called new media are going to become more the mainstream norm than isolated examples,” he added.
Khimji has great products with new designs and value pricing for this festive season in the pipeline.
“Jewellery companies are more investing in the younger media or digital media that provides immediate and instant connect and gives one an opportunity to be more interactive and accessible to the customers,” said Nayak.
Reliance Jewels is coming up with exclusive new designs and collections coupled with great offers this festive season.
Mehta expects a higher trajectory on digital since the brand witnessed a significant growth in digital media consumption during lockdown.
Orra recently launched ‘Orra Crown star’ and expects that the product will give the brand a huge mileage this festive season.
More focus on e-com avenues and mediocre focus for print:
Nayak feels this new period will fetch new chances for the brands to show unique creativity and storytelling by incorporating messages that are in line with convenient shopping modes, unique and new offerings and all of it by incorporating the new normal positive vibes.
Technology will play a substantial role in the future and digitisation of the jewellery industry has also shown its prospects.
During the pandemic, many industries upgraded their business strategies digitally and there has been a rise of e-commerce in the jewellery industry, he said.
Brands are also taking notice of the benefits that the online shopping world offers.
While Reliance Jewels will continue to spend on traditional ATL media like print ads and outdoor hoardings, there has been a significant increase in the online spends due to the engagement and the connect it has been delivering for the brand.
Mehta said even Orra has been bullish on newsprint and has started advertising since July.
However, according to Nanda, print will see the biggest pushback.
“Print has remained a ‘touch’ medium despite continuous writings on the wall. And now, with the pandemic and its social distancing aftermath, print media is scrambling to figure out what went wrong. The medium has been notably tardy with innovations and experience redesign. TV is seeing and will continue to see a high growth trajectory as it has become a family fireplace even more strongly, because of heightened stay-at-home realities. Needless to stay, digital and social will see exponential growth,” he said.
Khimji is betting big on digital and social and TV will also be a key driver in the media and channel mix.
Opportunities in IPL but with realistic ad rates:
According to the brands, IPL overlapping with the festive season is more probable to push up the ad spends and bring in the much-required cheer and optimism to the market.
But Nayak believes the jewellery business has a large share of TG that does not see IPL as their primary entertainment/sport interest.
“While there will be an overlap and we might utilise this media for advertising, there are a lot of other media and avenues that brands like us will continue to use to communicate with our target audience during this time,” he added.
Nanda said the IPL has been way too overvalued and hyped for some time now “We expect a serious correction in the rates and asking prices in that property. We hope marketers will demand realistic pricing and success linked remuneration this IPL. We are cautiously evaluating this property and will take a call if we see value.”