Best practises for business
Why a big omnichannel company needs to have the heart of a small family jeweller?
As an aspiring disruptor in the jewellery space ( I work at CaratLane) , we have always been at war with the “family jeweller”.
Someday, when someone will write the story of CaratLane, it will have lots of chapters about all the things we did better than the family jeweller. But this post is about the things that the family jeweller does really well and something we have been trying to copy from them.
This is one of the best kept secrets of Indian jewellers and something which will keep them insulated against all the digital missiles modern retailers and ecommerce companies throw at them.
This understanding came from all the time I spent hanging around in the Jaipur Gems stores. This is Mithun’s (CaratLane’s founder and CEO) family business. They run three stores in Mumbai, Chennai and Coimbatore, selling high end jewelry to an upmarket clientele.
They had a small customer base and didn’t spend a lot of money on new customer acquisition. But they did great because the repeat business from these customers was very high. They also got a decent number of new customers from word of mouth. And they never did any discounting !!
All great business leaders and marketing gurus will tell you that these are signs of a healthy profitable business.
So how did Jaipur Gems build this extremely loyal base of customers who bought frequently, never asked for a discount and actively evangelised the brand?
(And they aren’t alone in doing this. This is a feature of most well run family jewellers).
Answer : They had both Philip Kotler and Peter Drucker on their board of advisors!!
I am just kidding :-)
They provided their customers an extraordinary customer experience built on a high level of personalisation.
Their playbook was based on 5 principles
Knowing customer’s “Taste Graph” and preferences
Every month, each store would get a bunch of new jewellery pieces from their. merchandise team. The store sales team would look at every piece and figure out which customers might like it. They knew about each customer’s taste and preference and also remembered everything they had purchased in the past. Based on that, they had very accurate heuristics for predicting whether a customer will like a particular piece of jewellery or not.
They would know that Mrs Gupta bought chandbalis but not the ones with pearls. She liked them with small multi coloured gemstones and uncut diamonds.
Knowing customer’s purchase pattern and buying occasions
They knew all the possible jewellery buying occasions for every customer and their family members.
They would know when Mr Ramachandran’s. anniversary was coming up or when his daughter was going to graduate. As a result, they never bombarded you with marketing communication. They always get in touch at just the right time.
They also knew the impulse buyers. The ones who would always be interested if their preferred type of of jewellery came along
This was the coup de grace aided in no small part by the first two points. None of them had read Cialdini’s principles of psychology but they were masters of persuasive conversation.
This is. a typical conversation.
“Mrs Iyer, we have new earrings in delicate jaali work. You only buy such delicate pieces. We have only two pieces and they usually get sold immediately. We thought we should first check with you before we put in display for everyone else”.
The guy also knew that the right time to call Mrs Iyer was in the evening when she was relaxing with her filter coffee.
The part was remembering all the small things and little quirks which make the service extra extra special.
Like making sure the customer was attended to by their favourite sales person.
Or remembering Mrs Khandelwal’s ring size so that her husband could surprise her with a solitaire on her 50th birthday.
Or that Mrs Senthil preferred a madras screw in her earrings.
Or making sure Mr Sharma’s gift order goes with a note and a bouquet because that how his wife loves it.
Most normal human beings are touched by these small gestures. And they form a bond with people who care so much for them.
It was never about the Short Term
In Jaipur Gems, they never ever pushed a sale. Sometimes, they would even tell a customer not to buy something because it wasn’t right for them. Building a great rapport with the customer was paramount. They knew that the long term business return on such relationships with their customers was far superior to short term considerations. They were lucky that they had no board or shareholders breathing down their neck for quarterly performances.
To summarise, the family jeweller and his team knew “WHEN to reach out, WHAT to recommend, HOW to build the conversation, WHEN to say NO and HOW to make you feel SPECIAL.
This is customer experience taken to another level. Any business which can build a system to execute this will always do well. It’s hard to pull off but there are enough family jewellers who do this well. I don’t know but I think this is also unique to jewellery. Being a high involvement, high trust, high emotion category, the role of personalised experience is amplified manifold.
This strategy has its problems and limitations.
It’s very people driven. It only works when you have a great sales team which has been around for a while. There is no training program and CRM for this. It happens though osmosis — watch and learn and develop muscle memory.
These processes are not scalable beyond a point Like Jaipur Gems, most of these jewellers have small customer bases. I don’t know whether they haven’t managed to scale or don’t want to (There is a fascinating book about small companies which wanted to be great but not big. It’s called Small Giants and its written by Bo Burlingham)
This understanding raises two important questions for an ecommerce company or any large retailer.
One, if these are small set ups, then why bother with what they do? They can’t (or don’t want to) scale and compete with national chains.
The answer is that collectively they address a large enough market size and an important one also — customers who buy often. Additionally, the customer is the same. If you want to win him over , you need to provide a similar experience.
Two, how does a company like CaratLane ( or for that matter any large retailer) replicate this ?
This is really hard. It’s like asking an elephant to dance. Which is probably why we still aren’t at this level yet despite knowing about these best practises for more than 10 years now. It’s not that we are bad. We do a good job of customer experience and our NPS is above 70. But we are not at Jaipur Gems’ level.
We spend a lot of money on new customer acquisition, we discount and we are always chasing monthly and quarterly targets.
So what will it take — to become a large omnichannel retailer with the heart of a small family jeweller?
This is what we think it will take
Technology has to play a big role in this. But there is no ready made solution which will work for the jewellery industry. Take recommendation engines. Most systems which work in other categories fail miserably when applied to jewellery. It will require solutions to be built grounds up and tailored specifically for this category.
Consumer Data is the other key variable. We need in our CRM’s and databases; the kind of data that resides in the heads of the people who run the Jaipur Gems stores. But mind you, our jewellery is different, our business is digital and our consumer is different. So we can’t just copy the Jaipur Gems data. We need to identify our own data points and capture it for each and every customer.
Customer Understanding will determine whether your Technology solutions and Data models will work or not. Thanks to our scale, we have more types of consumers and therefore we have more types of consumer journeys — how people visit, browse, decide and buy.
And there’s a lot of guesswork as the customer is never in front of us. He’s virtual. We guess his intentions by his digital actions . Using these actions, his journey needs to be fully unravelled and understood. And then an experience needs to be designed for each specific type of journey — this is where we use the 5 personalisation principles of Jaipur Gems.
The combination of data, technology solutions and personalised customer journeys will enable us to replicate the Jaipur Gems experience at scale.
And then we will eventually become a BIG GIANT. A big guy with the heart of a small guy.
This is the state of perfection that we are chasing. It’s still out of reach but we get a little closer everyday.
Thanks to everyone at Jaipur Gems for teaching me about jewellery and for helping me with this post 🙏🙏.