Archaeologist believe that jewelry has been worn by humans for about 100,000 years. Even after all these years, say social scientists, the drivers that motivate people to wear jewelry are much the same as in the past. The very earliest jewelry wearers wanted to proclaim their wealth, power and privilege along with an identification of gender, age and social class – and so do 21st century jewelry wearers.

The key difference is that the gem and jewelry industry simply cannot take the consumer’s need to wear jewelry for granted today. A range of other products on offer fulfill many of the criteria listed above. And, most tellingly of all, jewelry seems to be slipping behind the other product categories in its attempts to stay relevant and on the consumer’s list of desirable must-haves.

“We simply cannot sit back and hope the age-old drivers will continue to push our products across the sales counters,” says Gem & Jewellery Export Promotion Council (GJEPC) Vice Chairman Sanjay Kothari.

“We have to constantly remind the consumer of the advantages of our product over the others that are jostling for a share of the consumer’s wallet. We need to get them excited about our product. They must want to buy jewelry.”

A failure to actively target the consumer and promote jewelry, Kothari warns, could have serious repercussions on the industry. “We have already got something of a warning from the consumer this Diwali,” he says. “They bought primary gold – biscuits and bars – but they bought very little jewelry. Intrinsic value, the one thing we’ve relied on to continue selling our product these many millennia, is no longer a guarantee of sales. Given the price of gold – and its huge fluctuations – why would anyone want to risk buying a product that of necessity isn’t made of pure gold and on top of that, lose more value as making charges are deducted?”

With investment out of the equation, the industry’s future lies in targeting the other reasons why people wear jewelry. Psychologists note that jewelry offers the consumer a way to differentiate herself or himself – in the way other fashion accessories such as scarves, handbags, shoes, sunglasses and cosmetics do.

The Indian gem and jewelry industry, points out one market researcher, has done very little to address the consumer’s need to wear jewelry. Whether or not that need is strong and prevails over the other factors influencing the consumer’s buying behavior is what will determine the industry’s future, he notes.

“After everything is said and done, what it all comes down to is whether or not your sales have been good. Nothing is more important to a business than sales. It’s the top line of the income statement, and the activity and result that makes all the others possible. Every single jewelry retailer’s survival and long-term well-being are ultimately dependent on successful sales results.”

He goes on to say, “For literally thousands of years, Indian jewelers didn’t have to worry about sales. They had a clientele of millions who were just waiting for opportunities to buy their products. If you had jewelry to sell, you had a successful business.”

Not anymore. “What many jewelry retailers have failed to identify is that Indian consumers have not really been interested in their products all these millennia,” says a marketing strategist who asked not to be identified due to contractual reasons, “they have only been interested in the raw material that went into the product – gold.” Now, he notes, jewelry retailers have to get Indian consumers interested in their product – because the raw material is now being increasingly bought in its primary form and doesn’t require the services of the gem and jewelry industry.

Advantage of Relationships
In this endeavor, most Indian jewelry retailers do have one absolutely priceless asset – long-term relationships with consumers. “Most other industries selling products to consumers would give an arm or leg for the kind of relationships Indian jewelry retailers have with their clients,” notes the strategist. “In today’s world, if you have a strong relationship with customers, you have a successful business. The product you sell is literally of secondary importance.”

But the relationships alone do not mean the customer really wants what the jewelry retailer has. That, say most industry watchers, is the key to future success. “Retailers need to ask themselves what they need to do in order to have their customers want what they have to sell,” noted a speaker at a seminar on marketing. “For many consumer products, this doesn’t come from market research and understanding the consumers needs and wants only. Successful firms come up with products that consumers didn’t know they even wanted until then.” He went on to quote the success of the late Steve Jobs, the co-founder of Apple as a classic example of this. “Jobs came out with products customers didn’t know they wanted. Now the iPod, iPhone and iPad are all ‘must have’ products for many consumers and set the standards for all similar products from competitors as well.”

The jewelry retail industry in India has only really reacted to established consumer wants – at established sales occasions. It has not ever thought out of the box and has not worked at innovating and developing novel products that would attract the interest of the modern consumer. To begin with, it needs to understand that the way the consumer is serviced is rapidly changing too.

“We need to understand, says the GJEPC’s Kothari, “the way the world shops and buys is changing rapidly. It has already impacted the gem and jewelry industry. Take diamonds for instance. The entire process pipeline has shortened and changed. Where mines once sold their products to rough diamond dealers, they are now selling directly to cutting and polishing firms. The rough dealer has all but vanished. And further down the pipeline, where the cutting and polishing firms sold polished diamonds to wholesalers who then supplied jewelry manufacturers, the wholesaler has become an endangered species as diamond processors sell directly to jewelry manufacturers – who in turn have cut out their wholesalers and now sell directly to the retailers. Given the Internet and how it is changing the way business is conducted, it isn’t unthinkable to imagine a world where tomorrow the retailer might go the way of the rough dealers and wholesalers as jewelry manufacturers directly interface with consumers.”

But, Kothari cautions, what is key is that the consumer remain interested in the industry’s product. “Without the consumer, we don’t have any business – no matter which part of the process chain dominates it.” And Kothari worries that the consumer’s interest might be flagging. “After De Beers exited from its global generic promotions of diamonds, there has been a noticeable slump in the pull-through from the consumer end for the diamond process pipeline. Whatever anyone might say, De Beers really did boost demand for diamonds by infusing them with emotional content and making them an object of desire. They did this for decades, spending between $150 million and $250 million a year towards the end. The industry now takes that consumer desire for granted. This is a big mistake.”

Kothari points out that while there are over 300,000 jewelry retailers in India by some estimates, those actively promoting jewelry can be counted on one hand. “It’s just a few of the big operations, particularly the branded ones. We’ve got to get broad industry involvement in marketing and promotions,” he states.

Value For Money Still Matters
One way to get the value conscious Indian consumer interested thinks Kothari, is to develop products that the consumer also perceives as being good value for money. But to get there, the industry has to first understand what the consumer thinks is fair value for the product. “Right now,” he says, “diamond prices are more or less being set by the mining firms. This is a complete reversal of the established process for any product. It is always the consumer who sets prices through demand and willingness to pay. You can’t force prices down a consumer’s throat.”

Kothari thinks that developing product that fits clearly defined price points would help set demand levels that would then re-jig diamond prices according to what the consumer is willing to pay. “But we need to actively target the consumer with whatever it is we are offering.” According to him, the GJEPC, which ran the Anant generic diamond promotion campaign a couple of years ago, is willing to revive a modified version of the initiative if the retail industry is willing to participate with both funds and inputs. The Anant campaign used Bollywood actress Sonam Kapoor as its brand ambassador to define the many roles of a woman in society – a daughter, a lover, a wife, a friend and a professional. It used a variety of diamond jewelry to stand as symbols defining each of those roles.

The campaign wasn’t a commercial success, but Kothari thinks that the industry learned a lot from it and a refined edition might actually help the industry make that all important connection with the consumer. “It all depends on what the retail industry thinks would hit the target,” he says. “If they think they might do better with a version of their “Lucky Lakshmi” initiative, the GJEPC is willing to back them. We’re willing to back them with anything else they might come up with in the way of a business-to-consumer outreach.”

While the Indian gem and jewelry industry has had great success with the various parts of the process pipeline networking and interacting, it hasn’t been able to successfully extend that interaction to the end consumer.

“We have too much in the way of business-to-business activity and not enough in terms of consumer outreach,” says Kothari. “We have the IIJS trade show in August, which is one of the world’s three largest shows; the Signature show in January, which has had a great deal of success in getting niche and high-end players in touch with their appropriate counterparts either upstream or downstream; and a host of other professionally managed shows all targeting various players within the industry itself. We need more consumer-oriented trade shows.”

According to Kothari, to stimulate and keep up consumer interest, there should be a minimum of 10 well-organized business-to-consumer shows. “We need to focus our efforts on the end consumer. These shows should allow only retailers and brands. That way they we will ensure that the consumer is clearly the focus of the show.”

Internet Extends Reach
The Internet, say marketers, also provides a great platform to help fire up and maintain consumer interest in jewelry. Jewelers of America (JA), a U.S. national trade association of jewelry retailers, runs the Jewelry Information Center (JIC), which is a dedicated consumer education organization. It runs Internet campaigns like the “Sparkling Snapshots” initiative, which offered prizes for the best photos of consumers wearing jewelry at some specific occasion. Along with this, it also ran the “Ultimate Proposal Contest” that encouraged consumers to write in and share their proposal stories.

By using the Internet, these campaigns had two advantages, they had tremendous reach all across the U.S. at very little cost and they provided consumers with an opportunity to get national visibility. The campaigns also reinforced the message that diamonds, gemstones and jewelry stand as symbols for a great deal of emotional content. This is something that resonates strongly with today’s consumers all around the world.

The Internet has a surprising strong penetration in India and is rapidly becoming the route of choice for a variety of Indian products that want to expand their reach to consumers around the country. The gem and jewelry industry has been a relatively slow adopter of the Internet as a means of commerce.

There are a variety of options, but aggressive action needs to be taken now, say industry watchers. One jewelry manufacturer reported after an extensive countrywide tour that retailers all over the country were reporting declining footfalls. “This is a problem,” Kothari notes. He states that on a visit to Dubai recently to speak to an industry focus group, he observed that while a gem and jewelry show seemed to have more exhibitors than visitors, a nearby automobile show was packed with consumers.

“Whatever it is we do,” says Kothari, “we have to do collectively and quickly. Time is running out and we run the risk of being swamped by a whole range of other products that are all being aggressively promoted. We’re losing ground and we need to do something about it right now. Tomorrow might be too late.”