In an effort to counter rising gold prices, India’s largest jewelry seller Tanishq, part of Titan Ltd, has launched a new range of lighter jewelry featuring a patent-pending hard alloy. In a detailed chat, Tanishq CEO Ajoy Chawla spoke about this “Hi-Lites” branded range which uses the new hard alloy to reduce weight by 15-25% through design rebuild and technological innovation without compromising aesthetics or visibility, helping customers. ‘buy more for less.’ Edited excerpts.
What is the new range and what is the innovation here?
The background is that gold prices have risen. Over the past two years, gold prices have risen more than 20%. It may have leveled off in the last, say 5-6 months, but they’ve gone up significantly if I compare it to prices two years ago. Gold is a volatile commodity, but there seems to be an upward trend.
So because of this, the clients we contacted, to understand their needs, were telling us that even though the aspiration for gold (jewelry) continues to be high, their wallet cannot stretch as much as the price of gold has stretched. To address this customer issue, we looked at the entire product line to see, how can we make products lighter and deliver within the same budget, without compromising aesthetic sensibility, quality and visibility.
And with that in mind, we undertook a massive exercise about a year ago and in October we were able to see the (deployment of the) first phase of this project. We have taken over approximately 4000 different Stock Keeping Units (SKUs) that were among our top sellers and products. We were able to convert approximately three thousand five hundred SKUs into gold jewelry, including everyday products as well as wedding products.
To achieve this, we have innovated on a few points. The first was a series of design rebuilds. Technological innovation in terms of manufacturing techniques, especially where there are machine-made products like panels, etc. We also used a patent pending hard alloy. This is a new material that has been used in our 22 karat (gold jewelry) where we are able to give a harder material so less material (gold) can be used, to give the same functional stability and aesthetic sense, sensitivity. We have also redesigned our products a lot.
Design rebuild technology innovation in terms of manufacturing techniques, material innovation in terms of creating a new hard alloy, and product re-engineering together have resulted in approximately 15-25% reduction in weight (gold used). Once again, I repeat that there has been no compromise on quality, finish, aesthetics as well as in terms of the distribution of the product. He looks so big. We do not try to reduce the size of the product.
As part of the first phase, we (quietly) kicked this off in the just-ended third quarter (of the current fiscal year) and are talking about it for the first time. 30% of the stock of gold products we had in stores was of this type and contributed 40% of gold jewelry sales. We call this range Hi-Lites.
We didn’t want to talk about it until we actually put it on the market and saw the impact and we also see customer feedback. During this calendar year, we expect to serve more than one million customers with these products.
What’s so unique about this hard alloy?
It is a completely different alloy. Anyone could create hard alloys. Many people have tried and there are others who might try. However, it is not easy to create a product that is feasible and in particular we use it much more for machine-made products.
This is something that we have worked on internally. We have filed a patent on the material itself and its composition. It really helps us to innovate, to create lighter products while maintaining product functionality and stability, because 22 karat is otherwise a soft material, you know. At this point, I won’t be able to reveal more than that.
Thus, it also translates into customers wanting to buy more coins. And that in turn unlocks its own edge in terms of volume growth. We are seeing an increase in buyer visits, especially new buyers to our stores. Thanks to this initiative, the growth of new buyers was 39%.
Given the resurgence of the pandemic and the selective confinements, has this impacted your activity? Is the focus more on digital sales and a push towards omnichannel?
Business was not impacted. However, online sales still represent a relatively smaller percentage of our overall sales, but have increased significantly. This year (online sales) is already around 4%+ (of overall sales). Which means it’s about double from last year. Compared to the pre-pandemic period, this is an 8X growth (in online sales).
I really think it can go even higher in the next few years because we have very aggressive plans for digital and it’s not just related to the current (pandemic) situation. Currently the stores are open. But I think the buying journey is more Omni and not just online. People can start their journey online, but they continue and complete the process offline. I think (buying jewelry online) is just a new way of shopping and a new convenience that people have seen.
We are currently around 380 stores. We added 27 stores in the first nine months. So we plan to open 7-8 more stores in the remaining quarter for this (fiscal). We are still working out our plans for next year, but typically we add around 30-35 stores every year and we don’t see any changes in that regard.
January 14, 2022