CASE STUDYIIM-K • GEMS & JEWELLERY • CARATLANE

CASE STUDYIIM-K • GEMS & JEWELLERY • CARATLANE

Background:

Category Challenges & Opportunities:

CaratLane.com is India’s trusted online jewellery retailer of diamonds and gemstone jewellery, solitaires and gold coins. It is the brainchild of Mithun Sacheti, the scion of Jaipur Gems, and seasoned IT entrepreneur Srinivasa Gopalan. Together, they founded CaratLane.com in 2008, a unique amalgamation of technology and the traditional jewellery business.

CaratLane.com is India’s first and largest online diamond and diamond jewellery portal offering a wide range of solitaire diamonds; solitaire based jewellery, readymade diamond jewellery, gold and engraved jewellery. CaratLane.com has tied-up with more than 4000 vendors worldwide to offer a wide choice of solitaire diamonds. The site carries solitaire diamonds of all shapes, colour, cut and clarity grades, which start from 30 cents going all the way up to 10+ carats. This limitless choice makes CaratLane.com the largest diamond store in India. Customers can either buy these as solitaire diamonds or get them made into solitaire-based jewellery. CaratLane.com offers a wide range of ring, pendant and earring designs. Once customers select their diamond they can get it set on a design of their choice.

In a short span of about six years, CaratLane.com managed to become the de-facto choice of Indians shopping online for diamonds and jewellery. CaratLane.com offers its customers’ diamonds, solitaires, gold jewellery and gold coins at competitive prices. CaratLane.com allows customers to choose from over 120,000 solitaires and customize their purchase. Traditionally, customers have purchased diamonds and solitaires based on the jewellers’ advice. This is because diamonds were wrongly perceived as complex products. CaratLane.com aims to educate customers about diamonds and help them make informed choices. It helps customers deepen their knowledge of diamonds and jewellery before they actually make the purchase, thus placing the power in the customers’ hands. In a pioneering effort to bridge the gap between offline and online, CaratLane.com launched Try At Home – an innovative service which enables consumers enjoy best of both worlds – virtual & real. CaratLane.com also offers customers the option of Cash-On-Delivery (upto Rs 49,000 in 41 cities across the country), making transactions easier. Since CaratLane.com does not carry inventory and hence does not have store overheads, it is able to pass on savings of up to 30% to the customers.

Over the years, CaratLane.com has launched various compelling jewellery collections (Candy Crush, Drops, Radiance, Eterna & Fleur, to name a few) based on deep design stories, which have received an encouraging response. This has been possible due to our understanding of the context of today’s Indian women. We design keeping their aesthetic needs of modern and contemporary jewellery in mind. All jewellery collection launches go through a stringent and ruthless evaluation process, right from design to development to production, all of which is managed in-house by specialist in their respective fields, to have total control on the product quality, be chic, unique in the market place and turn around jewellery collections every 15 to 20 days, which keep the brand fresh and dynamic.

Consumers who have been purchasing from CaratLane.com swear by our unique designs and generally believe that their regular jeweller/ jewellery brand is unable to provide such designs.

CaratLane.com was recently adjudge the Best Ecommerce website at the 4th India Digital Awards held by IAMAI and was also featured as a case study in the recently published book called the “Mouse Charmers” by Anuradha Goyal.

The year 2013 and early 2014 saw CaratLane.com getting active with multimedia campaigns. We launched our nationwide launch Campaign in Jan 2013. The campaign predominantly aims to launch and establish CaratLane.com as a brand that assists inexperienced men in taking control of the entire relationship milestone situation. In this case, the most popular relationship milestone is ‘The Proposal’ with the solitaire offering from Caratlane.com. The campaign has delivered on setting the tone for the brand in the market place and achieving the desired business objectives. In October 13, we launched a brand-actional campaign around jewellery with the theme of “it’s a great time to be a woman”. The communication was on air over 4 months till Feb 14. The communication was appreciated and the campaign delivered on driving direct traffic to the website.

Solitaires:Traditionally in the Indian context, solitaires have been the last mile as compared to the western context, where it is the 1st

CARATLANE CASE STUDY

CARATLANE CASE STUDY

step. The ladder would begin with gold, then diamonds and then Solitaires. However, things seem to be changing around and the concept of Solitaires being used for (informal) proposal and (formal) engagements is catching up fast.

The lack of knowledge about Solitaires and Diamonds amongst prospective buyers is the main reason for a customer to evaluate a big brand name / family jeweller in the market place so as to reduce the risk of going wrong in a high value category (Solitaires & Diamond Jewellery) like ours.

While there are many browsing online sites, buying solitaires/ jewellery online is not the most obvious option today for customers. The risk associated with the online channel from a customers’ perspective are two fold – buying from someone unknown and buying online.

Also jewellers and retailers are under pressure to push the physical inventory as they have invested in it with large carrying costs. This is not necessarily the best option for the customers, who end up making a compromise both in terms of price as well as the product.

Most counter sales staff are not competent when it comes to selling solitaries as they are floating from one counter to another. E.g.: a counter sales staff managing kundan polki, would also manage counters for diamond jewellery, plain gold jewellery and solitaires. So the discussions are more transactional in nature and barely consultative/ collaborative.

Opportunity in Designs:With the influx of various international apparel/ fashion brands offering international designs the wardrobe of Indian women is ever evolving based on their respective context/ environment, however jewellery design is still to keep pace with that evolution in the need of her self expression. With the growing Nos. of working women population within India, the pants, skirts and jumpers are beginning to occupy space with the Sarees and Salwar kurtas. This has also led to many consumers looking out for options beyond yellow gold to compliment their respective attire. Something chic yet wearable everyday.

Women in different contexts have unique needs from the jewellery category. The category needs of a women entrepreneur would be different from that of a woman working in a creative role and the category needs of a banking professional would be different to that of a school teacher. The traditional jewellers/ retailers always tend to focus on the wedding jewellery customers due to large ticket sizes and hence 80-90% of designs stocked are traditional in nature.

The general pain area/ of our customers is that they don’t find contemporary and modern / chic designs for everyday wear at there regular jeweller / jewellery brand. This is one of the significant reasons for them considering CaratLane.com as an alternative to fill the gap.

Online Jewellery buying Challenges:Jewellery buying is a group buying process in physical retail. Most transactions have more than 2 people involved in buying and in all probability who are in a close knit relation. So jewellery buying is done together as the risk of getting it wrong by one self is high. The POV/ opinion of the partner accompanying the consumer is of utmost important in addition to evaluation of design intricacies, size, fit, price etc.

While online Jewellery buyers get almost all the important details pertaining to size, design, material, price etc, however aspects like fit and POV’s / opinions from the partner are missing.

Easing Online Jewellery Buying:Try at Home - A unique service from CaratLane.com, wherein one can simply log on to CaratLane.com, select the preferred jewelry and order it home for trial purposes and then decide to make a purchase. So you can enjoy the best of both worlds – sift through Jewellery online the modern way, and try it on, at home, the traditional way. ‘Try At Home’ is a unique service in the online jewellery market and therefore a key differentiator for CaratLane.com. Frequently in a jewellery store, the customers are inclined to try jewellery after jewellery and keep aside the pieces they like for trial and comparison. Traditionally customers prefer to touch, feel and try on jewellery before making a purchase. Addressing this need, CaratLane.com chooses to pamper its customers by offering them a ‘Try At Home’ Service. CaratLane.com, whose fabulous creations speak a universal language of emotion and style, has made available ‘Try at Home’ service to all metro cities. Where customers can choose up to five designs online without any upfront payment and CaratLane.com will arrange to send right designs with ideal size and fitting to the customer’s preferred address to try and enjoy personalized experience and attention. Once customers make their pick, they can make the purchase instantly or go online again and place an order.

We believe ‘Try At Home’ has the potential to drive consumers who are sitting on the fence today, to try out the service. It’s the first of its kind in the online jewellery space and hence a key differentiator for CaratLane.com. As Try At Home service

predominantly caters to the jewellery category it has the potential to drive the Nos.

How Try At Home works:

• Choose 5 products online. No payments required.

• Request for an appointment to see these products at your desired address.

• CaratLane.com rep confirms the appointment.

• CaratLane.com rep carries these 5 products to your address. Free Shipping

Rational benefits– “Getting it right”.

Try At Home is the solution to the various concerns that customers face while shopping for Jewellery online.

• Getting it right with the Size of the product

• Getting it right with Design Intricacy/ Details.

• Getting it right with the Fit on the body

• Getting it right with a POV / Opinion of a partner

Emotional benefits - “Together”

Since jewellery buying is a group process done together with close-knit relations, we would like to focus on the romantic relation to lend consistency to our existing positioning.

Build Credibility:It began as an extension to our online businessso as to provide a forum for prospects to experience the brand in the real world. It helped us build credibility and trust for consumers online as there was a face to the brand in the real world as well. Provided the online consumers the opportunity to touch and feel the product.

CaratLane.com opened Solitaire Experience Lounges in New Delhi and Hyderabad in a bid to encourage customers to shop online. At the store, customers are given all the information about solitaire that they are wishing to purchase and experts handhold them through the entire transaction process.

The lounges serve only as an offline extension of our online store. In other words, we are guiding our customers’ offline to help them shop online. The model helps us expand accessibility of our brand. It’s like a positive pre-conditioner.

The hi-tech lounges exhibit over 1,20,000 solitaire diamonds and CaratLane’s signature collections of fine jewellery. The lounges are designed to encourage “browsing”, similar to shopping on a website, and are equipped with several touch screens and iPads that showcase our key collections.

At the lounge, each customer is guided by an expert, who not only gives them a crash course on diamonds but also introduces them to shopping for high value items (like solitaires) online. The customer can touch and feel a product at the lounge before ordering it online. Their order would be processed like any other online transaction and the product would be home delivered to them.

We currently have 2 Solitaire Experience Lounges in New Delhi and Hyderabad respectively. 3 more stores are in the pipeline in Mumbai, Bangalore and Chennai. The selection of a location is based on the potential of the market. New Delhi and Hyderabad are key markets for us given their density of experienced jewellery buyers there. The average size of our lounges is around 1500 sq ft.

Activating consumers offline:Diamonds / Solitaires are considered as a ‘complex’ product and a good part of our efforts are targeted at correcting that impression and help customers understand the category. Direct contact helps build trust and an emotional connect and that is very significant in the solitaire / jewellery category.

CaratLane regularly organizes outreach programs for customers and actively engages with them at high-end societies/ communities, exhibitions, Malls, Corporate campuses and through alliances with private banks for their elite customers. CaratLane.com organizes Diamond Appreciation Workshops at high profile gated communities in New Delhi where residents of the gated community attend the event. CaratLane also conducts wine and cheese crash courses on diamond for priority banking customers of a Private bank. CaratLane also keeps participating in community programs. For example, during Diwali, CaratLane sets up stalls in neighbourhoods of Chennai, Hyderabad and Bangalore. As people celebrated Diwali, they could walk up to these stalls and obtain information about CaratLane and its collections.

CARATLANE CASE STUDY

CARATLANE CASE STUDY

We have been actively present at malls & corporate campuses in Delhi and Hyderabad. These are like weekly event, which are made engaging through interesting contests to ensure participation and constructive interactions.

Forging meaningful Alliances:Some key alliances/ partnerships we have done in the past include the likes of American Express, Platinum Guild International, BMW, Evoluzione, The Amethyst Room, etc. In addition to this we have partnered with Bollywood movies of the likes of Shaadi Ke Side Effects & Dhoom 3 to seamlessly incorporate our brand with relevant content.

Relevant Stats:Monthly metrics

Revenue - 12 cr

Website visitors - Approx 0.5 million

Female vs. Male ratio of visitors: 67:33

Female vs. Male ratio of transactions: 55:45

Female vs. Male ratio of revenue: 62:38

Revenue target - Rs 300 cr for 2014-15

Employee strength: 200

April 12- Mar 13

April 13 - Aug 14

CARATLANE CASE STUDY

Top 10 Cities:• New Delhi

• Bangalore

• Mumbai

• Hyderabad

• Chennai

• Pune

• Kolkata

• Noida

• Ahmedabad

• Gurgaon

Brand Objectives:Women are a majority of our visitors. However conversion rates are lower for women. Women buyers however are more profitable as they tend to buy higher value products. They also buy more diamond and gemstone products which have better margins, compared to men who buy gold coins which are a commodity.

• How do we increase conversion rates for women and get more women to consider buying jewellery online?

There is also a significant difference in the age group of those buying from CaratLane, vs. typical age profile of customers who buy from retail jewellers.

• 80% of CaratLane customers are in the 18 to 34 age group.

• However for retail jewellers, our estimate is that only 20% of orders are from customers below 35 yrs of age. Revenue share is even lower. That indicates that there is a significant opportunity to tap into customers over 35 yrs. How do we increase our orders and revenue mix from customers over 35 yrs of age.

Specific Deliverables:Identify the drivers for shopping jewellery online. What should be our offerings (Products/ Services) to the above segments?

Prepare a sharp marketing plan with communication and media strategy, including metrics to measure success.