Shoot for the Cut

Is being a renowned brand enough to develop new markets or achieve growth and expansion in existing ones? In the Retail jewellery sector, these feats are not easy even for established brands and businesses. Even a renowned jewellery brand may find it difficult to pull off with the same set of value propositions in another part of the same city or state, let alone in another country. Failing value propositions fails business models. So, what falls short in value propositions which have proved to be successful elsewhere?

Jewellery is a product in which the content and design preferences of customers strongly vary from place to place. Putting it more precisely, the choice of jewellery is strongly governed by the culture and tradition of the land. The element of personalisation comes after that. At least, this is the general pattern. If the local choices and preferences are not taken into consideration, default offerings are not going to be enough. This is where the concept of hyper-localization chips in.

Hyper-localisation is a retail strategy following which brands and businesses seek to align with a locality-based market environment. It helps them curate their offerings and experiences to meet the needs and preferences of highly specific, local markets. Hyper-localisation jumps past the borders of traditional localisation by focusing on regions, cities, neighbourhoods, and sometimes even stores.

Kalyan Jewellers, one of India’s leading fine jewellery brands with a presence in the Middle East, is often looked up as a role model in mastering the art of hyper-localisation.

Suppose that you are the business owner of a retail jewellery store. Say you intend to open another branch in another part of the city where the demographics are slightly different. Adopting a hyper-localisation retail strategy would demand that you customise the marketing, operations and other aspects of the intended new store to meet the specific requirements of the new market environment with an in-depth understanding of the hyper-local consumer behaviour.

How Hyper-Localization Helps Retail Jewellery Brands

Seven ways in which hyper-localisation helps retail jewellery brands and businesses establish local distinctiveness to win the hearts and minds of local customers are discussed ahead in this blog.

Resonating with Local Customers

Attracting customers and generating footfall is one of the foremost challenges for businesses after coming into existence. This is where planning and strategies collide with reality. The responses from competitors make these preparations more vulnerable to ineffectiveness. For example, value oppositions offered by a new business are countered by its competitors by making improvisations in theirs. Even if competition is mild, breaking the buying behaviour of customers and drawing them to a new store is not easy. This is where hyperlocal retail strategy helps and it must come as a part of the early business planning stages; adopting it later is difficult and less effective. Focusing on hyper-localisation helps retail businesses find avenues to resonate with local customers in local markets. In the context of marketing and branding, resonance is how customers relate to brands. For example, when we think of buying any sports fashion merchandise, brands like Adidas, Nike, or Reebok readily come to our minds without much effort. These brands have worked for decades to achieve this kind of resonance with customers and their needs. The stronger this resonance is, the higher the chances of winning the attention and interest of customers and drawing them to a new store. This applies to retail jewellery businesses and brands as well; they find the dots of connecting and resonating with local target customer segments concerning their individual stores or clusters of stores. This also affects the elements of in-store experience and store layout planning.

Offering the Right Products

While standard, play-safe merchandising is a safe place to start with this approach becomes ineffective with the passage of time. Try it for too long and this approach will begin reflecting shortcomings in understanding local market demand and consumer behaviour. For starters, there is a need to stay tugged with the changing tastes and preferences of local customers. Competitors with relevant products consistently on their shelves never fail to attract and retain customers. The emergence of new brands and products also necessitates that shelves are updated with such changes; it adds relevance in retail. This reasoning is also applicable to retail jewellery brands and businesses. In hyperlocal retailing, identifying what products should be offered leans on local markets, local customers, and local jewellery trends (read fashion). This lends precision to the merchandising strategies of individual stores of a brand. Hyperlocal merchandising is tuned to meet the needs and priorities of a specific base of customers of a locality or neighbourhood, as against a generalised, fit-for-all merchandising strategy. Being a big brand is something but being a brand that offers what local customers need is bigger than that.

Localised Advertising and Promotions

Online or offline, the accuracy of targeting is an inherent challenge in running advertising and promotional campaigns. One of the causes for this is the generalisation and vague definitions of target audience groups. For example, if a target segment is identified as people in the age group of 30+ years with certain generic search patterns, the advertisements still end up on the social media feeds of thousands of users who have no reason or motivation to buy the promoted product or service. The same holds for physical means of advertising like the use of billboards and print. People do not buy jewellery because of ads; it is a conscious and planned activity. This is why search and purchase intents are important in the business of jewellery. Marriage seasons, personal events, and festivities also influence jewellery purchase decisions. So, ill-timed campaigns also play spoilsport. The end result of these is ads not reaching the right audience at the right time bringing down the ROI of advertising and promotions campaigns and resulting in high CAC. Hyperlocal retailing provides an edge here. Because the focus is on a very small base of potential customers and a smaller geography, it is easier to define target segments and markets with more parameters. The scope of the study is reduced and consumer behaviour and market characteristics can be analysed more deeply and comprehensively. The better the knowledge of customers and markets is the better the chances of effective communication through advertisements and promotional campaigns.

Localised and More Effective Personalisation

Similar to how hyper-localisation lends additional efficacy to advertising and promotional efforts, hyper-localisation also helps retail jewellery businesses and brands get better with their personalisation campaigns.

Personalisation is something difficult to win over. Most personalisation attempts fail to elicit the desired response from target customers. Even the big retail and eCommerce brands do not get it right the majority of the time. Lack of sufficient and relevant data combined with flaws in predictive analysis are the roots of the problem here. Online or offline, without data and insights, it is difficult to draw a future trail connecting past behaviour with future actions.

The leverage of hyper-localisation is that it reduces the scope of assessment to neighbourhoods or small localities. It permits a more elaborate and detailed analysis of consumer behaviour and other benchmark measures of marketing. Human judgement combined with data and analytics help come up with more accurate behavioural patterns supporting the efforts of personalisation in retail and eCommerce.

Customisation of Operational Capabilities

While hyper-localisation is often associated with marketing it can touch other important business functions like operations, HR, administration, and finance as well. The essence of hyper-localisation is to align a business with its immediate local market conditions. Once the requirements of this alignment are understood and established across all business functions, it sets the platform to eradicate waste and redundancies from business processes and operations. Retail store SOPs play a big role in achieving such objectives.

For example, different parts of cities have different closing hours of business or the usual hustle-bustle. Retail stores tend to follow the timelines of the locality in which it is located. Whether it is called as such or not, that is a manifestation of hyper-localisation. This allows retail jewellery stores to close their operations for the day earlier than their counterpart branches in other locations in the same city. This leads to the saving of resources like electricity. The scope of maintaining work-life balance is also better when employees can leave early. The flip side to it is that such stores also open earlier. In the bigger picture, hyper-localisation helps businesses align their operational systems to the standards and requirements of local markets.

Customer Loyalty in the Long Run

Hyper-localisation is a long-term solution to build and sustain customer loyalty. When hyper-localisation is consistently followed and maintained over the years, it creates consistency in the delivery of values – values that are relevant to local customers. The repeat and sustenance of positive experiences make the decision to stick to a retail brand or business easier for customers. This decision is nothing but a manifestation of brand loyalty. This works for customers because they also seek consistency in the value propositions offered and how these values are delivered to them. For a retail jewellery brand, these values are the availability of trending and popular designs, quality of work, product certifications, quality of stones and metals, price, adherence to regulatory norms, availability, warranty, modernisation, etc. concerning local markets and customers. Hyper-localisation demands a more specific, localised understanding of consumer behaviour. If it is maintained, it also helps ensure the return of customers which in the long run takes the form of brand loyalty.

Getting Ready For Future Business Expansion

Getting good at planning and implementing hyper-localisation helps retailers in their future business growth and expansion projects. This applies to retail jewellery brands and businesses as well. It gives them the experience and expertise on how hyper-localisation works best for their business in the backdrop of different local market conditions. Instead of looking for answers outside, they would have the internal capabilities to hyper-localise their new stores in new locations. Retailers can use the experience and expertise gained from past projects to formulate better hyper-localisation strategies in the future. Lessons learnt may have to be improvised but the foundation to work upon would already be there.

How YRC can help: a glimpse

Market Research

Our local market research reporting presents a detailed analysis of feasibility, demand, sales, channels, competition, pricing, trends, and future propositions for both online and offline markets prepared and curated by a team of experienced retail consultants. The goal is to help retail jewellery brands and businesses derive specific and actionable insights required to come up with effective hyper-localisation strategies.

Business Model Development

In business model development services, we provide assistance to our clients in establishing their business and new retail expansion projects with a strong brand positioning. Here, we focus on discovering and defining the right UVPs for our clients and developing the strategic framework of the value chain and internal capabilities leading to hyper-localisation of business models. This framework maps how the intended value propositions shall be created and delivered to customers in local market conditions.

Business Strategy Consulting

In business strategy formulation, we work with our clients to formulate their business or functional strategies. These strategies help run a retail enterprise in an organised and synchronised manner. The strategies are developed for both core and support functions like sales, operations, finance, HR, IT, marketing, logistics, etc. YRC’s team shall map and define the role of each business function while securing the coordination between these functions towards making the business model work at the local level.

Financial and Commercial Assessments

Financial and commercial assessments help reveal the strength and sustainability of business projects in terms of numbers. These assessments are an important component of business plans. Investors rely on these numbers to make important decisions. Our job here is to review and report the financial and commercial viability of retail expansion projects with a detailed analysis of:

• Capital and initial investments
• Operational costs
• Revenue
• Purchase and inventory planning
• Profit and loss projections,
• ROI and break-even analysis, etc.

SOP Development and Implementation

SOP development and implementation are one of our flagship services. In SOP consulting, we not only develop and implement SOPs for business processes but also work with the bigger goal of helping our clients become process-oriented enterprises separate from people-dependent business systems. Our SOPs establish operational standards and routines, help maintain consistency in performance, and eliminate loss of productivity. For example, we offer robust SOP solutions governing the process of local supplier selection and onboarding.

CX Strategy

Delivering superior customer experience is essential to succeed at hyper-localisation. It is one of the vital fighting fronts for retail brands to woo local customers and establish themselves as a local brand. In CX strategy, we map the customer journey and identify the physical and digital touchpoints that involve customer-company interaction and the customer decision-making process. Our experienced team provides insights on how CX could be improved throughout the customer journey starting from need realisation to post-sales support. In formulating localised CX strategies, we take into account factors like local recruitment, training, culture and tradition, use of technology, layout planning, SOPs, budgeting, sustainability, etc.

Franchise Consulting

Hyper-localisation is a commonly occurring requirement in franchising. When retail brands give out franchising rights, they also need to devise strategies to succeed in local market conditions in a different city, state, or country. This responsibility could also be on the shoulders of franchisees. At the end of the day, a non-local brand must resonate with local customers as a local brand under local market conditions. Achieving this localised resonance is important in retail jewellery business. In the backdrop of franchising, it becomes even more important to focus on hyper-localisation. In franchise consulting, we assist in formulating expansion strategies, preparing the franchise business plan, mapping the partner search activities, drafting the franchise legal papers, developing the franchise operations SOPs, and defining the audit processes.

Quick Recap

In the jewellery market, the content and design preferences of customers are strongly governed by culture and tradition. If the local choices and preferences are not taken into account, default offerings fall short of being enough to woo local customers. This is where the concept of hyper-localization comes into the picture. Hyper-localisation is an adjustment strategy following which businesses seek to align with a local market environment. It helps them customise their offerings, experiences, and working systems to meet the needs, preferences, and constraints of a local market.

Focusing on hyper-localisation helps retailers find opportunities to resonate with local customers. Hyper-localisation makes merchandising more accurate for individual stores. As hyper-localisation calls for limited focus confined to small local markets, it is easier to analyse and define consumer behaviour and market characteristics to more comprehensive levels. This helps come up with more effective localised promotional and personalisation campaigns. Hyper-localisation is also applicable to other business functions like operations, HR, administration, and finance with the same objective of alignment with local market conditions. In the long run, consistency in the efforts of hyper-localisation helps build and sustain customer loyalty. Getting better at hyper-localisation provides valuable business-specific experience and expertise for future retail expansion projects. These advantages make hyper-localisation a popular strategic manoeuvre among retail jewellery brands and businesses.

To know more about how we can help your business with hyper-localisation or for enquiries on other retail business solutions or to speak to one of our expert retail consultants, please drop us a note and we will quickly reach out to you.