With the opening of its tenth brick-and-mortar store, Caratlane has grown from being a sole online retailer of diamond and fine jewellery to a challenger, knocking on the doors of some of the biggest players in India’s massive offline jewellery market
On the eve of the opening of Caratlane’s tenth store and its first in Chennai, I had the opportunity to catch up with its founder-CEO, Mithun Sacheti. We’ve already come to expect ‘different’ from the brand and I note that its physical presence lives up to the billing, much like when you meet that friend you’ve been chatting with online, face to face, and are pleasantly surprised by the instant connect. There’s a transparency in the way Caratlane functions as a business and this attitude is reflected by the interiors as there’s a deliberate use of white space that inspires ease. The wares aren’t caged behind glass and I can pick up just about anything that catches my eye without a sales person breathing heavy; that’s a true difference.” We don’t follow a set format for our stores across the country but the commonality is presenting the touch and feel to the customer,” says Sacheti. He adds that while some have voiced concerns over pilferage or damage, he was clear that if the consumers were willing to trust the brand, you have to trust them in return.
It’s this clarity in thought, approach and execution that has helped Caratlane grow from being a sole online retailer in 2008 to an entity that is challenging the big boys in this space. Today, India’s jewellery market is estimated at Rs. 2,00,000 crore and a FICCI AT-Kearney study suggests that number will touch close to Rs. 5,30,000 crore by 2018. And as things stand only one per cent of this market is ready to buy online. By his own admission, Sacheti says that’s a fair enough market to sell to, but the company decided to reach out to a much larger audience with its online-offline format and established its first ‘solitaire lounge’ in New Delhi in April 2012. Interestingly, one of the brand’s big draws is its ASP (average selling price) which is markedly lower than that of its competition. While going the offline route, Sacheti and team had to carefully consider the business model to continue to accord its consumers a cost advantage. I quiz him about meeting this challenge and he explains that the company decided to reinvent its business model to shift focus from inventory to shine the spotlight on marketing and merchandising. This also means that Caratlane has a good understanding of consumer requirements, a sharp edge when it comes to keeping things fresh with new launches nearly every two weeks and a strong distribution system to keep things fluid. The company invests up to 20 per cent of revenues on its marketing efforts and uses a mix of mass media and digital to spread the good word.
Where metric matters
Sancheti takes the time to explain Caratlane’s metric-based approach in detail, “If we expect to do revenues of about Rs. 15 crore from a store, we ensure that at any point in time, the inventory at that store does not exceed Rs. 1 crore.” How the company makes this happen is by prototyping most of its jewellery on display. While the fast moving pieces are typically available and ready to ship, if a consumer places an order on a prototype, the central warehousing system ensures a delivery timeframe of 48 hours to 72 hours. “For the two-three day wait period we offer the consumer a 20 per cent discount,” says Sacheti. What I’m keen to know and understand is how the brand’s offline presence has impacted sales online. Sacheti shares an example of how Caratlane’s opening of a store in Whitefield pushed up online sales conversion by 30 per cent from buyers in this region. “It’s sad that in India we’re still some time away from geo-targeting a locality or even a city but that day will be here soon,” says Sacheti while adding that the next step for the company would be to connect online and offline and create an omni-channel experience where, for instance, you look at jewellery online and there’s information on its availability at a store that’s closest to you.
In fine detail
For Sacheti, home is where Caratlane is and that’s how he wants his consumers to think about the brand’s stores. As we sit on pristine white sofas with throw cushions in Caratlane’s purple, I notice a large empty space towards the back. He catches me looking and shares his ideas for the space which include setting up a kitchenette, a play area and a lounge with a home theatre system. “We want to create an interactive space which brings some joy into jewellery buying,” he says.
While the look of the store is certainly inviting a lot can be won or lost by the people manning it. And this is where Sancheti insists that Caratlane invests a good deal of time and money on training the people that represent its brand. “We’re soon going to roll out a training module which is a 60-day module and its mandatory for anyone who joins the team. There’s a meticulous level of paying attention to detail, including role play, predicting plausible sales scenarios and more,” shares Sacheti while stating that hiring right continues to be a huge challenge. Even when things go wrong, and he admits that one per cent of the transactions do go awry, Sacheti looks for ways to bring the affected consumer back. That’s the sort of learning he wants to impart to his team to take the brand forward.
In January 2015, Caratlane received Series-D funding to the tune of US$ 31 million from existing investor, Tiger Global. This round makes it one of the most funded companies operating in this space. “We intend to use this money to expand our retail footprint and by the end of this calendar year we aim to hit the 20-store mark,” says Sacheti. Of this 20, the company will focus on building brand presence established in places like New Delhi and Bengaluru while also exploring newer Tier-II cities such as Chandigarh, Indore and Pune. “Some of these stores will be our testing stores to see if some of our offline story will work in the Tier-II regions,” adds Sacheti. There was a lot of chatter earlier in the year about Titan (Tata Group) buying a 15 per cent stake in the company but Sacheti is tight lipped about developments or the lack thereof.
Caratlane is also looking at increasing its product categories to include bridal jewellery. Interestingly, Sacheti explains that bridal, in the brand’s context, would mean dressing up everybody but the bride! “Today, we’re not yet there for the bride and that’s about three paces up the ladder,” he adds. Sacheti is rather confident that, over the next five years, Caratlane is ready to create a dent in the business of the bigger players. “We hope to teach a whole lot of people the art of discovery while we are at it,” he says as we draw our chat to a close.
LEARNING FROM THE PAST
Mithun Sacheti spent over a decade taking the family business (Jaipur Gems) from Chennai to the rest of India. He shares some of his learnings from his time spent in the fold.
Service is everything. Jewellery is a very personal business so extrapolating personal information to encourage a sale is important.
Creating a design ethos that holds appeal at a smaller price point, that was a big take away.
|Solely an online retailer||Went omni-channel with 10 stores across 7 Indian cities|
|Focus on solitaires||Product categories expanded to include gemstone jewellery and gold coins; may expand to wedding jewellery|
|Self-funded||Series-D of US$ 31 million from Tiger Global, overall investment US$ 50 million|