“For jewellers, it builds stability of revenue without having to change communication to consumers frequently. It is a sales strategy in that sense, but it is a win-win.”
Large, organiZed retailers are better placed to navigate volatility, as they can procure and hedge at scale. “Organized jewellery retailers are also into more sophisticated merchandising, but a lot of unorganised retailers cater to celebration wear or occasion wear. These consumer use cases are typically sold as per the day rate, and back-to-back orders to buy gold enable the jeweller to maintain margins,” Singhal noted.