Presentation by SHRENUJ Heritage Innovation Passion.
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Presentation by SHRENUJHeritage Innovation Passion
AGENDAHeritage Innovation Passion
Brief introduction to SHRENUJ.
Distribution channels in United States.
Profile and strategies of each distribution channel
BRANDS VIRTUAL LARGE RETAILERS INDEPENDENTS
Consumer preferences while buying.
GROUP HIGHLIGHTSHeritage Innovation Passion
SINCE 1906… Over a century of trust and relationships.
MINE TO MARKET Presence across diamond, jewelry and retail
verticals. Direct rough supply from mines. 8 diamond and jewelry manufacturing facilities. Global service thru 13 distribution offices.
PUBLIC LISTED CORPORATION
2011 revenue in excess of half a billion $
Our philosophy of collaborative working and personalized service has been the key to our
success.
Direct Sourcing
DTC – India and Botswana
Alrosa – Russia
Aber & BHP – Canada
Rio Tinto – Australia
Manufacturing
• Factories in Mumbai , Surat and Botswana
• Mumbai and Botswana manufactures the high value pointers.
• Surat manufactures the small sizes.
Distribution
•Offices in •Hong Kong-
Shanghai•Dubai •Antwerp – Italy
•We specialize in large sizes from 0.20pts upto 3ct size.
DIAMOND VERTICALHeritage Innovation Passion
ManufacturingFactories in India, Botswana and China.
Distribution offices in Germany France Dubai USA
Private Labels• 10 well established and distributed private labels.
• Several patented multi-faceted diamond cuts.
• Patented ‘EMBRACE’ setting.
• Unique alloy program for Infinite ROI
Retailing• 180 shop in shop in India under the name ‘DITI’ which means BRILLIANCE in Sanskrit
• 6 ‘JOLIESSE’ stores in Hong Kong
JEWELRY VERTICALHeritage Innovation Passion
JEWELRY VERTICALHeritage Innovation Passion
POSITIONING
VISION
To be recognized as a merchandiser and marketer of customized ‘private labels solutions*’.
* Private labels are innovative merchandising and marketing solutions with emphasis on creating perceived value.
JEWELRY VERTICALHeritage Innovation Passion
DISTRIBUTION CHANNEL IN US
Distribution channels in the US
BRANDS
LARGE RETAILERS VIRTUAL
INDEPENDENTS
Jewelry brands Lifestyle brands
Specialty Jewelers National chains Regional chains
Multi-product retailers Department stores Clubs Discounters
TV Internet jewelers Internet resellers Mail-order houses Catalogues houses
Progressive Buying group members Mom and Pop
Comparison of the different distribution channels in the US
Comparison
Brands Virtual Large retailers
Independents
Point of sales
(Approx)
1,000 Not applicable
8,000 22,000
% of US retail
market
13% 7% 45% 35%
Retail market in Billion $
8 billion $ 4 billion $ 25 billion $ 19 billion $
10 x retail margins
0.2 x retail margins
FASHIONCLASSIC
Brands
TV
Jewelry chain
stores
Internet
Independents
Discounters
Comparison of the different distribution channels in the US
Clubs 2 x retail margins
Dept.Stores
BRANDS
Comparing some of the BRANDS
Brands Margins
Type of jewelry
Jewelry Brands
Harry Winston Van Cleef & Arpels
6 x Exclusive pieces.
Jewelry Brands
David Yurman 7 x Fashionable
Jewelry Brands
Pandora 10x Silver (Latest Emerging brand)
Jewelry Brands
DeBeers in collaboration with LVMH
10x Fashionable and classics
Lifestyle Brands
Cartier 10 x Classics
Lifestyle Brands
Bulgari / LVMH/Chopard 10 x Fashionable
Lifestyle Brands
Tiffany 10 x Classics, fashionable
Many lifestyle brands developing jewelry collections over the last few years.• MontBlanc• Hugo Boss• Omega • Rolex
VIRTUAL RETAILERS
Comparing the different VIRTUAL channels
Channels
Margins
Consumer
profile
Product Costs of
operation
Status
TV 3 x 55 yrs + Unique, linked to a story. Mainly for Colored stones jewelry, Difficult to sell diamond jewelry
High, TV time
Stable
Internet Resellers
1.5 x 25 – 45 yrs Closeouts Low Not doing well in jewelry
Internet Jewelers
1.5 x 25 – 45 yrs Basics, closeouts, Fashion
Low Good growth but long gestation period
Mail order
2.5 x 55 yrs + Fashionable Print and mail costs high
Dying distribution channel
Catalogue
2.5 x 55 yrs + Fashionable Print and mail costs high
Dying distribution channel
Few of the top VIRTUAL retailers
TV Internet resellers
Internet Jewelers
Mail order - Catalogue
QVCQvc.com
Amazon.com Blue Nile
bluenile.com
MBI
HSNHsn.com
Overstock.com Gemvara
Gemvara.com
Shop NBC James Allen
ww.jamesallen.com
VIRTUAL – InternetOpportunities and Challenges
Opportunities Maximize inventory turn as same item on several virtual stores at one time.
Can use manufacturer’s inventory without owning it -> Infinite ROI Lowest operating costs amongst all virtual channels. Can provide a customized experience.
Challenges Cannot provide the branding experience or the touch/feel. Lack of personalized service. Product quality maybe questionable. Predominantly limited to closeouts, basic jewelry and loose diamonds.
Price is one of the main motivators for the consumer. No consumer loyalty.
VIRTUAL – InternetCustomization features
Provides an experience to the consumer to design their product – gives them a feeling of having something DIFFERENT.
LARGERETAILERS
Comparing the different LARGE RETAILERS
Channels Margins Stores Product Service
National jewelry chains
2 x Free standing and in malls
Large variety, several private labels
Trained jewelry staff
Regional jewelry chains
2 x Free standing and in malls
Large variety, beginning to add private labels
Trained jewelry staff
Department stores
2.5 x Shop in Shop Private labels, less generic product
Good
Clubs 1.25 x Showcase in free standing stores
Generic classical styles Low
Discounteers 1.7 x Showcase in free standing stores
Generic promotional product
Low
Few of the top LARGE RETAILERS
National
Jewelry
chains
Regional
jewelry chains
Department Stores
Fine jewelry
Department Stores
Clubs Discounteers
Zales
1000 stores
Riddles
50 stores
Macys
850 stores
Saks Fifth Avenue
61 stores
Sams Club 602 stores
Walmart8920 worldwide stores
Sterling Jewelers1200 stores
Meijers
180 stores
J C Penney
700 stores
Neiman Marcus
42 stores
Costco
592 stores
Nordstorm Rack
110 stores
Fred Meyer
550 stores
Rogers and Holland50 stores
Nordstorm
117 stores
Bloomingdales
41 stores
Ross Dress for Less1037 stores
LARGE RETAILERSOpportunities and Challenges
Opportunities Grow internet sales as the customer can also see the product in the store.
Expansion of private labels especially in branded/specialty diamonds. Buying direct from the manufacturers. Capturing market share from independents as they provide a better value proposition.
Challenges Lack of personalized service. Inflexibility in changing retail prices as gold/diamond prices remain volatile.
Margins under pressure. Slow to catch the design trends. Mostly located in shopping malls, where consumer traffic seems to be dropping.
Strategies ofLARGE RETAILERS
Channels
Strategies to grow
National jewelry chains
Developing their own internet websites. Provide the customer with the ability to go to stores to see the product.Expanding designer and private label assortments.
Regional jewelry chains
Expanding designer and private label assortments.
Department stores
Remodeling stores, reducing lower price points and tying up with fashion celebrities to create a branded experience for the shopper.
Clubs Flat, no growth. Struggling to provide a value proposition as diamond/gold prices are climbing
Discounters
Flat, no growth. Struggling to provide a value proposition as diamond/gold prices are climbing
INDEPENDENTRETAILERS
Classification of INDEPENDENT RETAILERS
CLASSIFICATION
by Revenue
Revenue per store
Location Product Status
PROGRESSIVE – GUILD STORES
4m$ + Urban cities Top brands, private labels
Growing, ability to buy direct at shows. Attracting the best brands
LARGE 2m – 4m$ Smaller urban and Private labels and large assortment of fashion product.
Growing with having private labels.
MEDIUM 1m – 2m$ Small urban and rural towns. Members of buying groups
Private labels, less generic product
Losing sales to large independents.
SMALL Below 1m$
Rural towns Generic product, mainly rely on service
Struggling
INDEPENDENT RETAILERSOpportunities and Challenges
Opportunities Alloy programs: Achieve same sales revenue with lower inventory.
Buying direct at shows from manufacturers. Customization especially in bridal jewelry. Joining buying groups to have access to large vendors, despite their individual buying maybe small.
Private label expansion.Challenges
Succession. Mom and Pop stores are family run. Drawing consumer traffic as their marketing budgets are small. Prices will always be higher than large retailers. Have lost their loose diamond sales to the internet.
Strategy of INDEPENDENT RETAILERS
Strategies to grow
Developing their websites with the help of wholesalers to attract younger shoppers
Expanding designer and private label assortments. Providing customization.
REDUCING PURCHASE PRICE BY: Joining buying groups to have access to large vendors. Going to jewelry shows to buy direct
REDUCING INVENTORY: Alloy programs giving them access to large variety of product with minimal inventory commitment.
CONSUMERPREFENCES
Consumer preference and how the distribution channels rank
Purchase indicators
How they select
% Large retailers
Independents
Virtual retailer
s
Product relateD
Differentiation - Variety
40%
2 1 3
Product related
Ability to customize
20%
3 1 2
Value proposition
Price and terms 20%
2 3 1
Service related
Personalized service
10%
2 1 3
Product related
Product quality 5% 2 1 3
Service related
Sales staff knowledge
5% 2 1 3
top related