IDEX India Jan 2011 No Hindi

January 2011

Cover StoryOutsource And CompeteThe jewellery retailer’s new mantra

Special ReportImpulse Buying – The Growing Sales Driver

FocusRe-inventing The Shopping Experience For Jewellery Consumers

Market ReportHot Trading, Shortages Keep Diamond Prices Strong

magazine india retail

CompeteoutsourCe

And The jewellery retailer’s new mantra

2 IDEX MagazInE – InDIa REtaIl | nO 02

J ANUARY

Contentsmagazine india retail

05 FROM THE EDITOR’S DESKCoping With a Sea Change

06 MUMBAI DIAMOND MARKET REPORTHot December trading, Shortages Keep Prices Buoyant

10 SPECIAL REPORTImpulse Buying – the growing Sales Driver

16 SPOTLIGHT‘What Is the Price Of a Red Car?’ Educating consumers & instilling confidence in diamonds

21 FOCUSRe-inventing the Shopping Experience For Jewellery ConsumersCombining bricks-and-mortar with the internet helps firm rise from ashes

24 COVER STORYOutsource and Compete The jewellery retailer’s new mantra

37 DIAMOND RETAIL BENCHMARKa diamond price list to assure your customers

42 GOING MOBILE

48 POLISHED DIAMOND PRICES

51 RETAIL ET CETERA

56 US MARKET WINDOW

8 HINDI MARKET REPORTMk;e.M m|k sx dk s f o’okl d h ryk’ k

14 HINDI SPECIAL REPORTMk;e.M m|k sx dk s f o’okl d h ryk’ k

19 HINDI SPOTLIGHTMk;e.M m|k sx dk s f o’okl d h ryk’ k

32 HINDI COVER STORYMk;e.M m|k sx dk s f o’okl d h ryk’ k

THE ONLY GLOBAL, REAL-TIME, NEUTRAL DIAMOND MARKETPLACE. GO TO WWW.IDEXONLINE.COM

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J ANUARY 2 0 1 1VOL. 1 No. 02

EDITORIAL DEPARTMENT EDItOR-In-CHIEF Vinod Kuriyan

EDItORS Edahn Golan, Danielle MaxIDEX OnlInE RESEaRCH Ken Gassman

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IDEX MagazInE – InDIa REtaIl | nO 02: EDItOR 3

From the Editor’s Desk

H aving remained unchanged for millennia, the Indian gem and jewellery retail industry has gone through a series of changes in the

last decade or so. Changes so profound, they have left many industry veterans uncomprehending and unable to cope. But understanding and adjusting to these changes is vital for any retailer wanting survive and thrive into the future.

The single biggest change is in assessing and defining the retailer’s role in the marketplace. With each passing day, it is becoming less relevant for the retailer to be many things rolled into one. Today, he would do well to stop trying to be both a bullion dealer as well as a manufacturer and concentrate instead on just one thing – understanding and servicing his customer to a level he has not before.

This is something many veteran retailers, who have succeeded in the Indian consumer market hitherto, find very difficult to accept. It takes a major leap of faith to appreciate that a specialist manufacturer also understands the tastes and demands of one’s customers and is able to come up with a product range that will cater to them. But as many retailers will tell you, letting go of manufacture is probably the best thing you could do.

In today’s fiercely competitive marketplace, those who understand their customers’ tastes and desires, provide the widest range of choices to cater to them and a whole raft of assurance programs that instill confidence in the product and its valuation, are going to be the survivors. Those who don’t will be history. It is literally as stark as that.

Today’s jewellery retailer is not just competing against other jewellery retailers. A whole range of other luxury products with a set of value propositions that resonate well with the desires and aspirations of today’s consumers are aggressively competing for a slice of the disposable income pie. The changes that we look at in this issue

reflect the jewellery retail industry’s organised response toward better countering these new threats.

And while the retail industry has changed, the retailer has to also appreciate the fact that the consumer and the drivers that impel jewellery buying have also changed. While they might not command as high unit prices as the more traditional bridal and festival market segments do, impulse purchases of jewellery have grown exponentially and for many retailers today, are one of the lifelines that sustain them in the many ups and downs of today’s unsteady economic situation.

Even if one adopts to the new methods of sourcing product and positioning it to cater to the new sales drivers, one needs to ensure that the product itself enjoys a rock solid confidence with the consumer. Assurance programs are an essential part of the retail game today. And this assurance increasingly has to come from independent third parties and not the retailers themselves.

The successful retailer today is one who offers his customer the widest possible range of choices in terms of product design and styling as well as options in price points, gets a third party to examine and certify the product and stands behind even after it has been sold. The push to meet all these criteria is what has triggered the many changes in the industry.

It stands to reason that embracing these changes is not an option at all but an imperative. This issue’s selection of articles is designed to help the industry both understand and better adopt these changes as well as giving some insight into the new impellers that drive jewellery sales today. ■

Coping With A Sea Change

Vinod KuriyanEditor

4 IDEX MagazInE – InDIa REtaIl | nO 02: MUMBaI DIaMOnD MaRKEt REPORt

Mumbai DIaMOnD MaRKEt REPORt

T he Mumbai polished diamond market saw very good activity all the way through to the end of December – much better than

what anybody expected. Demand was very good for all sizes and categories of diamonds. But goods were in short supply all around and buyers had very limited choices. Due to this, prices moved noticeably upward, with buyers unable to resist them any more (there had been strong resistance to price rises in November, just after Diwali). Today, buyers simply have to pay more for what they want, even though there is room for some negotiation and sellers don’t necessarily get whatever they ask for.

Strong domestic demand was the main driver for the market, though Christmas demand from

overseas buyers was also good. Due to the shortages, however, overseas buyers stayed longer than they expected in the city and finally bought something or the other before leaving. The shortages are expected to continue through to January, when new production is expected to come onto the market. It is going to remain a seller’s market until then.

Though not entirely favourable, the dollar-rupee exchange rate was nonetheless stable, with movements remaining within a 2 percent band up or down. This allowed trading to go ahead unfettered, unlike in previous months, when large swings kept a nervous market at low volumes. ■

Hot December Trading, Shortages Keep Prices Buoyant

5MagazInE – InDIa REtaIl | nO 02: MUMBaI DIaMOnD MaRKEt REPORt

Size in Ct. (Sieve) Comments Forward Call

▲ -0.01 (-2 ) Very good demand for SI+ goods.good demand for lower piqué goods. Overall very good demand across the board.

Shortages will continue in near future. Prices are on the rise, will go up by 2%-4%.

▲ -0.02 (+2-6.5) Very good demand for SI+ goods.good demand for lower piqué goods. Very hot category.

Shortages will be severe due to increasing demand. Prices will go up by 2%-4%.

▲ 0.03-0.07 (+6.5-11)

Very good demand for SI+ & lower piqué goods. +8 sieve is the most required sieve, demand improving for -8 sieve.

Overall demand will remain stable. Prices will go up by 2%-3%.

▲ 0.08-0.14 (+11-14) Very good demand for piqué goods.good demand for SI1+ goods.

Shortages will be felt. activity will remain stable.

▲ 0.15-0.17 (+14-15.5)

Very good demand for piqué goods.good demand for SI1+ goods.

activity will remain stable with shortages of goods.

▲ 0.18-0.22 (1/5) Fair demand for SI1+ goods. Overall low activity will be seen in this category.

▲ 0.23-0.29 (1/4) good demand for VS+ & piqué goods.Demand for VS+ goods is mainly for local market.

activity will remain stable.

▲ 0.30 (1/3) good demand for VS+ & piqué goods.Demand for VS+ goods mainly for domestic market. g-J colours in greater demand.

Demand & prices will remain stable.

▲ 0.40 (3/8) good demand for VS+/g-J col.Demand for this category is mainly for local market.

Demand & prices will remain stable.+0.45 carat will be difficult to find.

▲ 0.50 (1/2) good demand for I2+/J+ col. Overall good demand across the board.

Demand & prices will go up. Better demand can be seen for D&F col.

▲ 0.75 (3/4) good demand for I1/I2 & VS+ clarity. +0.80 carat in more demand.

Shortages will be seen for +0.90 carat.

▲ 1.00 (4/4) Overall very good activity across the board. Shortages seen in premium sizes.

Severe shortages will be seen for H lower col. Prices will go up by 2%-3%.

▲ +3.00 Fair demand for SI1+/ H-K col.Demand for VS/J-K col. increasing in +5 carat sizes.

Better demand & activity is expected.

M U M B a I D I a M O n D t R a D I n g I n D E C E M B E R

Special Report

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E ven in the 21st century, the vast majority of jewellery sales in India is driven by events — weddings, festivals, anniversaries and other

milestones. A major factor in the consumer’s assessment of jewellery is still its intrinsic value — even when one is looking at relatively low-cost product. Given the combination of event-driven purchase impellers and the need for the product to act as a storehouse of value, most jewellery purchases in India are carefully thought out, with the actual purchase decision taking a fair amount of time to be reached, say many industry insiders. According to them, a relatively small proportion of sales is driven by impulse — a purchase because a customer liked what he or she saw and wanted to have the product immediately.

Pratap Kamath, CEO of Abaran Jewellery in Bangalore, says, “I would estimate that more than 70 percent of jewellery sales in India are event driven. Events are such a strong impeller that even Rio Tinto, the diamond mining company, is looking at developing a sales model for their diamonds based on events. Also, it is natural that high-value purchase decisions will be taken only after a fair amount of thought. It follows then that most impulse purchases are therefore usually in the lower price ranges, mostly in the Rs.5,000 to Rs.15,000 range and rarely if ever crossing the Rs.50,000 mark.”

According to Kamath, impulse buying hasn’t increased dramatically over the last decade or so, though he does think it has nonetheless, established itself firmly

Impulse Buying – The Growing Sales Driver

By Vinod Kuriyan

naC JEwEllERS

Special Report

9IDEX MagazInE – InDIa REtaIl | nO 02: SPECIal REPORt

in the Indian market — an arena that had almost no impulse sales for millennia.

N. Anantha Padmanabhan of NAC Jewellers in Chennai, however, states emphatically that the reverse is true, that impulse sales are what keep jewellery outlets going every day. “We’re surviving on impulse sales,” he notes, adding, “without them, half the jewellery showrooms around the country would have shut down by now!” Padmanabhan estimates that impulse sales account for between 30- and 40 percent of his total sales.

“Impulse buying is something that has grown in almost every consumer sector,” Padmanabhan notes. “Some years ago, I too would normally go out to buy myself new clothes only at Diwali or some special occasion. But today, the variety of choices and the range of product have changed the way I think. I’m likely to go out and buy myself a new shirt at any time of the year, should I feel like it. This is exactly what is happening in the Indian jewellery market. The range and variety of product available today has nudged the Indian consumer away from being an occasion-driven buyer only to one who is liable to make a purchase at any time, should the urge to buy strike him or her.” He too notes, however, that impulse sales are usually in the lower price ranges, with the more expensive product being bought only after a fair amount of thought and planning.

IndIa Hooked on IntrInsIc ValueAbaran’s Kamath observes that like it or not, the Indian jewellery industry is hooked on the consumer’s demand for high intrinsic value in the product they buy. “The

Indian consumer’s demand for high intrinsic value is what gives the domestic jewellery industry such staggeringly high volumes,” he notes. “If we were to move away from this model where intrinsic value matters, to something like the models in western countries,” he notes, “we’d see a sharp drop in volumes and overall value.”

Kamath quotes the example of gold jewellery sales in Kerala. “Fully half of all the gold consumed in jewellery every year is recycled from older jewellery. This clearly indicates that jewellery still plays a major role as a storehouse of value and that it is held onto with a strong investment motive as well,” he observes.

This, Kamath says, is why he doesn’t think impulse sales are that big a factor in the overall sales mix. And this, he acknowledges, brings with it a major danger for the future. Tomorrow’s generation is less likely to seek high intrinsic value in jewellery and probably seek other attributes like a higher design quotient. “As an industry, we need to move on from simply depending on intrinsic value and generate a value proposition based on other factors like emotions. De Beers did this successfully with diamonds, making their perceived value lie in their ability to become the symbol of emotional commitment between men and women. Here is where impulse buying could gain importance.”

Even here, however, Kamath feels that event-based buying will still be the underlying framework on which the industry will still rest. “An emotional hook certainly

abaRan abaRan

10 IDEX MagazInE – InDIa REtaIl | nO 02: SPECIal REPORt

has the potential to add to sales, but even with it, the underlying factor will still be an event like an anniversary or a festival. An emotional impulse could however, be a major trigger for jewellery sales over these events.”

It is worth noting here that Valentine’s Day, a very western concept with no traditional grounding in India, was promoted as a jewellery-giving occasion only as recently as a few years ago, but is already one of the fastest-growing sales drivers for low-end, high design quotient jewellery. The emotional value of a beautifully designed Valentine’s Day jewellery gift, more than makes up for its low intrinsic value and has the potential to last much longer than the latter.

The CEO of a jewellery brand, who requested anonymity, observed that as a product category, jewellery is not something that is bought on impulse but a planned buy. “Jewellery is a destination,” he notes. “You walk into a jewellery showroom because you want to buy some, it isn’t like an iPod, which you could snap up on impulse while you were idly browsing through a retail outlet. As a retailer, you can create an environment that is conducive to more impulse-driven behaviour, but the product itself is not something people consider on impulse.”

Much of this difference in buying behaviour, he notes, is due to the fact that even low-priced jewellery is perceived as a ‘precious’ product. “You can walk into a clothing outlet and casually handle suits that retail for Rs.30,000, but a piece of jewellery that is worth just Rs.5,000 is always behind a glass wall in a counter. You are more likely to buy the 30,000-rupee suit on impulse than the 5,000-rupee piece of jewellery. The products themselves dictate buying behaviour.”

steady sellers already exIstMansukh Kothari of Vasupati Jewellers in Mumbai, thinks that while not exactly falling into the category of impulse sales, there are some jewellery product segments that have strong sales all year round, independent of festivals and events. “Chains and bangles are everyday items,” he says, “they sell all year round because they are an important part of a woman’s daily attire. These products sell well in a variety of price points though the most popular products around the country would be those that have have less than 30 grams of gold.”In addition to these steady sellers, India’s still nascent branded jewellery industry, especially the lower-price-point mass-market segment, has definitely made major strides in modifying consumers’ jewellery purchase

abaRan

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behaviour. Mass-market brands by their very nature, exclude themselves from the traditional jewellery buying triggers in India. Positioning themselves in malls and mass-retail chains, with a more casual and immediate ambience, these brands have taken big steps away from the more ivory-towered feel that jewellery has traditionally generated.

“The mass-market brands,” said one high end retailer who declined to be identified, “have a product that is not in the same space as that of most other fine jewellery retailers. I haven’t come across a single customer of mine, who has bought anything at all from the mass-market brands.” At the same time, however, he acknowledges that the buying triggers for the branded mass-market product were much more in keeping with many other non-jewellery product categories that generate sales simply by attracting consumers who might not have come to a retail outlet with any specific intent to buy them. The unique sales proposition of most of these products was not plain utility or value for money, but rather their ability to generate a more diaphanous ‘must have’ feeling in the consumer. That ‘must have’ feeling, he acknowledged, has far better prospects in the long term than dependence on the perception of intrinsic value.

Abaran’s Kamath notes that the domestic jewellery retail industry could well see a change in consumer behaviour in the future where purchases driven by the investment motive are confined to only pure bullion – gold bars and biscuits – while jewellery sales might be impelled by a completely different set of drivers.

There are already signs of this in the marketplace. Observers note that with gold at today’s sky-high prices, there has been a sharp increase in the purchase of gold bars and biscuits, with consumer willing even to pay premiums for biscuits bought from banks in tamper-proof packaging, thus indicating a clear intent to hold the gold for investment. Even purchases from jewellery retailers are seeing some major changes. Where traditionally the jewellery buying decisions have been taken solely by the women in the family, with the elders playing a major role even in purchases for events like weddings, retailers have noted that increasingly, they are seeing the greater involvement of men in these purchases as high-priced gold calls for more hard-headed business decisions for investment.

Conversely, branded jewellery has seen a higher percentage of final buying decisions being taken by the wearer herself, even if she isn’t a family elder. Impulse buying has definitely established itself in the Indian market. ■

n. anantHa PaDManabHan: SavED by IMPulSE buyIng

naC JEwEllERS naC JEwEllERS

SpotlightRoland Lorie

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“Thirteen years ago, there was absolutely no reason to open a diamond and gem-testing laboratory in India,” says Roland Lorie, global CEO of the International Gemological Institute (IGI). “None of the global players – including the biggest Indian diamond exporters – was interested in the Indian consuming market and Indian consumers didn’t know enough to either want or appreciate a gem-testing laboratory’s certificate.”

The situation changed when De Beers targeted the Indian consuming market with its umbrella promotion campaign along with the launch of branded diamond jewellery – a completely new concept in the Indian market at that time. “We jumped into the Indian market along with the De Beers campaign,” Lorie says, “and we certified the De Beers brands. But it took time to gain acceptance.”

Before it opened its gem-testing laboratory in India however, Lorie notes, the IGI realised that it needed to educate the domestic Indian gem and jewellery industry about the scientific basis for assessing and certifying diamonds. So the first thing it did on entering India was to open a gemological school. “It made sense to have an industry that was appreciative of the need for a gem-testing laboratory and certification before actually opening one,” Lorie says. The initiative caught on and IGI’s Indian foray was soon a success.

“But even now, with all the global education and testing majors running teaching institutions in India, the educational thrust in the country is nowhere near enough,” Lorie notes. “India is a huge market and you don’t see anywhere near as much jewellery on people as you do in this country. Yet the consuming public and – much more importantly – the jewellery retail industry know surprisingly little about diamonds.

“Indian consumers know a great deal about gold, its purity and value; but when it comes to diamonds, they are almost totally dependent on the retailer for information and valuation. And when you have a sales person who knows very little about diamonds himself or herself, the consumer ends up with very little confidence in diamonds. A retailer doesn’t need to know as much detail about diamonds as a manufacturer does, but he or she must be

able to clearly understand the product and transmit this understanding to the consumer.”

According to Lorie, this is why the IGI has launched a focussed initiative to educate and train the jewellery retail sales force around the country. “We have taken the initiative a step further with some simple but effective steps. In many retail outlets, we have set up microscopes and the retailer invites the customer to have a look at the diamond himself or herself. This gives the consumer a great deal of confidence and

“What’s The Price Of A Red Car?”Educating consumErs & instilling confidEncE in diamonds

By Vinod Kuriyan

ROlanD lORIE: EDucatIOn Is paRaMOunt

15IDEX MagazInE – InDIa REtaIl | nO 02: spOtlIght

that confidence results in a much higher percentage of store visits being converted into actual sales. Both consumers and retailers are very happy with this simple initiative.”

Still, Lorie reiterates, knowledge about diamonds is woefully inadequate in the Indian consuming market. A huge number of Indian consumers still don’t know that there is no such thing as a generic price for a stone of a given size and that one needs to factor in colour, clarity and cut to determine the stone’s value. “When they learn who I am,” Lorie observes, “I have actually had some people ask me, ‘So how much does a one-carat diamond cost?’ I respond to that question with one of my own – ‘What’s the price of a red car?’ They get the joke and an appreciation of what goes into valuing a diamond.”

Education and consumer confidence, Lorie says, are of paramount importance in the Indian market today. “As an industry, we have to reach out to the consumer and make him or her confident of our product. Which is why we have taken the initiative of opening laboratories in consuming centres like Delhi, Kolkata, Chennai and Trichur. It is much easier to stay focussed on the trading centres – clients can easily give you 1,000 stones at a time. But retailers and consumers need us and our ability to boost confidence as an independent third-party certifying authority. Without the consumers who demand our product and the retailers who sell it to them, we won’t have a business in the trading centres either.”

Beautiful StorehouSe of ValueLorie thinks that in India, the diamond can successfully complement gold as another storehouse of value. “The diamond is one of very few products that are both a storehouse of value – something to consider investing in – and a luxury item at the same time. The fact that it is perceived as something of high value as well as a thing of beauty makes it special as a gift. Women like flowers because they have no utility at all , are beautiful and are given for no particular reason other than the intent of the person giving them to convey an emotion. It’s the same thing with diamonds.”

Lorie thinks the mystique and lure of diamonds has definitely caught on in India. “I see more advertising for diamonds in India than in any other country in the world,” he observes. And this advertising and promotion has a much greater depth than anywhere else in the

world. Typically, it will be the same top global brands that you see advertising and promoting their product internationally. In India, however, even the smaller retailers are involved in some form of advertising and promotion. That is great because competition down to this level creates a buzz in the consumer marketplace and generates a buying impulse. Today, retailers are willing to mix plain-gold and diamond jewellery in their store displays, a sign that diamond jewellery has gained equal acceptance with the consumer as the more traditional plain-gold variety.”

Lorie thinks the diamond manufacturing and retail industry need to develop an umbrella campaign in India to create and project a strong value proposition for diamonds to the consumer.

According to Lorie, the other issues the diamond manufacturing and retail industry needs to keep a watchful eye on include high pressure and high

IgI hYDERaBaD InItIatIVE

16 IDEX MagazInE – InDIa REtaIl | nO 02: spOtlIght

temperature (HPHT) treated diamonds and synthetics. “We’ve seen a greater number of both these categories coming through our laboratories worldwide,” he observes. “Both are a potential threat to the industry though synthetics are a real danger. For the moment though, I wouldn’t classify them as an imminent threat. Adhering to some simple safety rules should keep the natural diamond industry safe from the threat of undisclosed stones masquerading as the real thing.”

Even as a fully disclosed and inexpensive substitute for natural diamonds, Lorie feels, synthetics don’t pose a threat to the industry. In the end, the draw of the natural stone is its best value proposition. “Take the Swarovsky product,” he observes, “even though it is positioned as a unique product on its own, it is bought by those wanting a diamond look at considerably lower prices. The products are beautiful and generate repeat customers. But once you have the pleasure of owning a Swarovsky product, you start hankering for some real diamonds. In a sense, the Swarovsky product builds steps towards real diamonds. And because Swarovsky products are regularly given to young girls, we have a generation that starts wanting real diamonds much earlier than they would otherwise.”

Bright futureLorie is enthusiastic about the future of both the diamond as well as its accompanying certification industry in India. “With greater consumer education and awareness in India, there will be greater demand for diamonds – and a correspondingly greater demand for assurance programs like certification. Disclosure and certification will have to come from a laboratory and not from the retailer himself. Third party assurance is the norm today. You wouldn’t buy a Picasso painting just because you saw his signature on it. You’d ask an art expert to authenticate it. It’s the same with diamonds. And the more laboratories there are in the marketplace, the greater the consumer awareness and demand for certification will be.”

Lorie quotes the China retail market as an example of what could well develop in India. “Consumers go online to our website (we give consumers direct access) to confirm the specifications of a certificate they see at a retail store. They frequently call our helpline to clear up any discrepancies. The whole thing makes purchases that much easier and gives the consumer much greater confidence. It could all happen in India too.” ■

EQuIpMEnt tO InstIl cOnsuMER cOnFIDEncE

18 Idex MagazIne – IndIa RetaIl | nO 02: COVeR StORY

The jewellery retailer’s new mantra

OutsOurcecOmpete

And

By Vinod Kuriyan

19Idex MagazIne – IndIa RetaIl | nO 02: COVeR StORY

With the economic transformation of the country, the Indian jewellery retail industry has gone through a profound transformation in the last decade. Among the more profound changes has been the steady migration away from one of the retail industry’s oldest and most widely known role – that of jewellery designer and manufacturer.

For millennia, jewellery has played a multiple role in Indian society – the most obvious one of adornment, a symbol of status and most vitally in a society that had almost no options for the safeguard and investment of wealth, a storehouse of value that could be depended on to not only outpace inflation, but also provide instant cash in a crisis. Given all these roles, it has been essential that the retailer, who has played many roles in local society, including that of pawnbroker, have complete control of the raw material sourcing as well as jewellery manufacturing.

OutsOurcecOmpete


not any more. With a variety of investment options now available as well as a whole range of luxury products to choose from, the Indian consumer is increasingly

looking for a very different relationship with even the traditional family jewellery retailers. Primarily, they want a huge choice in the range of products on offer. In addition to that, they want guarantees of purity in the gold content, assurance about the quality and value of the diamonds and coloured gemstones used, as well as some warranty services in the form of assured repairs, cleaning etc. All the other luxury products offer this and more and the Indian consumer wants the same from the jewellery retail industry.

Retailers around the country now find it impossible to perform both their traditional roles as well as cater to the new demands from their customers. Increasingly, they have turned to specialist manufacturers and distributors to source their product, as being rid of this responsibility allows them to focus more on their customers and their specific needs.

With much stiffer competition in the market all round, the name of the game is segmentation and profiling, say industry analysts. As one put it, “There are three separate games – the brand, the product game and the retail – and the return on investment in each is different. If you are in branding, your focus is to maximise the perceived value of the brand; if you are a manufacturer, you will be focussed on simply satisfying the customer’s specific needs within the product range you have as your intent is to ensure that your manufactured product keeps moving. If you are primarily a retailer, however, it is all about catering to every single need of the customer – even those that he or she cannot articulate clearly. You then need the greatest variety and depth of product to offer the greatest range of choices.”

The analyst goes on to say, “It has happened in every other industry from automobiles to fast moving

consumer goods – organised retail is what drives organised manufacture and organised manufacture in turn triggers organised outsourcing. The Indian jewellery retail industry is on the same path that every other product category’s retail system has gone through. Organised outsourcing is inevitable.”

Specialist manufacturers take on a variety of headaches in the manufacturing process that require inordinately large amounts of time and skilled manpower to tackle. They take care of:

• Sourcing primary gold and hedging against the yellow metal’s increasingly volatile price swings. They deliver a product at a fixed price that the retailer knows is good for his customer base during a specific sales period.

• Ensure quality by taking care of hallmarking and providing laboratory certification of the diamonds and coloured gemstones used if this is required.

• Provide a huge range of product styles and options that no retailer could offer his customers on his own. These include the very latest in trends and fashions, that the younger customer base is increasingly demanding of the product they buy. This also allows the retailer in turn to increase the range of products he offers his customers.

• Stand behind their product by providing guarantees as well as repair and refurbishing services when needed.

Outsourcing Gives You A Wide ChoiceMansukh Kothari of Vasupati Jewellers in Mumbai, a firm that provides back-end design and manufacturing services for range of retailer clients around the country, says that the volume and value of the jewellery that

Specialist manufacturers take on a variety of headaches. They deliver a product at a fixed price that the retailer knows is good for his customer base during a specific sales period.


is now outsourced around the country has more than doubled in the last five years. “One of the biggest reasons for this increase,” he notes, “is that outsourcing allows retailers to dramatically increase their stocks. Most retailers have doubled the stocks they hold in the past five years. They have to offer their customers the widest range of choices and options as competition – both from within the industry as well as from other luxury products – is becoming increasingly fierce every day.”

In Kothari’s opinion, outsourcing now accounts for up to 98 percent of the products offered by some retailers. “Many retailers only manufacture a very small percentage of their product to cater to very specialized orders,” he says.

One of the reasons for this huge increase in outsourcing, he observes is that the specialist manufacturers, due to the scale of their operations, are able to study the different geographic markets around India and provide product to retailers in those markets that is specifically tailored to local tastes. “we study each market,” he says, “and we know what each geographic area wants. To give you a very generic example, if we’re making earrings, we know that they have to be big and bold for the northern markets, while the southern markets demand earrings that are smaller and more delicate. We know what product to offer which retailer,” he says, adding, “chains and bangles are the most widespread of jewellery products in India – they’re everyday items and the staple of the industry in every geographic market. Once you’ve got a manufacturing line with these products going, it is relatively an easy matter to start tweaking the design and styling for individual markets. You can offer the retailer a huge range of product because the volumes and varieties in this segment are gigantic.”

“Outsourcing design and product manufacture has definitely taken off,” says Pratap Kamath, CEO of Abaran Jewellery in Bangalore. “Everyone realises the need for a varied product mix today,” he notes, adding, “ a limited

naC JewelleRS


“Branded jewellery as in the big specific brands, is relatively small segment of the total market, though one can’t dismiss brands. Look at Tanishq and how they’ve changed the jewellery retail landscape!”

or select product offering is a big negative for customers today.” Kamath attributes a lot of today’s changes to the fact that disposable incomes have increased and that people have travelled a lot more and have been exposed to cultures, tastes and styles outside India. “These people come back from their travels and realise the importance of design and styling.” He notes that the trend towards a greater variety of styles and designs is also impelled by a strong component of economic necessity. The sky-high price of gold, he notes, has made people buy less jewellery now for occasions and very choosy about what do they buy. “Earlier, when the price of gold was 5,000 for 10 grams, people would buy perhaps five bangles and some three necklaces for a wedding. Now the number of those purchases has been scaled back sharply – perhaps just two or three bangles and just a single necklace, perhaps two. And they will spend a lot of time choosing those two or three pieces that they do buy. The retailer needs to have a really wide selection on offer to cater to this demand. So the trend towards outsourcing manufacture is based on actual consumer demand and this in turn is a need-based imperative. At the end of the day, the retailer can’t fight something the consumer demands.”

Trust Issues Resolved“Earlier,” Kamath observes, “there were many barriers to outsourcing, not the least of which was trust and dependability. Now with the hallmarking of gold and the certification of diamonds and coloured gemstones, outsourcing is on a solid basis in terms of dependability. That crucial trust element has been taken care of. Outsourcing your product line-up something of a huge leap into the unknown.” He goes on to say, “What the outsourcing does, is take away some 75 percent of the retailers headaches, allowing him to focus on his core competence – selling to the consumer. He can work on developing aggressive sales programs and spend more time in training his sales force to better service

his customers. This makes him better at what he does and thus better able to compete even with other luxury products.”

Kamath notes that outsourcing product design manufacture doesn’t mean that the retailer will lose his identity in any way. “We have our own in-store ‘branded’ collections at Abaran,” he notes, emphasizing that his customer base is content knowing that his retail outlet stands behind the product as a brand of its own. “Branded jewellery as in the big specific brands, is relatively small segment of the total market,” Kamath says, adding with a laugh, “though one can’t dismiss brands. Look at Tanishq and how they’ve changed the jewellery retail landscape!”

Emphatically endorsing the statement that outsourcing is now the norm, N. Anantha Padmanabhan of NAC

ManSUKH KOtHaRI: OUtSOURCIng HaS MORe tHan dOUBled


Jewellers in Chennai, says, “Except for a few individual retailers here or there, I would say that 75 percent of all jewellery in retail showrooms today is outsourced. The sheer variety of product available from specialist manufacturers today is terrific. Every retailer needs to know what is happening in the market – the new trends, styles and colours. The specialist manufacturers spend a lot of time and money on researching the market, designing and developing the product. The retailer gets a snapshot of the entire market when he is offered the product range of a specialist manufacturer.”

Citing a personal example, Padmanabhan notes, “Until last year, I designed and manufactured all my product in-house – could source my diamonds cheaper and keep a close eye on quality issues. But I found that I didn’t know what was happening in the market and I was missing out on offering the best product range to a large segment of my clientele that wanted the latest in trends and styles to choose from. Also, designing and manufacturing one’s own product is a major headache. I started outsourcing a major chunk of my product offering and I’m happy doing it.”

Padmanabhan observes, however, that there is one segment he just will not outsource – the high-end and exclusive product that he makes for a select customer base. “When all is said and done, I still think the best product can only emerge when you design and manufacture it yourself. You can meticulously source your diamonds and coloured gemstones, keep a close eye on quality and assure you high end customers completely when you have designed and manufactured the product yourself. And because it has all come from you, the product on offer can be exclusive and not available anywhere else. So for jewellery that costs Rs. 5 lakhs and upwards, we do all the designing and manufacturing in-house. For product that retails at up to Rs.3 lakhs or so, we outsource design and manufacture. This way, we have the best of both worlds.” VaSUpatI JewelleRS


In a tight market, all the retailer has to do is to adjust his own margin slightly, without having to worry about the fluctuations in the price of gold and the availability of other raw material like diamonds and coloured gemstones

Everybody is keeping a close eye on the market and everybody wants a bigger slice of the consumer’s wallet. The fierce competition that he is talking about, Kothari of Vasupati notes, is actually threatening the future of the small and medium jewellery retailer. “You could run a successful retail operation with a range of jewellery that would account for some 30 or 40 kilograms of gold,” he observes, “but not any more. You need much more on hand to offer your customer a choice. In five years’ time, I think you’ll need a minimum stock that accounts for some 100 kilograms of gold. The bigger operators and those with multiple branches are going to be the only ones able to cope with demands like this. And they are not going to be tied down with having to source gold,

design product, manufacture it and then look at issues like quality control. They want ready product with all of this taken care of.”

Artisan Workforce Unlikely To LastThe traditional role of the retailer is also threatened by a social issue. The karigar is no longer a widespread and dependable entity. Many of these traditional artisans, who have gone into jewellery manufacture because their families have been in the trade for generations, no longer want to continue with a job that demands long hours in poor working conditions and absolutely no security of income. Most of them want their children to move into

pRatap KaMatH: eVeRYOne RealISeS need FOR VaRIed pROdUCt OFFeRIng


other fields. The ones that are still in business would much rather work in factory conditions for a specialist manufacturer, chain retailer with its own manufacturing or at the very least a retailer with multiple branches and therefore the scope and volume of production demands that will enable it to offer the same working conditions and salaries that the others can. The small retailer with low and sporadic demand, will no longer have a manufacturing resource to depend on.

According to Kothari, the karigar is being increasingly given a service role in carrying out the minor repairs and refurbishments that customers demand from retailers everywhere. Rather than ship a product back to a third-party manufacturer somewhere else in India – a costly affair in both time and logistics – it makes more sense to have repair services offered locally by karigars he says. “Only if there are major repairs or technical issues beyond the karigars’ scope, is the piece sent back to the manufacturer,” Kothari adds.

Kamath echoes this. “Services like repairs and refurbishment are taken care of locally, primarily because the consumer is not willing to wait for a long period of time while the piece is shipped back to the manufacturer. They want an instant response.”

Just the sheer convenience of having someone else look after the entire design and manufacture process, Kothari notes, is continuing to drive the process to expansion. “Normally, the retailer just adds on our cost to the sticker price of the product and we then pay our way through the process,” he says. In a tight market, all the retailer has to do is to adjust his own margin slightly, without having to worry about the fluctuations in the price of gold and the availability of other raw material like diamonds and coloured gemstones.

The future, according to some industry insiders will see retailers who manufacture their own jewellery becoming highly specialized niche operators in an increasingly exclusive market segment.

aBaRan JewelleRY

30 IDEX MagazInE – InDIa REtaIl | nO 02: REtaIl Et CEtERa

Et Cetera

Tres, Tres ChiC!there’s nobody like the French when it comes to fashion. no matter what the rest of the world is doing, the French do it just that much more chicly. these jewelry and watch pieces from France show just why the country deserves its reputation for style.

JEwElRy by bEllOn CRéatEuR

Down To The LineThe Blue Line range from Bellon Créateur has a contemporary style imprinted on a classic look, combining white or yellow gold with oval or cushion gems. Despite the name, the rings and pendants are also available set with amethysts, citrines and smoky quartz, as well as with blue topaz and blue sapphires.

31IDEX MagazInE – InDIa REtaIl | nO 02: REtaIl Et CEtERa

work of ArTIn homage to the impressionist painter Claude Monet, Mathon Paris has re-launched its Nymphéas collection, created in 2005 and now enriched with new color harmonies and a modernised design. The line is based around orange and yellow – yellow sapphires, spessarite garnets and diamonds – to evoke the atmosphere

of Monet’s lush field of poppies.

GrAPhiC DesiGnCacharel’s Argent Générique line encompasses what the company calls “graphic-chic.” The necklace, ring and bracelet are made of silver, lacquer and cubic zirconia to provide an art deco look in contemporary colors for affordable fashion jewelry. The open-worked, crafted bubble jewelry in the Bulles (bubbles) collection is made of rhodium-plated sterling silver and zirconia.

JEwElRy by CaChaREl

JEwElRy by MathOn PaRIs

Bon VoyAGeHow can you not fail to be “charmed” by these travel-themed charms from Commelin? The Voyages collection takes wearers all over the world through a variety of 18 karat yellow and white gold charms. Providing inspiration for places not yet visited, as well as mementos of special places, these charms are irresistible.

JurA JeweLsisabelle Langlois comes from a long line of lapidaries from the Jura region of France. She has lived among gems since her childhood, which is evident from her stunning designs. She uses an extensive range of gems, including pink and green tourmalines, Ceylon sapphires, tsavorites, citrines and amethysts. Her “French-style” is easy to wear and very decorative, just like real bouquets of flowers.

worLD TrAVeLer Artist-jeweler Philippe Tournaire is renowned for his architectural creations. Now he has taken his creativity a stage further with rings based on some of the world’s most important cities. London, Dubai, Moscow, New York and Paris, rendered in multi-colored gold and artfully placed diamonds, are his first world offerings, though other cities are planned to follow.

JEwElRy by IsabEllE langlOIs

JEwElRy by PhIlIPPE tOuRnaIRE

JEwElRy by COMMElIn


no frèresFounded in 1835, Gay frères is renowned as a manufacturer and supplier to some of the best-known European jewelry brands. The Endless Love collection, one of about 40 produced by the company, represents the power of love. The necklaces, rings, earrings and bracelets come in pink or yellow gold, or white gold with diamonds.

PreCious heArTsIn its Sceau de Coeurs collection,

Poiray reveals a new line of poetic, fun and technical jewelry. Two

interchangeable rings, one in precious metal, the other in ceramic, are interlaced. The rings are available in 18 karat white, pink or yellow gold, semi-pavéd or entirely pavéd in diamonds.

JEwElRy by gay FRèREs

JEwElRy by POIRay

33IDEX MagazInE – InDIa REtaIl | nO 02: REtaIl Et CEtERa

TiMe ChAnGeThese Obi watches from kenzo are available for both men and women. The watches feature reversible straps, allowing wearers to match them with double the number of outfits that a single timepiece would allow. Now you need never worry about clashing with your clothes ever again!

GAy PArisThe Rêviere Parisienne collection of watches from opex takes its inspiration from famous Parisian people and places. These muses include the writer Colette, the singer Edith Piaf and the famous Café de Flore on Boulevard Saint Germain where artists and writers would meet. While the inspiration may come from the Paris of yesterday, the designs are as modern and forward-looking as they come.

watChEs by OPEX

watChEs by kEnzO


This price list reflects suggested retail prices for polished diamonds. Diamonds may, and should, sell at discounts compared to this list. For more education on prices and discounts please visit www.diamondSRP.com. Copyright 2009 by WFDB and IDEX Online S.A. All rights reserved.

D R A F T – J A N U A R Y 1st 2 0 10

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DRAFT – JANUARY 1st 201136

the DIAmonD RetAIl benchmARk - InDIADIAmonD RetAIl benchmARk FoR PolISheD DIAmonDS


Disclaimer: This Diamond Retail Benchmark India (DRB™) is an informational and educational tool for diamond consumers. Organized around the “the 4C’s” - Carat, Cut, Color & Clarity - the DRB India is based on market data from the diamond trading centers Worldwide and market research assessment of customary retail mark-ups. Endorsed by the All India Gem & Jewelry Trade Federation (GJF), as well as the World Federation of Diamond Bourses (WFDB) The DRB™ should be used as background information only. Actual diamond sale prices may be differ compared to this benchmark, depending on demand and supply at time of transaction; source of the diamond certificate; fluorescence; cut specifications; payment and other terms of business; foreign exchange rates; special stones and other business considerations. This is published jointly by The All

India Gems and Jewellery Trade Federation (GJF), a trade body headquartered in Mumbai, and IDEX, a diamond research house headquartered in Tel Aviv Israel, with a view of unbiased service to the consumer


DRAFT – JANUARY 1st 2011 37


D 1275458 938649 800612 607361 474846 403067 336809 265030 226380 154601 88343

e 872391 822698 695704 557668 447238 375459 320245 248466 215337 149079 82822

F 789569 717790 634968 507975 425153 358895 303680 237423 204294 143558 77300

G 557668 535582 513496 447238 397545 336809 292637 226380 198773 138037 71779

h 463803 441717 414110 375459 342331 320245 281595 220858 187730 132515 71779

I 397545 386502 358895 320245 303680 287116 253987 204294 171165 121472 66258

J 331288 320245 309202 292637 265030 253987 237423 182208 149079 110429 66258

k 298159 287116 276073 265030 226380 220858 198773 165644 138037 99386 60736

l 265030 253987 248466 237423 209816 198773 176687 154601 126994 88343 55215

m 220858 215337 204294 193251 171165 160122 143558 121472 110429 82822 55215

n 176687 176687 160122 149079 132515 123605 112857 96735 93865 77300 55215Rou

nd 4

/4 (

1.00

-1.4

9)


D 1507279 1220446 1124835 860499 691774 556793 455558 348699 275585 174349 101235

e 1192325 1141708 956110 809881 658029 534297 433062 331826 264336 168725 95611

F 1034848 944862 899868 742391 629908 506176 404941 320578 253088 163101 89987

G 725519 708646 674901 613035 551169 461182 376820 298081 241840 157477 84363

h 584914 568042 551169 500552 466807 427437 359947 275585 230591 151853 84363

I 517424 511800 494927 438686 404941 376820 320578 253088 219343 140604 78738

J 427437 421813 404941 365571 331826 320578 281209 224967 185598 129356 78738

k 348699 337451 326202 320578 286833 264336 241840 202470 168725 118108 73114

l 314954 303705 292457 275585 253088 241840 219343 185598 151853 112484 67490

m 264336 258712 247464 241840 213719 202470 185598 157477 134980 101235 67490

n 213719 213719 202470 188390 174349 163101 151853 129356 118108 89987 67490 Rou

nd 1

.50

(1.5

0-1.99

)

Rou

nd 3

.00

(3.0

0-3.

49)

Rou

nd 3

.50

(3.5

0-3.

99)


D 3756710 2911148 2585003 1999150 1582408 1044873 773085 507337 434860 229510 126834

e 2850751 2591043 2174302 1739441 1455574 984475 730807 483178 404662 223470 120795

F 245816922648981908554 1582408 1352899 924078 700608 459019 380503 211390 114755

G 1968951 1769640 1594488 1419336 1189826 833482 664370 434860 362384 205351 108715

h 1491813 1431415 1328740 1159628 996555 718728 634171 410701 344264 199311 108715

I 1062992 1032793 996555 893880 761006 628132 549615 374463 320106 187232 102675

J 863681 851601 821403 742886 670410 543575 483178 344264 283867 169112 96636

k 797244 761006 730807 664370 597933 465059 404662 314066 253669 157033 96636

l 597933 567734 537536 513377 465059 350304 295947 259708 199311 150993 90596

m 495258 483178 465059 434860 398622 314066 265748 235549 175152 138914 90596

n 392582 398622 392582 356344 332185 277827 235549 211390 150993 126834 90596


D 4177489 3237218 2874542 2223069 1759650 1161906 859676 564162 483568 255216 141041

e 3170056 2881258 2417839 1934271 1618609 1094744 812663 537298 449987 248500 134324

F 2733501 2518582 2122325 1759650 1504433 1027582 779081 510433 423122 235068 127608

G 2189488 1967852 1773082 1578312 1323095 926838 738784 483568 402973 228351 120892

h 1658906 1591744 1477568 1289514 1108176 799230 705203 456703 382825 221635 120892

I 1182055 1148474 1108176 994001 846244 698487 611176 416406 355960 208203 114176

J 960419 946987 913406 826095 745500 604460 537298 382825 315662 188054 107460

k 886541 846244 812663 738784 664906 517149 449987 349243 282081 174622 107460

l 664906 631325 597744 570879 517149 389541 329095 288797 221635 167905 100743

m 550730 537298 517149 483568 443270 349243 295514 261933 194770 154473 100743

n 436554 443270 436554 396257 369392 308946 261933 235068 167905 141041 100743


D 2141801 1729504 1558160 1274372 926329 706794 578286 396233 310561 182053 101736

e 1675959 15688691338626 1140509 888847 690731 562223 385524 299852 176699 96381

F 1472488 1327917 1194054 1006646 851366 653249 524741 369461 289143 171344 91027

G 1060191 974519 888847 813884 744276 610413 503323 348043 273080 165990 91027

h 824593 771048 717503 680022 631831 546159 471196 321270 257016 160635 85672

I 669313 647895 610413 562223 519387 471196 428360 294498 246307 149926 80318

J 535450 514032 492614 460487 428360 390879 364106 267725 224889 133863 80318

k 481905 465842 449778 417651 390879 353397 326625 257016 192762 128508 74963

l 374815 364106 353397 337334 305207 278434 251662 214180 165990 123154 69609

m 321270 315916 310561 305207 262371 235598 214180 187408 139217 112445 69609

n 267725 267725 267725 243601 219535 192762 176699 160635 118108 101736 69609Rou

nd 2

.00

(2.0

0-2.

49)


D 2428889 1961328 1767017 1445189 1050495 801533 655800 449344 352189 206456 115372

e 1900606 1779161 1518056 1293383 1007989 783317 637583 437200 340044 200383 109300

F 1669861 1505911 1354106 1141578 965483 740811 595078 418983 327900 194311 103228

G 1202300 1105145 1007989 922978 844039 692233 570789 394694 309683 188239 103228

h 935122 874400 813678 771172 716522 619367 534356 364333 291467 182167 97156

I 759028 734739 692233 637583 589006 534356 485778 333972 279322 170022 91083

J 607222 582933 558644 522211 485778 443272 412911 303611 255033 151806 91083

k 546500 528283 510067 473633 443272 400767 370406 291467 218600 145733 85011

l 425056 412911 400767 382550 346117 315756 285394 242889 188239 139661 78939

m 364333 358261 352189 346117 297539 267178 242889 212528 157878 127517 78939

n 303611 303611 303611 276254 248961 218600 200383 182167 127517 115372 78939 Rou

nd 2

.50

(2.5

0-2.

99)


D 235446 193589 167428 146499 136035 104642 88946 78482 68018 52321 36625

e 198821 177892 151732 136035 125571 99410 83714 78482 62785 47089 31393

F 188356 172660 141267 125571 115107 94178 78482 73250 57553 41857 31393

G 172660 151732 130803 115107 99410 83714 73250 68018 52321 41857 26161

h 151732 136035 120339 104642 88946 78482 68018 62785 47089 36625 26161

I 125571 109875 104642 94178 78482 73250 62785 57553 47089 36625 26161

J 94178 88946 83714 73250 68018 62785 57553 52321 41857 36625 20928

k 83714 78482 73250 62785 57553 52321 47089 47089 41857 31393 20928

l 68018 62785 62785 57553 57553 52321 47089 36625 31393 26161 15696

m 57553 57553 52321 47089 47089 41857 36625 31393 26161 20928 15696

n 47089 52321 41857 36625 36625 31393 26161 26161 20928 15696 15696Rou

nd 1

/3 (

0.29

-0.3

7)


D 272525 230598 199153 178190 146744 115299 104817 94336 73372 57650 41927

e 230598 204394 178190 167708 141504 110058 94336 89095 68131 52409 36686

F 220117 199153 172949 157226 131022 104817 89095 83854 68131 52409 36686

G 199153 172949 151985 136263 115299 99577 83854 78613 62890 47168 31445

h 178190 157226 136263 120540 104817 94336 78613 73372 57650 47168 31445

I 151985 131022 120540 104817 94336 83854 73372 68131 52409 41927 31445

J 120540 110058 104817 89095 78613 73372 68131 62890 47168 41927 26204

k 110058 99577 94336 78613 73372 62890 57650 52409 41927 36686 26204

l 94336 89095 83854 73372 68131 57650 52409 47168 36686 31445 20963

m 78613 73372 68131 62890 57650 52409 47168 41927 31445 26204 20963

n 62890 57650 52409 52409 47168 47168 41927 36686 26204 20963 20963 Rou

nd 3

/8 (

0.38

-0.4

4)

Rou

nd 4

.00

(4.0

0-4.

99)


D 4829395 3837893350924928296802222525 1353568 974791 564162 483568 255216 141041

e 3826753 3492539301906825288882099979 1303435 946940 537298 449987 248500 134324

F 3453547 3013498 2718276 2339500 1921732 1236593 924659 510433 423122 235068 127608

G 2606871 2339500 2194673 2066558 1687782 1097337 852246 483568 402973 228351 120892

h 1983004 1882740 1754625 1632079 1370278 980362 785403 456703 382825 221635 120892

I 1431551 1359138 1303435 1203171 1052775 818825 696280 416406 355960 208203 114176

J 1153039 1097337 1063915 980362 868957 718561 607156 382825 315662 188054 107460

k 980362 919089 885668 824395 735271 584875 518032 349243 282081 174622 107460

l 673999 640577 612726 584875 518032 417768 362065 288797 221635 167905 100743

m 579305 557024 540313 506892 462330 373206 323074 261933 194770 154473 100743

n 484611 473470 467900 428908 406627 328644 284082 239520 167905 141041 100743 Rou

nd 5

.00

(5.0

0-5.

99)


D 6773027 5128547 461569238854322954489 1800566 1220817 613196 483568 262002 141041

e 5078376 4571096 402479534840672787254 1666778 1181796 579749 449987 250853 134324

F 4459606 4013646 3679175 3261087 2397038 1521841 1131625 557451 423122 239704 127608

G 3344705 3010234 2770530 2547550 2118313 1404776 1070305 535153 402973 228555 120892

h 2675764 2424911 22298032006823 1677927 1220817 964390 479408 382825 222980 120892

I 1928780 1806140 1744821 1560862 1404776 1031284 836176 423663 355960 211831 114176

J 1449372 1376903 1282137 1226392 1170647 919794 741410 384641 315662 200682 107460

k 1131625 1048007 997837 942092 886347 724686 613196 351194 282081 183959 107460

l 830602 797155 758133 724686 668941 557451 423663 306598 239704 167905 100743

m 719111 685664 657792 629919 602047 501706 379067 273151 206257 154473 100743

n 607621 574174 557451 535153 535153 445961 334470 239704 172810 141041 100743


D 553205 423039 363380 319991 292873 249485 222367 184402 157284 103048 65083

e 406769 363380 325415 303721 271179 238638 211520 173555 151860 97624 65083

F 363380 330838 303721 282026 254908 222367 195249 168131 146437 92201 59659

G 325415 292873 271179 249485 227790 200673 178978 162707 141013 92201 54236

h 292873 265755 244061 222367 206096 184402 168131 151860 130166 86777 54236

I 244061 227790 216943 200673 184402 168131 146437 135590 124742 81354 54236

J 184402 178978 173555 157284 151860 146437 135590 119319 113895 75930 48812

k 162707 157284 151860 135590 130166 119319 108472 103048 92201 70507 48812

l 135590 130166 124742 119319 113895 108472 97624 92201 70507 59659 43389

m 124742 119319 113895 108472 103048 97624 92201 86777 65083 54236 37965

n 113895 108472 103048 97624 92201 86777 86777 81354 59659 48812 32541Rou

nd 3

/4 (

0.70

-0.8

9)

Rou

nd 0

.90

(0.9

0-0.

99)


D 682516 569659 494421 392312 354693 333197 284830 220340 177347 123605 75238

e 564285 532040 451428 360068 338571 311700 274081 209592 171973 118231 69864

F 532040 505169 419183 343945 322449 295578 263333 204217 166598 112857 69864

G 451428 413809 354693 317074 295578 274081 241836 193469 161224 107483 64490

h 365442 343945 322449 300952 279455 252585 231088 182721 150476 102109 64490

I 306326 290204 268707 257959 236462 225714 204217 166598 139728 96735 59116

J 252585 241836 231088 220340 204217 198843 182721 150476 128979 91360 59116

k 209592 204217 193469 182721 171973 166598 150476 128979 102109 80612 53741

l 177347 171973 166598 155850 150476 145102 134354 118231 96735 75238 48367

m 161224 155850 150476 145102 139728 134354 123605 107483 91360 69864 48367

n 145102 139728 134354 134354 128979 123605 112857 96735 85986 64490 48367






D 590389396597356036338009310968 274914 229846 189285 144217 99149 63095

e 396597356036342516328996301955 261394 220833 184778 139710 94643 58588

F 356036 342516 333502 315475 283928252380 216326 180272 135204 94643 58588

G 342516 333502 319982297448270407234353202805 171258 126190 90136 54081

h 283928 265901 252380238860216326 198299 175765 162244 121683 85629 54081

I 243367234353225339 216326 198299 180272 157738 148724 117176 81122 49575

J 207312 198299 189285 180272 171258 157738 139710 126190 99149 68665 49575

k 171258 166751 162244 157738 148724 139710 126190 112670 90136 59509 45068

l 139710 135204 130697 126190 117176 108163 103656 90136 72109 54081 40561

m 121683 117176 112670 108163 103656 94643 90136 85629 63095 49575 40561

n 103656 99149 94643 90136 90136 81122 76615 68665 54081 45068 40561

Fanc

y 4/

4 (1

.00-

1.49

)


D 767688 528091484084469415440076 410738 337392264046200479 127133 73346

e 528091484084469415454745430297400958332502 259156 195589 122243 73346

F 484084469415454745430297 410738386289 317833 249376 185810 117354 68456

G 469415454745430297 415627 386289 352061 298274 239597 180920 112464 63567

h 381399 371620 356951 342281 322722 298274 259156 215148 161361 107574 58677

I 327612 317833 312943 298274283605268935224928 195589 151582 102684 58677

J 254266249376244487 234707224928 215148 185810 161361 127133 92905 53787

k 220038 215148 210259 200479 190700 185810 166251 141802 112464 83125 53787

l 185810 180920 176030 171141 156472 151582 136913 117354 97795 73346 48897

m 156472 151582 146692 141802 132023 127133 117354 107574 83125 68456 44008

n 127133 122243 117354 112464 107574 102684 97795 97795 68456 63567 40561

Fanc

y 1.50

(1.50

-1.9

9)


D 114564 107173 96086 88695 73912 66521 55434 51739 44347 33261 22174

e 107173 99782 88695 73912 62826 59130 51739 51739 40652 29565 22174

F 99782 92390 77608 66521 59130 55434 48043 48043 36956 25869 18478

G 92390 81304 70217 62826 55434 51739 44347 44347 33261 25869 18478

h 73912 70217 62826 59130 51739 48043 40652 40652 29565 22174 18478

I 59130 55434 51739 51739 48043 44347 36956 36956 29565 22174 14782

J 48043 44347 44347 40652 40652 36956 33261 33261 25869 18478 14782

k 40652 36956 33261 33261 33261 29565 25869 25869 22174 18478 14782

l 36956 33261 33261 29565 29565 29565 25869 22174 14782 14782 11087

m 33261 33261 33261 29565 29565 29565 25869 22174 14782 11087 11087

n 33261 33261 33261 29565 29565 29565 25869 22174 14782 11087 11087

Fanc

y 1/

5 (0

.18-

0.22

)


D 130497 122078 109449 101030 84192 75772 63144 58934 50515 37886 25257

e 122078 113659 101030 84192 71563 67353 58934 58934 46305 33677 25257

F 113659 105239 88401 75772 67353 63144 54725 54725 42096 29467 21048

G 105239 92611 79982 71563 63144 58934 50515 50515 37886 29467 21048

h 84192 79982 71563 67353 58934 54725 46305 46305 33677 25257 21048

I 67353 63144 58934 58934 54725 50515 42096 42096 33677 25257 16838

J 54725 50515 50515 46305 46305 42096 37886 37886 29467 21048 16838

k 46305 42096 37886 37886 37886 33677 29467 29467 25257 21048 16838

l 42096 37886 37886 33677 33677 33677 29467 25257 16838 16838 12629

m 37886 37886 37886 33677 33677 33677 29467 25257 16838 12629 12629

n 37886 37886 37886 33677 33677 33677 29467 25257 16838 12629 12629

Fanc

y 1/

4 (0

.23-

0.28

)


D 178043 163607 149171 139547 120299 105863 96239 86615 62556 48120 38496

e 163607 153983 139547 129923 115487 96239 86615 81803 57744 43308 33684

F 153983 144359 129923 120299 110675 91427 81803 76991 52932 38496 28872

G 144359 129923 120299 110675 101051 86615 72179 72179 48120 38496 28872

h 125111 115487 105863 101051 91427 81803 67367 67367 43308 33684 28872

I 101051 96239 91427 86615 76991 72179 62556 62556 43308 33684 24060

J 81803 76991 76991 72179 62556 57744 52932 52932 38496 28872 24060

k 72179 62556 57744 52932 52932 48120 38496 38496 29516 24597 24060

l 62556 57744 52932 48120 48120 43308 38496 33684 28872 24060 19248

m 52932 48120 48120 43308 43308 39355 34435 29516 24060 19248 19248

n 44274 44274 44274 39355 39355 39355 34435 29516 19677 19250 19248Fanc

y -1

/2 (

0.45

-0.4

9)


D 246033208896190328 171759 157833 129980 111411 102127 88201 69632 51064

e 213538 190328 176401 153191 139264 116053 92843 92843 83558 64990 46421

F 190328 176401 157833 143906129980 111411 88201 88201 78916 60348 46421

G 176401 157833 143906129980 116053 102127 83558 83558 69632 55706 41779

h 157833 143906134622 120696 111411 88201 78916 78916 64990 51064 41779

I 134622 120696 116053 106769 97485 88201 78916 74274 60348 51064 37137

J 106769 97485 92843 88201 83558 78916 74274 64990 55706 51064 37137

k 83558 74274 74274 69632 69632 64990 60348 60348 51064 46421 32495

l 69632 64990 64990 60348 60348 60348 55706 55706 46421 41779 32495

m 55706 55706 55706 51064 51064 51064 46421 46421 41779 37137 27853

n 46421 46421 46421 41779 41779 41779 37137 37137 37137 32495 23211 Fanc

y 1/

2+ (

0.50

-0.6

9)


D 1146484833388 768927 699862 653818 529501 386766 290074 225613 133526 82878

e 833388 768927 699862 653818 589357 506479 377557 280866 221009 128922 78274

F 768927 699862 653818 589357 543314 483457 368348 271657 211800 124318 78274

G 681444 635401 589357 543314 520292 437414 354535 257844 202592 119713 73670

h 547918 501875 455831 432809 409788 368348 303887 230218 184174 115109 69065

I 432809 409788 386766 363744 340722 322305 276261 216405 170361 110504 69065

J 331513 317700 303887 290074 271657 257844 230218 174965 138131 101296 64461

k 280866 267053 257844 244031 239426 230218 211800 156548 124318 96691 59857

l 202592 193383 184174 171141 165757 161152 151944 128922 105900 87483 55252

m 165757 156548 147339 142735 138131 138131 128922 115109 96691 82878 50648

n 128922 122243 119719 115109 115089 105879 105900 101296 87483 78274 46044Fanc

y 2.

00 (

2.00

-2.4

9)


D 1313488954785 880934 801808 749058 606631 443105 332328 258478 152977 94951

e 954785 880934801808 749058 675207 580256 432554 321778 253203 147702 89676

F 880934 801808 749058 675207 622456 553881 422004 311228 242652 142426 89676

G 780708 727957 675207 622456 596081 501130 406179 295403 232102 137151 84401

h 627731 574981 522230 495855469480422004 348154 263753 211002 131876 79126

I 495855469480443105 416729 390354 369254 316503 247928 195177 126601 79126

J 379804 363979 348154 332328 311228 295403 263753 200452 158252 116051 73851

k 321778 305953 295403 279578 274303 263753 242652 179352 142426 110776 68576

l 232102 221552 211002 195177 189902 184627 174077 147702 121326 100226 63301

m 189902 179352 168802 163527 158252 158252 147702 131876 110776 94951 58026

n 147702 137151 137158 131876 131853 121303 121326 116051 100226 89676 52751 Fanc

y 2.

50 (

2.50

-2.9

9)


D 152499 142661 127903 118064 98387 88548 73790 68871 59032 44274 29516

e 142661 132822 118064 98387 83629 78709 68871 68871 54113 39355 29516

F 132822 122983 103306 88548 78709 73790 63951 63951 49193 34435 24597

G 122983 108225 93467 83629 73790 68871 59032 59032 44274 34435 24597

h 98387 93467 83629 78709 68871 63951 54113 54113 39355 29516 24597

I 78709 73790 68871 68871 63951 59032 49193 49193 39355 29516 19677

J 63951 59032 59032 54113 54113 49193 44274 44274 34435 24597 19677

k 54113 49193 44274 44274 44274 39355 34435 34435 29516 24597 19677

l 49193 44274 44274 39355 39355 39355 34435 29516 19677 19677 14758

m 44274 44274 44274 39355 39355 39355 34435 29516 19677 14758 14758

n 44274 44274 44274 39355 39355 39355 34435 29516 19677 14758 14758

Fanc

y 1/

3 (0

.29-

0.37

)


D 171324 157433 143542 134281 115759 101868 92608 83347 60195 46304 37043

e 157433 148172 134281 125020 111129 92608 83347 78716 55565 41673 32413

F 148172 138911 125020 115759 106499 87977 78716 74086 50934 37043 27782

G 138911 125020 115759 106499 97238 83347 69456 69456 46304 37043 27782

h 120390 111129 101868 97238 87977 78716 64825 64825 41673 32413 27782

I 97238 92608 87977 83347 74086 69456 60195 60195 41673 32413 23152

J 78716 74086 74086 69456 60195 55565 50934 50934 37043 27782 23152

k 69456 60195 55565 50934 50934 46304 37043 37043 29516 24597 23152

l 60195 55565 50934 46304 46304 41673 37043 32413 27782 23152 18522

m 50934 46304 46304 41673 41673 39355 34435 29516 23152 18522 18522

n 44274 44274 44274 39355 39355 39355 34435 29516 19677 18524 18522 Fanc

y 3/

8 (0

.38-

0.44

)

Fanc

y 3/

4 (0

.70-

0.89

)


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n 73242 73242 73242 68665 68665 68665 68665 68665 37924 37924 36621 Fanc

y 0.

90 (

0.90

-0.9

9)








DRAFT – JANUARY 1st 2011 39


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Fanc

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n 127133 122243 117354 112464 107574 102684 97795 97795 68456 63567 40561

Fanc

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l 36956 33261 33261 29565 29565 29565 25869 22174 14782 14782 11087

m 33261 33261 33261 29565 29565 29565 25869 22174 14782 11087 11087

n 33261 33261 33261 29565 29565 29565 25869 22174 14782 11087 11087

Fanc

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D 130497 122078 109449 101030 84192 75772 63144 58934 50515 37886 25257

e 122078 113659 101030 84192 71563 67353 58934 58934 46305 33677 25257

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h 84192 79982 71563 67353 58934 54725 46305 46305 33677 25257 21048

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k 46305 42096 37886 37886 37886 33677 29467 29467 25257 21048 16838

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m 37886 37886 37886 33677 33677 33677 29467 25257 16838 12629 12629

n 37886 37886 37886 33677 33677 33677 29467 25257 16838 12629 12629

Fanc

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D 2053905 1659870 145792811968801024490 733889 502394 403885 344780 182241 103434

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n 157614 152688 137912 132987 131853 121303 121326 116051 100226 93583 54180Fanc

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n 158887 153922 139026 134061 131853 121303 121326 116051 100226 94339 54617 Fanc

y 3.

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D 1146484833388 768927 699862 653818 529501 386766 290074 225613 133526 82878

e 833388 768927 699862 653818 589357 506479 377557 280866 221009 128922 78274

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h 547918 501875 455831 432809 409788 368348 303887 230218 184174 115109 69065

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n 128922 122243 119719 115109 115089 105879 105900 101296 87483 78274 46044Fanc

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D 1313488954785 880934 801808 749058 606631 443105 332328 258478 152977 94951

e 954785 880934801808 749058 675207 580256 432554 321778 253203 147702 89676

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h 627731 574981 522230 495855469480422004 348154 263753 211002 131876 79126

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m 189902 179352 168802 163527 158252 158252 147702 131876 110776 94951 58026

n 147702 137151 137158 131876 131853 121303 121326 116051 100226 89676 52751 Fanc

y 2.

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D 152499 142661 127903 118064 98387 88548 73790 68871 59032 44274 29516

e 142661 132822 118064 98387 83629 78709 68871 68871 54113 39355 29516

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h 98387 93467 83629 78709 68871 63951 54113 54113 39355 29516 24597

I 78709 73790 68871 68871 63951 59032 49193 49193 39355 29516 19677

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k 54113 49193 44274 44274 44274 39355 34435 34435 29516 24597 19677

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m 44274 44274 44274 39355 39355 39355 34435 29516 19677 14758 14758

n 44274 44274 44274 39355 39355 39355 34435 29516 19677 14758 14758

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D 171324 157433 143542 134281 115759 101868 92608 83347 60195 46304 37043

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h 120390 111129 101868 97238 87977 78716 64825 64825 41673 32413 27782

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m 50934 46304 46304 41673 41673 39355 34435 29516 23152 18522 18522

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D 285964323077822077004 1836192 1595380 963248 662233 481624 391320 210711 120406

e 224256220770041941547 16856841479991 928130 637148 456539 366235 200677 115389

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h 1399720 1319449 1209077 1123789 948197 702368 531793 371252 306032 170575 100338

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k 591996 561895 536810 516742 481624 386303 346167 265897 205694 135457 80271

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n 240812 220744 220707 210711 210685 185626 160541 135457 110372 100338 65220 Fanc

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D 4315218 3287785 3020653 2702149 22192551340800 868181 565088 421248 241447 138703

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n 364739 359602 333916 308230 277407 246584 226035 154115 113018 113018 71920





IDEX ONLINE 3GS

Mobile technology May be the next big trend, but Many retailers and business owners have been slow to Meet this new advertising, Marketing and sales streaM head on.

IDEX MAGAZINE – INDIA RETAIL | NO 02: GOING MOBILE40

According to a Shop.org survey released last year, while nearly three-quarters of retailers were exploring mobile strategies as an additional sales channel, the number of retailers who had begun implementing their mobile technology plan was much smaller. The survey revealed that 62 percent of retailers had either not yet begun or were only in the early stages of planning their mobile strategy.

The fact that they are planning at all is good news, but with technology moving so quickly and so rapidly in so many different directions, it is imperative that businesses take the mobile plunge, diamantaires and jewelers among them. “Retailers who ignore mobile retailing risk being ignored in return by current and future generations of shoppers,” stated a white paper sponsored by the National Retail Federation (NRF).

The “Mobile Retail Initiative” white paper succinctly summed up the importance of this new sales channel, and went so far as to say it was changing the way retailers conduct business. “Because [mobile phones] are always with us – and always on – they connect retailers to current and potential customers regardless of location or time of day,” the report said.

The numbers are worth considering. In 2015, shoppers are expected to use mobile phones to purchase goods and services worth close to $120 billion, which is in the region of 8 percent of the total e-commerce market. The white paper estimated that payment for goods and services and

money transfers initiated from mobile phones will leap to $630 million by 2014, up from $70 million last year. “Mobile retail represents both a new way to shop and a new payment paradigm,” said the NRF.

While there is a big difference between buying an item of jewelry and buying a coffee, those interested in how to use a mobile phone as a means of payment should follow the latest development from Starbucks.

The coffee behemoth launched its mobile payment test via the Starbucks Card Mobile App in fall 2009 in 16 stores in Seattle and Northern California and at more than 1,000 Starbucks in U.S. Target stores. In October 2010, the company expanded its mobile payment test to nearly 300 company-operated stores in New York City and Nassau and Suffolk counties on Long Island.

“Mobile technology is part of our customers’ daily routine and with the expansion of mobile payment in our test cities, we’re seeing more and more customers using their smartphones as their mobile wallets,” said Brady Brewer, vice president Starbucks Card and Loyalty. “We’ve heard from our customers on My Starbucks Idea that they want a faster, more convenient way to pay… Mobile is just one of the ways we continue to innovate and enhance the experience for our customers.”

To pay for their beverages using their smartphones, customers must first download the free Starbucks

13 : 42Tuesday, 11 January

IDEX MAGAZINE – INDIA RETAIL | NO 02: GOING MOBILE 41

Card Mobile App onto their supported BlackBerry smartphone, iPhone or iPod touch. This gives them a barcode on their screen that they hold in front of a scanner on the counter to pay for their purchase, which is pretty nifty.

In addition to the mobile payment feature, the app allows customers to manage their card account, reload their card balance directly from their smartphone with a major credit card, check their My Starbucks Rewards status or find nearby Starbucks stores.

“With the expansion of mobile payment to New York City, we expect to see more and more customers trading their plastic Starbucks Cards for the digital version on their mobile phone,” said Brewer. “Expanding our mobile footprint gives our customers a new way to connect with Starbucks on the go and transforms the way customers experience their Starbucks Card through the mobile app.”

In the UK, the smartphone as payment device is being taken even further. CreditCall, a specialist payment services provider and transaction gateway with global recognition for innovation in credit card acceptance, has embarked on a “Smartphone Payment Acceptance Trial” that allows companies to accept Chip and PIN credit and debit card payments with their smartphone.

According to a press release from CreditCall, “Businesses operating outside the ‘normal’ retail environment who need to accept payments on the go, such as trades people, mobile retailers, beauticians, delivery services and exhibitors, can

now accept Chip and PIN payments on their mobile phone, without the hassle of checks or cash. Provided they have a mobile signal or Wi-Fi connection, a smartphone, and the special Chip and PIN pad, card payments can be taken anywhere, anytime.” If it’s successful, who knows where it will end. Ultimately, it could spell the end of credit and debit cards, as well as the hassle of carrying cash.

Those who are hesitant to embark on a full mobile marketing campaign should at the very least embrace social networking, a strategy that has been written about many times in these pages. While setting up a Facebook page or launching a Twitter account is not going to revolutionize a company’s business, with young consumers spending more and more time on these sites, it provides important exposure. “Social networks are the fastest growing engagement point between brands and customers and will grow more quickly than any other form of interactive marketing,” NRF estimated in its white paper. “A social media strategy and a mobile strategy will be at the forefront of a successful retail market strategy in years to come,” it continued.

Estimates of the number of active users of mobile social networking sites, according to the NRF, is expected to rise from 55 million in 2010 to nearly 730 million in 2013. “With people now spending more time on Facebook than Google, social media optimization strategies have become the new black,” said a recent report from L2, an NYU Stern organization driving digital innovation. Clearly, if you are not online and actively engaging current and potential consumers, you are missing out on a large and vibrant audience.

IDEX ONLINE 3GS GOING MObILE

GoinG Mobile

IDEX MAGAZINE – INDIA RETAIL | NO 02: GOING MOBILE42

1

Customers are expecting a rich experience, so retailers need to figure out how to deliver.

So, how can you begin to think about

your mobile marketing strategy? At the

NRF’s Mobile Boot Camp, which was

held last year, one session dealt with

just that subject. Listed on the NRF’s

blog are seven tips from Sitemini’s Marci

Troutman and the expert panelists

from Wet Seal, Netbiscuits, Digby, and

Zumobi to help attendees get started on

their mobile journey. (See http://blog.

nrf.com/ or http://tinyurl.com/34e86fr

for a direct link to the full post).

2

3

4

5

6

7

MAke the experience frictionless – minimize the clicks, give them a buy button and make checkout simple. keeping it simple, easy, and fast will improve conversions.

Prioritize what things you want to accomplish, because you can’t get them all done. For example, if you want to sell, make sure you are tracking conversion rates. Alternatively, if you are optimizing the in-store experience, focus on making product information easily accessible.

CoNSiDeR all platforms. You might miss out on most of your customers if you focus only on delivering to high-end devices.

kNoW where your customers are going on your site and make it easy. Whether it’s a store locator or a specific category of items, help your customers get there quickly.kNoW your customers.

Wet Seal knew that their customers were fashion focused, and so focused on imagery and featuring products.

DoN’T check “mobile strategy” off your list and walk away. Never stop working to make it more effective.

13 : 58Tuesday, 11 January

IDEX MAGAZINE – INDIA RETAIL | NO 02: GOING MOBILE 43

Global Polished Diamond Prices

44 IDEX MagazInE – InDIa REtaIl | nO 02: POlISHED

W orldwide polished diamond prices rose significantly in

November, according to the IDEX Online Global Polished Price Index. At the beginning of the month, the IDEX Online Index stood at 117.1. By the end of the month, it had reached 118.5, a rise of 1.2 percent. This would equate to an annualized 14 percent price increase.

Several factors drove higher prices, including the following:

October jewelry sales in the U.S. •showed a solid recovery from lackluster demand in the late summer period. An improving stock market and a bottoming real estate market were responsible for a rising consumer wealth factor.

When consumers feel wealthy, they increase their discretionary spending.

U.S. consumers began their •holiday shopping earlier in 2010.

While the economic recovery has been slow, the economy is clearly improving. As a result, consumers appear to have breathed a sigh of relief and loosened their purse strings.

Prices UP in novemberBy Ken Gassman

Source: IDEX Online Research

September 2010 november 2010October 2010

gRaPH 1

IDEX Online Global Diamond Price Index

119

118.5

118

117.5

117

116.5

116

Peak 118.5

Peak 118.5

5 10 15 20 25 30 5 10 15 20 25 30 5 10 15 20 25 30

Global Polished Diamond Prices

45IDEX MagazInE – InDIa REtaIl | nO 02: POlISHED

The holidays in the Indian market •are over, and traders were buying goods.

The overall mood has improved in •the diamond industry throughout the entire distribution pipeline. Emboldened diamantaires have begun to raise polished diamond prices.

The IDEX Online Global Polished Price Index averaged 117.9 for the month of November, barely up from an average of 117.8 for October. However, the “average” obscureddaily trends, as graph 1 illustrates. The IDEX Online Index reached 118.5 in early September (peak at left on graph 1), then fell for the balance of September and October, and began rising in early November,

as this three-month daily price summary shows. OutlOOk MOre rOsyLast month, IDEX Online Research was bearish on diamond prices, especially after weak September jewelry sales in the U.S. market.

It now appears that consumers were in the malls, and that holiday selling season saleswill be up– thoughmodestly–from2009.Further,earlyindicators suggest that jewelry was onconsumers’shoppinglists. Capitalism sets prices based on supply and demand. Now that demandfor jewelry–andperhapsdiamondjewelry–isstrengthening,diamond prices will likely trend higher.

However, it is clear that we are still in the recovery phase of the current economic cycle. As a result, demand will be choppy for the next several months. Thus, we could see short-term swings in demand that might obscure the long-term potential for higher diamond prices.

Graph 2 illustrates that diamond prices are recovering, even though there may be daily or weekly swings that are unfavorable. ■

the IDeX OnlIne DIaMOnD PrIce InDeXThe IDEX Online Diamond Price Index is a real-time index derived from actual asking prices in the global diamond industry. The IDEX Online Diamond Price Index objectively reflects price trends as they happen. The Diamond Index and Diamond Drivers were formulated following comprehensive research and analysis of the IDEX inventory database, aggregated since 2001. Research and development were conducted in cooperation with Dr. Avi Wohl, senior lecturer of Finance at the Faculty of Management, Tel Aviv University, Israel.

Further information is available from IDEX Online Research, contact [email protected]

The full analysis of The polished diamond prices is available To ideX online research subscribers

and ideX online members.

For more inFormation on how to subscribe or to become a member, contact [email protected]

Source: IDEX Online Research By Month

2008 2009 2010

gRaPH 2

IDEX Online Polished Diamond Price Index24 Months

a S 0 nD J M a M J J a S O n D J FF M a M J J

Peak august 2008 = 128.9november 2010 = 117.8

average april–november 2009108+

46 IDEX MagazInE – InDIa REtaIl | nO 02: U.S. MaRKEt WInDOW

U.S. Market Window

U.S. jewelry sales trends for the third quarter of 2010 were encouraging. Total jewelry sales rose, and specialty jewelers, whose sales represent just under half of all U.S. jewelry sales, posted revenue and profit gains.

The table below summarizes quarterly jewelry sales trends in the U.S. market for both the calendar third quarter and the fiscal third quarter, since some companies are on a fiscal third quarter ending on the last day of October.

The following trends were reported by a majority of jewelers in the third quarter:

• Jewelry sales trends by month were mixed. Sales were relatively strong in July, but weakened in August and September. In October, sales strengthened significantly, as the table below illustrates.

• The average jewelry ticket was up, generally in the mid-to-high single digit range.

• Most specialty jewelers reported an increase in customer traffic.

• The number of transactions rose, though it was inconsistent. This is good news, since it means that jewelers’ conversion ratio – browsers to buyers – is increasing.

• Unit sales were up for most specialty jewelers.

• Sales growth was the greatest for big-ticket statement jewelry.

• Demand for designer name jewelry was strong. Demand for one-of-a-kind jewelry was solid.

• Bridal demand was particularly strong.

• Proprietary branded jewelry sold well.

• Pandora demand continues to be exceptionally strong.

Third Quarter U.S. Jewelry Sales Trends Positive

Month Total Sales Jewelry & Watches

Total Sales Specialty Jewelers

July +8.0% +7.6%

august +5.9% +2.9%

September +5.1% (1.3%)

October +7.0% +7.3%

U.S. Jewelry Sales TrendsMonthly Sales 2010 vs 2009Percent Change Year-to-Year

Third Quarter

Total Sales Jewelry & Watches

Total Sales Jewelry

Total Sales Watches

Total Sales Specialty Jewelers

Calendar 8 +6.6% +4.3% +3.0% Fiscal 81 +6.3% +3.8% +3.0%

Calendar third quarter = July, August, SeptemberFiscal third quarter = August, September, October

U.S. Jewelry Sales Trendsthird Quarter 2010 vs third Quarter 2009

Percent Change Year-to-Year

Source: Department of Commerce

Source: Department of Commerce

47IDEX MagazInE – InDIa REtaIl | nO 02: U.S. MaRKEt WInDOW

• Jewelers’ credit sales mix rose marginally. This is a hopeful sign, since lack of consumer credit has hurt jewelers’ sales.

• Sales per store continue to rise. This helps to absorb relatively fixed overhead costs more efficiently.

• Jewelers who sell warranty and insurance plans for jewelry say that this business has been strong.

• Most jewelers reported an increase in their gross margins, though greater sales of higher ticket goods – with an inherently lower margin – had a negative impact on their margins.

• New product introductions seem to be well received.

• Sales of colored diamonds and leather accessories were solid.

• Watch sales seem to have improved notably. The LGI Network Watch Tracker service reported that lower-priced (under $500) fine watch sales and very high-end fine watch sales (over $1,500) were stronger than watches priced in the mid-range of $500 to $1,500.

OutlOOk ImprOvesMost of the publicly held companies reported a brightened outlook. • Management of publicly held companies guided Wall

Street analysts toward higher sales and profits than previous forecasts, especially for the fourth quarter of 2010.

• Many jewelers are stepping up their new store openings in 2011 and beyond. Real estate is cheap and available.

• Several jewelers mentioned that they will increase new proprietary product introductions 2011.

Preliminary results for the all-important holiday selling season of November-December suggest that jewelry sales will be stronger than expected.

The following table summarizes sales performance for the major publicly held specialty jewelers for their U.S. stores. All specialty jewelers on the table above gained market share in the third quarter except Zale (stores), Movado, Sterling’s regional brands, and Tiffany’s New York Flagship store. ■

Approx. Total Stores $ Millions Total Sales % Chg Y/Y Total Sales % Chg Y/Y Total Sales

High-End Jewelers Inflation Index Same-StoreHarry Winston US 8 $80.2 75.6% Salestiffany US * 81 $298.6 9.0% 5.0%

new York Flagship 1 n/a (3.0%) n/aUS Branches 80 n/a n/a 8.0% Online/Catalog n/a n/a 7.0% n/a

Jared (Sterling) *** 180 $164.4 16.9% 14.3% Mayors US ** 29 $24.0 n/a 2.0%

Mass-Market JewelersSterling (all brands) 1,342 $497.0 8.8% 9.7%

Kay *** 915 $276.3 7.4% 8.6% Regionals *** 250 $56.3 (5.0%) 2.6%

zale (all brands) 1,891 $327.0 (0.7%) (1.1%)Stores **** 1,218 $277.7 (1.8%) n/a

Movado 33 $12.8 3.1% n/aPopular-Priced Jewelers

zale Kiosks ***** 673 $46.4 6.2% n/a

notes:* tiffany's sales for the americas (Canada, US, Mexico, Central & South america) were $331.8 million. U.S. sales were an estimated 90% of reported americas sales.** Mayors US sales estimated; same-store sales are for six-month period ended September.*** Sterling's store counts are estimates, but are within 5 stores of the actual number.**** zale stores include zale's, zale's Outlet, gordons, Peoples, & Mappins.***** zale kiosks include Piercing Pagoda, Plumb gold, and Silver & gold Connections.

Source: Company Reports

Third Quarter 2010 Sales Trends

M ost diamonds found in nature have some “birthmarks” or inclusions that influence their value or grade. Cutters can remove some of the clarity characteristics so they

don’t detract from appearance or durability with innovative cutting process, but some require more than that. The early 1970s brought many advances in diamond clarity treatments.

People have experimented with many ways to change and modify diamond’s appearance.

LASER DRILLINGDiamond manufacturers have used lasers to drill tiny tunnels – thinner than a human hair — into diamonds to remove or reduce dark inclusions since the early 1970s. The laser drill-hole makes it possible to vaporize the inclusion with laser, bleach it, or etch it out with acid. This lightens a dark inclusion and can make the diamond more marketable.

In spite of the fact that it disguises an existing inclusion, laser drilling often doesn’t improve the clarity grade. In fact, the drill-hole itself becomes a clarity characteristic.

DETECTIONYou can detect a laser drill-hole with careful examination under 10X magnification, although higher magnification is sometimes necessary. A laser drill-hole can be very difficult to detect if it is very small, short or covered u n d e r the prong during setting.

Once drilled, the hole is a permanent characteristic of the diamond, so all major gem labs, like the GIA Laboratory, will grade laser-drilled stones. They report the drill-hole as a clarity characteristic.

ADVE

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Clarity Treatments

A variation on laser drilling is called internal laser drilling (ILD), a technique that uses a laser to expand an existing cleavage or create a new cleavage between an inclusion and the surface. This allows the introduction of a bleaching solution, which results in the lightening of a dark inclusion, making it less visible.

The cleavage created by this procedure is more natural-looking than a traditional laser drill-hole. When you examine a diamond treated with ILD under the microscope, you see a step-like series of tiny cleavages. These wormhole-like channels are definite signs of ILD treatment.

There’s industry wide agreement that laser-drilled diamonds should be clearly disclosed all the way from wholesaler to consumer.

FRACTURE FILLINGThe first fracture filling treatment for diamonds was introduced in 1980s and many manufacturers of filling materials have emerged since. The exact composition of filler varies from manufacturer to manufacture, but they are primarily molten glass.

The refractive index (RI) of diamond makes light behave in a predictable way. When a diamond has a fracture that reaches the surface, the air in the fracture (with its lower RI) interrupts light’s path through the diamond and makes the fracture reflective and easier to see.

The filling has an RI closer to diamond than the air it replaces, so it makes the filled fracture almost invisible to the casual observer.

MAgAzInE – InDIA RETAIL | nO 02: gIA48

If a fracture doesn’t reach the surface, a laser drill-hole provides a route

for the filling.

Fracture filling has become a fact of life in the diamond industry — many more diamonds

are subjected to this treatment than to irradiation, coating, heat,

or pressure.

Diamonds that once were considered unsuitable for gem use can be treated and made attractive and affordable to a wider range of consumers.

Diamonds as small as melee have been filled, but because of the cost of the treatment, most filled diamonds weigh more than one carat. The marketability of larger stones takes a higher leap with an apparent clarity improvement.

Fracture filling has its advantages — it makes a diamond look better — but it also has some disadvantages. For one thing, the filler sometimes lowers a diamond’s colour slightly.

Fracture filling can last for years with proper care, but it’s important to know that the fillers can sometimes be damaged by common jewellery repair procedures, such as the high temperatures created during recutting or repolishing and the torch heat generated during retipping or repair.

Over time, repeated cleaning can also harm fillers, especially when the method involves steam, acid, or ultrasonics. Prolonged exposure to UV radiation — even sunlight — can discolour filler and make it look cloudy over time.

It’s possible to replace the filler if it melts and leaks out, but if it turns dark, there’s no way to make it colourless again. The only solution is to remove it and replace it with new material.

Many major manufacturers of fracture fillings offer lifetime guarantees on their treatments for just this reason.

DETECTIONThe ability to identify filled diamonds is always essential, especially if you have to take jewellery in for repair and cleaning procedures that can damage a treated stone.

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The most obvious evidence of fracture filling is called the flash effect, which is a flash of changing colour that shows up with proper lighting under magnification. The flash effect results because glass fillers don’t precisely match diamond’s RI for all wavelengths of light.

To see it, you must look parallel to the fracture and rock the diamond back and forth. The colour of the flash will change as the stone is shifted and the background moves from dark to a light.

Other signs of fracture filling include gas bubbles trapped in the fracture or in the filler itself. The injected filler can also have a crackled texture. When you see these features under magnification, it’s obvious that they’re not part of the diamond’s original internal structure.

Always make sure you examine the diamond from many different angles. Fibre-optic illumination

makes the flash effect more evident.

Because fracture fillings can be semi-permanent, most gemmological laboratories, including the

GIA Laboratory, don’t grade filled diamonds. (They do, however, report the presence of fracture

filling.) Its only function is to make a diamond more marketable by disguising its inclusions.

If you’re ever unsure about the presence of fracture filling in a diamond, send it to a gemmological laboratory for identification.

To be absolutely sure – take it to the GIA India Laboratory Like all GIA laboratories worldwide, GIA India tests every diamond it grades for laser drilling, fracture filling, irradiation, high pressure/high temperature (HPHT) and chemical vapour deposition (CVD) to detect known treatments and to separate natural diamonds from synthetics. Grading reports are not issued for diamonds that have undergone unstable treatments such as coating or fracture filling. And, while grading reports may be issued for diamonds that have been laser drilled, irradiated or HPHT processed, these treatments are prominently disclosed on a GIA Report.

Want to learn more?About GIA Lab Services, email us at [email protected] and for GIA India’s training programmes email us at [email protected]. You can also visit GIA India at www.giaindia.in.

MAgAzInE – InDIA RETAIL | nO 02: gIA 49

FocusBailey Banks & Biddle

50 IDEX MagazInE – InDIa REtaIl | nO 02: FOCUS

T his is a story of how success was crafted

from failure. The story of a once successful

company that stumbled and went under

financially and how the vision and determination of a

group of managers enabled a small but viable part of

the company to rise phoenix-like from the ashes of

the first failure. It is also the story of re-invention and

how the internet can be used to give the consumer a

previously unimaginable range of choices and options

and deliver a custom solution with economy of scale

that bulk manufacture offers.

Bailey Banks & Biddle was part of a larger company

named Finlay, that operated a larger number (between

500 and 700 outlets) of leased jewelry departments in US

Departments stores such as Macy’s and Bloomingdales.

And though Finlay was a successful company, things

went wrong financially. Basically, their expenses

exceeded their gross margin dollars and the result

was a financial failure.

As the post-failure process got under way, with

assets being disposed of to try and recover as much

Re-inventing The Shopping Experience For Jewellery Consumers

Combining briCks-and-mortar with the internet helps firm rise from ashes

BBB’S vaRIED pRODUCt OFFERIng

51IDEX MagazInE – InDIa REtaIl | nO 02: FOCUS

of its debt as possible, a group of BBB employees

concluded that a core part of the company was

essentially healthy and could definitely be turned

around and that they had the necessary expertise

to do so. They believed that the brand itself has

a tremendous amount of consumer awareness, as

well as a storied history dating back to 1832. In

addition, current CEO and president Paul Leonard

had previously led the successful consolidation,

repositioning, and turnaround of Bailey Banks and

Biddle in the mid 1990’s as its then parent company,

Zale Corp., emerged from bankruptcy.

Market data also indicated that the time was ripe for a

fundamental change in the whole jewellery shopping

experience for consumers. A completely new approach

to how jewellery was retailed was called for. US

customers are generally dissatisfied with the overall

shopping experience and the value of offerings in

traditional jewellery stores. Saddled with the highest

cost structures in retail, traditional brick-and-mortar

jewellery stores have lost sales to online jewelry retailers

at twice the rate of the total retail industry. The new

management team evolved a strategy that recognizes

and embraces the change in consumer attitudes and

behaviour by becoming the first jewelry retailer to

bridge the gap between online and in-

store shopping.

The centerpiece of the new Bailey Banks

and Biddle is “Bailey’s Design Studio,”

which puts the customer in charge, whether

online or in-store. Customers can select

a favourite mounting from hundreds of

high quality design samples. Then, if in-

store, they can settle into a comfortable

leather chair and surf the Bailey Banks and

Biddle website for a diamond (over 25,000

are available via IDEX’s virtual inventory

and online purchasing tools specially

customized for BBB’s requirements) on

one of several 55-inch flat-screen monitors.

The external website will be launched this

spring, so customers will then be able to

purchase from home. This hybrid online/

in-store experience was inspired by the

unique interactive experience Apple, the creator of the

Mac computer, the iPod, iPhone and iPad as well as the

on-line iTunes music store, evolved to attract customers

and deliver value. The new Bailey Banks and Biddle

tagline is “Online Pricing…In-Store Service”.

The current management team includes a number

of key executives who were part of the successful

turnaround in the 1990s, in addition to store managers

from recent years. The knowledge base of the group

was instrumental in determining the group’s strategy to

reinvent the company. Since the company had ceased

operating at the end of 2009, with the closing of all

stores, the new Bailey Banks and Biddle is really a

start-up rather than a turn-around. However, the group

was able to acquire rights to the brand and negotiate

favourable leases for five former BBB stores. The stores

are located in Austin, Dallas, Houston, St. Louis and

Philadelphia.

As a virtual start-up, the new company was a clean

slate and the management team clearly recognized the

need to reinvent BBB in order to be successful. They

evolved an innovative economic model that significantly

reduces inventory costs with design samples consisting

of silver and cubic zirconia, which serves as a “virtual


52 IDEX MagazInE – InDIa REtaIl | nO 02: FOCUS

inventory.” In addition, Bailey’s Design Studio’s offers

more than 25,000 diamonds from around the world

at prices below those at traditional jewellery retailers.

The value-oriented emphasis of the new BBB business

model has the potential to appeal to a much broader

base, especially the increasingly price-conscious affluent

customer and younger tech-savvy customers who have

gravitated to online jewellery offerings. In addition, the

new BBB carries a wide assortment of finished jewellery.

Consistent with its heritage, all merchandise is made

with the finest diamonds, gemstones, and precious

metals.

But the turnaround didn’t go like clockwork and it

wasn’t all smooth sailing for the new management team.

Basically, as with all start-ups, nothing was in place at

the beginning. The new managers secured an office

building and furnished it, including the installation

of a vault. They had to establish relationships with

banks, utilities, phone-, and cable companies. And

while the core group of eight executives was in place

at the outset in May, the group had to hire a central

organization and selling staff for the five stores. In

addition, they negotiated with landlords for many

of the closed BBB stores before selecting five and

remodelling them to incorporate the new Bailey’s

Design Studio.

One of the key changes that the

new team made was to combine the

traditional sourcing and stocking model

with a cutting-edge digital one. As with

most other brick-and-mortar jewellery

stores, the current BBB uses traditional

channels for “live” merchandise. But by

combining it with online sourcing the

new company can provide the consumer

access to a much larger inventory of

diamonds. The new BBB uses the

IDEX online Guaranteed Diamond

TransactionsTM virtual inventory

and purchasing system to provide

its customers with the widest choice

possible with prices that are competitive

compared to the online-only players.

The biggest advantage to the online

model, is the ability to reach a much wider audience

without the expense of a large number of stores and

a large inventory. The new company plans to grow

to about 50 stores within five years, which will once

again give it a national footprint in brick-and-mortar

terms. However, the company believes that the customer

will increasingly research online, even if they decide

to make their purchase in a store, and the fact that it

will have a store in most cities, the management team

believes, will give it a competitive advantage compared

to online-only retailers. The fact that the company is

pricing solitaires competitively with online retailers

gives it a competitive advantage against traditional

jewellery stores.

Assessing its prospects for the future, the new Bailey

Banks & Biddle believes that its opportunity lies

with being the first jewellery retailer to embrace the

hybrid online/in-store model. It realises, however,

that this alone will not be enough to carry it forward

successfully. The challenge will be learning how to

compete successfully against established retailers in each

channel simultaneously. The new company is confident

that it will meet the challenge and looks forward to

a future where it is the master of a completely new

and memorable shopping experience for the jewellery

consumer of tomorrow. ■


IDEX India Jan 2011 No Hindi

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