By Ashley Bailey
, Wednesday, August 02, 2006
JCK Convention, Las Vegas
June 5, 2006
Martin Rapaport addressed an international audience on June 5, 2006 at the JCK convention in Las Vegas. His main points were economics, distribution and ethical issues in the diamond and jewelry trade. Here is our summary of his comments:
Distribution - Adding value!
Pricing is unpredictable. Rough prices are increased without relation to polished. With high bank debts and high interest rates it’s hard to make money. For retailers bad inventory decisions compound the issue: Bad inventory increases costs & prices but destroys value proposition. Siteholders turn their inventory over 3 times per year. Most retailers turn it over only 1 time per year, so bad decisions stay with you. The world can ‘pass you by’ if you make bad inventory decisions.
For vendors it is about adding value to your product. Price may not be everything but value is everything. The profit we make should be for added value (returns, trade-up, extra service), not to cover up overbuying or overpaying for bad inventory. Sensible buying decisions, good inventory and competitive pricing result in the opportunity to add value. In business to business efforts more of us should pay cash to get a better price. Paying less increases our margins.
Retailers can compete for consumer business by adding value for fair price. The internet is attractive to shoppers. The internet cannot replace the emotional aspect of shopping retail, but shoppers will be checking on the internet to get info. It’s a transparent world. Customers know prices, so what are you doing to add value? Ask yourself; is an educated consumer our best consumer?
DeBeers is creating good marketing for all of us. We should take advantage of this by positioning our products. Branding is key. Brands are legal monopolies. They are controlled commodities. Your brand can be a product, a line of products or even the name of your store. Brands are very good for consumers because of the trust and consistency they represent. Brands are our future. Beware though, that brands are easily destroyed by lack of consistency.
What are you doing to add value to your product beyond the product?