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Roadmap for G&J Product Manufacture Planning for the Coming Year!

Published Date : Jan 4, 2019

Why Product Planning is Important:

There was tremendous industry debate a few years ago, when diamonds and jewellery manufacturers found themselves with too much stock, having to either hold on for better times or sell too low. Diamond miners have relented slightly since then with regard to loosening up on sales contracts when consumer demand does not yield enough profits for mid-section players. As the mid-section, we must now resort to better planning.

Whether manufacturers of diamonds, gemstones or fine jewellery, we are at that time of year when business plans have to be drawn up for the coming year. Even diamond producers like De Beers are known to put together their sales and manufacturing plans for the upcoming year around December. This should be a big focus in the gems and jewellery industry, because raw materials cost a lot, and no one wants to be saddled with extra-stocks or lose opportunities by missing the mark on trends for designs and price points.

Today, the product planning process takes a lot more research and effort than it did in the past. While historically, the gems and jewellery industry has been quite resistant to change, consumer needs, demands and trends across the globe are changing more rapidly than we have ever seen in the past. Added to this is what has been the “elephant in the room” for quite some time now, but an elephant that is growing larger and larger and is likely to affect diamond sales herein on – lab-grown diamonds – because of the fact that De Beers has entered the retail space now, and is gunning for a universal push-down in prices in LGD. And so, if any players of the diamonds, gems and fine jewellery industry don’t hone a razor-sharp focus, they run the risk of being swept away like a torrent by those who do! 

What are Some Aspects of Product Planning?

Price points of pieces, quality of stones, sizes of stones, quantity of products, spread of manufacturing through the year including peaks during seasons, are some main decisions mid-stream players will have to make for the coming year. Commitments and arrangements for buying stones and supplying to retailers or the next step in the value-chain will depend on gauging these parameters accurately.  

How Should Manufacturing Planning Be Done?

If one looks at the timeline, most of the build-up to manufacturing and manufacturing itself would happen in the first half of the year. The second half is the peak retail period, getting kicked-off with the trade shows, followed by festivals and wedding season. Of course, some trade shows even happen during the first half of the year.

From January onwards, the creative ideas have to start flowing for the design process. This has to be in tune with current trends. This is dictated by current fashion sensibilities and also by the economy – both globally and specifically wherever one’s own business markets are. 

Raw material buying typically starts once designs are in place. Then, manufacturers dive headlong into the making process.

Understanding seasonal demand for gems and jewellery is a must before planning manufacturing and starting your own buying activity for raw material. The main seasons for jewellery purchase are Christmas, Chinese New Year, Wedding season, and Indian festivals like Diwali. With Indians sprawled all over the world, Diwali buying is not exclusively a phenomenon in India. It is also significant in the UAE and other places.

The U.S. wedding season is from June to October. It peaks in the summer (June to August). In India, the peak season for weddings is November and December, with a smaller season in April and May.

As diamond and jewellery gifting is more prevalent in India, the wedding season also sees sales for smaller pieces.

In China, the main sales season for diamond jewelry is around the Chinese Lunar New Year – late January to mid-February.

It’s important to study the kinds of pieces and price points that customers look at during specific festivals and seasons. This also changes from year to year, as per trends and economic conditions.  

Sweet-spot price points remain below $2,500(1), according to The Centurion Holiday Sales Success Index surveys. For holiday seasons 2014 through 2017, most respondents to The Centurion Holiday Sales Success Index surveys reported their best-selling price points were between $1,001 and $2,500. The second-most popular price category was goods between $500 and $1,000 and, in very close third place, goods under $500. Only 2016 saw a spike in sales of goods between $2,501 and $5,000—but with a corresponding spike in goods under $500—before returning to patterns more consistent with other recent years.

Regarding design trends and price points, reaching out to one’s own business associates on both sides of the chain is always a fruitful idea. Retailers are directly in touch with consumers, getting feedback from the proverbial “horse’s mouth”. Suppliers, on the other hand, can tell you what your contemporaries are purchasing.

There are innumerable research papers available for studying trends in design, sizes of stones, quality of stones, colours, metals, types of jewellery products, price points, seasonal trends based on geography, consumer segments, etc. (We have included some G&J research resources at the end of this article.) 

Internationally, trade show season (B2B) is usually before the peak sales season, with it starting from June, July and up to even November, December.

In summation, whether it’s the season sales or trade shows, or even retailers just stocking up, most of the sales are happening towards the latter part of the year. With everyone putting their best foot forward for B2B shows in anticipation of seasonal demand, preparations have to happen quite in advance. Naturally, one would have to stay on top of economic trends, and adjust price points accordingly. As we all know, last minute set-backs on account of policy changes or also fluctuations in prices of gold and currency do happen, and do affect buying sentiments.   

We’ve said it before and will say it again – all other things being equal, design trumps everything else!

Then, beyond the product planning for optimal sales and movement of goods, there are also other considerations like whether existing sales channels are working, or new ones should be devised.

There’s really no time to tarry. Let’s begin to PLAN, PLAN, PLAN!

 

Sources:

(1) https://news.centurionjewelry.com/articles/detail/holiday-season-brings-mixed-results-but-total-year-was-good-for-luxury-jewe

 

Resources:

(1) www.marketresearch.com ’s Jewelry Market Research Reports & Industry Analysis:

https://www.marketresearch.com/Consumer-Goods-c1596/Consumer-Goods-Retailing-c80/Jewelry-c1760/

(2) Global Gems and Jewelry Market Analysis By Product Type (Gold, Diamond, Platinum, Gems, Others), Sales Channel (Online, Retail, Jewelry Stores), By Region, By Country: Opportunities and Forecast (2017-2022): https://www.researchandmarkets.com/reports/4436343/global-gems-and-jewelry-market-analysis-by

(3) https://www.trendvisionforecasting.com/macrotrends-tags/tag/jewellery

- By GemAtlas Team