Following a decade of rapid growth, online shopping is set to slow down significantly as the channel matures and competition increases. Furthermore the high spending young family shopper is the one most likely to curb spending as government cutbacks begin to bite. Retailers will have to work much harder to win and keep online customers says Verdict.
At the e-Retail 2010 and Beyond* conference this morning the independent retail analyst revealed that although online expenditure will increase by more than 56% to £35 billion by 2014, and will continue to outperform total retail, growth will slow considerably from previous years – indeed Verdict forecasts average annual growth between 2009 and 2014 will be 12% compared with an average of 35% per annum over the previous decade.
Moreover the most valuable and prolific shopper group, the 35-44 year olds, currently spending £6.2 billion online, and accounting for a over a third of online retail expenditure in 2009, are the ones most likely to cut back on spending.
The number of online shoppers is also heading for saturation – though Verdict predicts numbers will rise to 32.5 million in 2014 this will be only another four million shoppers, and their spend will be spread over far more websites as the number of retailers online continues to increase rapidly.
Malcolm Pinkerton, senior retail analyst said: “With the number of people shopping online becoming highly saturated, retailers will have to change and evolve their online strategies. Driving loyalty and increasing spend per head across all age groups will become vital factors to ensure growth.”
Driving higher spend from all demographic groups
The highest current spenders on line are the 34-44 year olds (£992 per head per year) followed by the 25-34 year olds (£806 per head). By tailoring both service and product range towards other, currently under spending age groups, retailers can maximise their online potential.
Furthermore physical retailers are at an advantage; Verdict’s research reveals 14 out of the Top 20 most used shopping sites belong to physical retailers and as a retailer’s multi channel shopper is the most valuable (because they spend well above the average), encouraging existing customers online and acquiring new online customers offers a clear opportunity.
It is the shoppers in the 15-24 and 55+ age groups which show the most growth potential. A third of shoppers aged 15-24 said the inclusion of pictures and videos on a website are important and these are also prolific users of mobiles. Retailers would be wise to build this into their strategy as it will be those that do who stand the best chance of converting this age group into regular customers.
Meanwhile for the 55+s the convenience of shopping online linked to trusted retail brands is a key attraction, especially as they become more internet savvy. Ensuring a customer experience that meets their service expectations will be key to their loyalty.
Sarah Peters, senior retail analyst added “The online shopper is extremely valuable. Retailers have had it relatively easy online over the past decade because of the channel’s rapid growth and lack of competition, but just as in overall retail, the next five years will be much more challenging. If they plan their strategy now and understand the change in the competitive dynamics they will be able to ensure they profit as a result.”
Tuesday, October 5, 2010
Tuesday, September 28, 2010
Over $10 million worth of diamonds sold in international auction in Hong Kong
On September 13-21, the 41st international auction to sell rough of special sizes was held during the Hong Kong Jewellery Fair.
33 companies from Hong Kong, Israel, Belgium, and India were invited; and 24 of them took part in the auction.
1605.54 carats of ALROSA’S rough was put out (89 lots), including 3 diamonds over 50 carats each. The biggest rough diamond put out to be auctioned weighed 95.77 carats.
81 lots were sold, with the sales total of USD10.20 million.
79 polished diamonds were put out at the polished auction, with the total weight of 286.00 carats. The biggest polished stone weighed 9.04 carats; and the most expensive one weighed 4.01 carats and cost USD52,089 per carat.
33 companies from the continental part of China, Hong Kong, India, Israel, the USA, Belgium, and Thailand took part in the polished auction.
In total, 69 polished diamonds were sold, with the total weight of 264.66 carats to the amount of USD3,323 thousand.
The companies invited by ALROSA to the rough and polished auctions participated actively. Their bids testified to selective demand for diamond products and high clients’ interest to rough and polished of fancy colors.
33 companies from Hong Kong, Israel, Belgium, and India were invited; and 24 of them took part in the auction.
1605.54 carats of ALROSA’S rough was put out (89 lots), including 3 diamonds over 50 carats each. The biggest rough diamond put out to be auctioned weighed 95.77 carats.
81 lots were sold, with the sales total of USD10.20 million.
79 polished diamonds were put out at the polished auction, with the total weight of 286.00 carats. The biggest polished stone weighed 9.04 carats; and the most expensive one weighed 4.01 carats and cost USD52,089 per carat.
33 companies from the continental part of China, Hong Kong, India, Israel, the USA, Belgium, and Thailand took part in the polished auction.
In total, 69 polished diamonds were sold, with the total weight of 264.66 carats to the amount of USD3,323 thousand.
The companies invited by ALROSA to the rough and polished auctions participated actively. Their bids testified to selective demand for diamond products and high clients’ interest to rough and polished of fancy colors.
Tuesday, September 21, 2010
Gold Sets New Record
Update: Gold inched above its previous record in early morning trading today to set a new high at $1,284.70 per ounce in London. Gold has been trading close to the $1,200 mark all month, so despite a string of records in the past week it is up only 4.3 percent in the past 30 days. The metal has risen 27 percent from one year ago. In other news this morning, silver added 14-cents at $20.91 per ounce and platinum is up $13 to $1,626 per ounce. The dollar is stable againsts major diamond trading center currencies: $1 = INR 45.69, $1 = EUR 0.76, $1 = JPY 85.7, $1 = CAD 1.04, $1 = ZAR 7.13.
Tuesday, September 7, 2010
Millionaire banker is Barclays boss
An American-born banker whose multimillion-pound pay rewards fuelled anger against the banking sector has been named in the top job at Barclays.
Bob Diamond will take over from chief executive John Varley in March after a 14-year spell with Barclays that has seen him turn its investment banking arm from scratch into a business so large it generates more than 80% of the bank's total profits.
The 59-year-old, one of the world's richest bankers, will be paid a £1.35 million annual salary, up from the current £250,000, and stands to receive potential bonuses worth another £10 million.
In a day of upheaval in the banking sector, HSBC executive chairman Stephen Green also announced plans to step down in favour of a role in David Cameron's government. Mr Green, who has been chairman since 2005, will replace Lord Davies, the former Standard Chartered boss, as Trade Minister.
Mr Diamond said he was "honoured" to take on the new role, but the move is likely to enrage some politicians and union leaders. Many consider Mr Diamond - with an estimated worth of £95 million - to be the epitome of the excessive bonus culture.
Although he waived his bonus last year after widespread criticism of bankers, he received £26 million for his shares in Barclays Global Investors, the bank's fund management business, when it was sold to America's BlackRock.
Mr Diamond was criticised in April by politicians including Lord Mandelson and Vince Cable when it was claimed he received £63 million under a reward scheme.
In his new role, Mr Diamond will receive an annual bonus of £3.375 million on top of his salary, as well as a long-term performance-based incentive worth up to £6.75 million.
Paul Kenny, general secretary of the GMB union, said the appointment was "insulting", adding: "These are the bankers who caused the recession sticking two fingers up at the taxpayers who rescued them.
"This is about as insulting and divisive as it gets. A person who poured petrol on the flames of the fires in the financial system has been rewarded rather than been punished for what he did."
Bob Diamond will take over from chief executive John Varley in March after a 14-year spell with Barclays that has seen him turn its investment banking arm from scratch into a business so large it generates more than 80% of the bank's total profits.
The 59-year-old, one of the world's richest bankers, will be paid a £1.35 million annual salary, up from the current £250,000, and stands to receive potential bonuses worth another £10 million.
In a day of upheaval in the banking sector, HSBC executive chairman Stephen Green also announced plans to step down in favour of a role in David Cameron's government. Mr Green, who has been chairman since 2005, will replace Lord Davies, the former Standard Chartered boss, as Trade Minister.
Mr Diamond said he was "honoured" to take on the new role, but the move is likely to enrage some politicians and union leaders. Many consider Mr Diamond - with an estimated worth of £95 million - to be the epitome of the excessive bonus culture.
Although he waived his bonus last year after widespread criticism of bankers, he received £26 million for his shares in Barclays Global Investors, the bank's fund management business, when it was sold to America's BlackRock.
Mr Diamond was criticised in April by politicians including Lord Mandelson and Vince Cable when it was claimed he received £63 million under a reward scheme.
In his new role, Mr Diamond will receive an annual bonus of £3.375 million on top of his salary, as well as a long-term performance-based incentive worth up to £6.75 million.
Paul Kenny, general secretary of the GMB union, said the appointment was "insulting", adding: "These are the bankers who caused the recession sticking two fingers up at the taxpayers who rescued them.
"This is about as insulting and divisive as it gets. A person who poured petrol on the flames of the fires in the financial system has been rewarded rather than been punished for what he did."
Monday, August 30, 2010
Rio Tinto to invest Rs 370-cr for diamond exploration in MP
British mining major, Rio Tinto, will be investing Rs 370-crore for exploration and mining of diamonds in Madhya Pradesh's Bunder town over the next three years, a senior State Government official said.
The Madhya Pradesh Government and Rio Tinto will be signing a Memorandum of Understanding (MoU) soon for the same, Madhya Pradesh's Additional Chief Secretary (Commerce, Industry and Employment), Satya Prakash, told reporters on the sidelines of an ASSOCHAM event here today.
Rio Tinto was given prospecting license for the project in 2006. Prakash also said that Bharat Petroleum Corporation Limited's (BPCL)'s refinery in Bina will commence trial production next month.
BPCL has invested Rs 10,600-crore in the refinery and over 90 per cent of the work is complete as of now, he said. Bina refinery is set up by BPCL's subsidiary Bharat Oman Refineries Limited and will be having a capacity to process 6-million tonnes of crude per annum.
The Madhya Pradesh Government and Rio Tinto will be signing a Memorandum of Understanding (MoU) soon for the same, Madhya Pradesh's Additional Chief Secretary (Commerce, Industry and Employment), Satya Prakash, told reporters on the sidelines of an ASSOCHAM event here today.
Rio Tinto was given prospecting license for the project in 2006. Prakash also said that Bharat Petroleum Corporation Limited's (BPCL)'s refinery in Bina will commence trial production next month.
BPCL has invested Rs 10,600-crore in the refinery and over 90 per cent of the work is complete as of now, he said. Bina refinery is set up by BPCL's subsidiary Bharat Oman Refineries Limited and will be having a capacity to process 6-million tonnes of crude per annum.
Friday, August 27, 2010
Market Stagnating Towards End of Summer?
The wholesale market is stable but relatively quiet as suppliers in Israel and Belgium slowly return from vacation. There is good demand for bread and butter rounds below 2.99-carats, in better qualities, while demand for 3.00-carat-plus stones has softened slightly. There has been a slight uptick in demand for smaller commercial goods. Retailers report increased traffic and better sales than expected for August. Demand for bridal stones is steady with 1.00- to 2.00-carat, G+, SI+ center stones being the most popular among consumers.
Sunday, August 1, 2010
JA NEW YORK SHOW FEEDBACK: US MARKET IS IMPROVING: THOUGH STILL HAS A WAY TO GO
The JA New York Summer Show was held in the Javits Center July 25-28. In a positive sign for the state of the industry, this year there were roughly 1,000 exhibiting companies, and a marked increase in corresponding attendee buyers at the show.
While some exhibitors mentioned the impression of lower foot traffic, the attendees who did participate were more focused. Rather than curious browsing, people seemed to be making the conscious decision to attend a trade show such as this one, "if they aren't of serious intention, they won't waste their time and resources to come," explained one.
One view as to the high level of exhibiting companies was that Vegas was so overwhelming and unexpectedly positive that many exhibitors came to the JA New York show assuming that the end to the slump was already here. These pundits might have been disappointed. As has been the theme over the past two years in the USA - the definition of success at a Trade Show is based on a short-term versus long-term objective. As one industry veteran observed: "Do you approach trade shows with a tangible 'turnover numbers' goal, or with a 'meaningful contacts made' goal?"
According to Gruenberger Diamonds, a US and Belgium-based diamond wholesaler: "Traffic is clearly up from last year. More significantly, the attendees are primarily retailers this year - and less dealers or brokers from 47th Street looking for a quick bargain". People are buying for stock rather than looking for a random ‘great deal’ to resell (as dealers).
Buyers are very subjective in their quest for quality. "We have seen that buyers are seeking higher-quality and more exact specifications in a shift toward selectiveness - even on lower-priced items, or even more so on the lower-priced items", is the explanation.
Many attendees had mostly prearranged their visit, with meetings set and specific people to see, rather than random browsing. Focus was the predominant theme, rather than curiosity. According to Pink Diamonds, a high-end jewelry manufacturer from California: "It doesn't matter so much how many pedestrians are in the show - if you plan to meet your customers, you have your meetings, like any show." Founder Sam Azemoon stressed that a Trade Show is also for advertising, and presenting your brand and identity, and not only to reach a target for "at-the-show sales numbers".
In general, the consensus was a "vast improvement over last year," said Maidi Corp, a US-based specialist in high-end fancy colored diamonds. "The US Market is improving and moving toward the direction where it used to be, but we still have a way to go". They joined in the recurring observation that people are now attending trade shows to buy, rather than out of simple curiosity.
Diamonds were not the only gems at the show. There was a clear focus on non-diamond materials, e.g. coral, cubic zirconium, semi-precious stones, beads, silver, etc. In the fashion designer pieces the emphasis was more on the unique design of the piece than on the commodity component of the jewelry. This was attributed to a more price-conscious consumer who would rather pay less for a unique item than pay more for a "high-value" item.
One company who is no stranger to such a shift in price-trend is A.V. Diamonds, a very large-scale Texas-based low "price point" jewelry manufacturer. According to A.V., customers are looking for "a larger look for a lower price". Even displaying items with a $129 price-point made of melee that gives a ‘one carat look’. "The larger diamonds sought after are of lower quality, because that's what consumers look for."
Although gold with diamonds still is, and will remain, crucial in the major US markets and in Canada, silver has grown much quicker than expected. In the Midwest USA and outside of NY there is increased demand for sterling silver with diamonds, and much less on higher-end pieces. "Three years ago we only would bring one tray of silver jewelry to a trade show," said an executive from A.V. Diamonds, "But today it makes up almost half of what we do (in volume)".
One might observe that manufacturers are able to redefine jewelry based on what can or cannot sell the diamonds. Lower priced diamonds can be set in a cheaper base-metal since the selling point of that piece is the diamond content.
Higher priced diamonds would be needed for the more designer or fashion pieces (to maintain the quality level), but this prohibitively increases the cost of such pieces. - Hence we are seeing other materials such as coral, semi-precious stones, or even those with no stone-component at all.
While some exhibitors mentioned the impression of lower foot traffic, the attendees who did participate were more focused. Rather than curious browsing, people seemed to be making the conscious decision to attend a trade show such as this one, "if they aren't of serious intention, they won't waste their time and resources to come," explained one.
One view as to the high level of exhibiting companies was that Vegas was so overwhelming and unexpectedly positive that many exhibitors came to the JA New York show assuming that the end to the slump was already here. These pundits might have been disappointed. As has been the theme over the past two years in the USA - the definition of success at a Trade Show is based on a short-term versus long-term objective. As one industry veteran observed: "Do you approach trade shows with a tangible 'turnover numbers' goal, or with a 'meaningful contacts made' goal?"
According to Gruenberger Diamonds, a US and Belgium-based diamond wholesaler: "Traffic is clearly up from last year. More significantly, the attendees are primarily retailers this year - and less dealers or brokers from 47th Street looking for a quick bargain". People are buying for stock rather than looking for a random ‘great deal’ to resell (as dealers).
Buyers are very subjective in their quest for quality. "We have seen that buyers are seeking higher-quality and more exact specifications in a shift toward selectiveness - even on lower-priced items, or even more so on the lower-priced items", is the explanation.
Many attendees had mostly prearranged their visit, with meetings set and specific people to see, rather than random browsing. Focus was the predominant theme, rather than curiosity. According to Pink Diamonds, a high-end jewelry manufacturer from California: "It doesn't matter so much how many pedestrians are in the show - if you plan to meet your customers, you have your meetings, like any show." Founder Sam Azemoon stressed that a Trade Show is also for advertising, and presenting your brand and identity, and not only to reach a target for "at-the-show sales numbers".
In general, the consensus was a "vast improvement over last year," said Maidi Corp, a US-based specialist in high-end fancy colored diamonds. "The US Market is improving and moving toward the direction where it used to be, but we still have a way to go". They joined in the recurring observation that people are now attending trade shows to buy, rather than out of simple curiosity.
Diamonds were not the only gems at the show. There was a clear focus on non-diamond materials, e.g. coral, cubic zirconium, semi-precious stones, beads, silver, etc. In the fashion designer pieces the emphasis was more on the unique design of the piece than on the commodity component of the jewelry. This was attributed to a more price-conscious consumer who would rather pay less for a unique item than pay more for a "high-value" item.
One company who is no stranger to such a shift in price-trend is A.V. Diamonds, a very large-scale Texas-based low "price point" jewelry manufacturer. According to A.V., customers are looking for "a larger look for a lower price". Even displaying items with a $129 price-point made of melee that gives a ‘one carat look’. "The larger diamonds sought after are of lower quality, because that's what consumers look for."
Although gold with diamonds still is, and will remain, crucial in the major US markets and in Canada, silver has grown much quicker than expected. In the Midwest USA and outside of NY there is increased demand for sterling silver with diamonds, and much less on higher-end pieces. "Three years ago we only would bring one tray of silver jewelry to a trade show," said an executive from A.V. Diamonds, "But today it makes up almost half of what we do (in volume)".
One might observe that manufacturers are able to redefine jewelry based on what can or cannot sell the diamonds. Lower priced diamonds can be set in a cheaper base-metal since the selling point of that piece is the diamond content.
Higher priced diamonds would be needed for the more designer or fashion pieces (to maintain the quality level), but this prohibitively increases the cost of such pieces. - Hence we are seeing other materials such as coral, semi-precious stones, or even those with no stone-component at all.
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