David Yurman -- Geographic Expansion Strategy by Chang Sun

DAV I D Y U R M A N MARKET INTENSIFICATION – HONG KONG

A PROCESS BOOK IN GLOBAL DISTRIBUTION FOR LUXURY BRANDS

Prof. Alessandro Cannata Alexis Ardelean – Courtney Denton Chang Sun – Christina Greifenstein

CONTENT 1. Brand Analysis 1.1 Company History 1.2 Current Status and Growth Plans 1.3 Current Distribution 1.4 Retail Brand Identity Analysis 1.5 Competitive Analysis and Current Positioning in the Market 1.6 First Three Steps of the Strategic Planning Process 2. Market and Location Analysis 2.1 A.T. Kearney Metrics 2.2 PESTEL Analysis 2.3 Market Analysis 2.4 Key Players 2.5 Target Consumer 2.6 Store Location 2.7 Product Plan 2.8 Design of the Space 3. Omnichannel Communication and Promotional Plan 3.1 Communication Mix and Experience Design 3.2 ROI Measurement and Objectives 3.3 Promotional Schedule and Budget 3.4 Financial Forecast 4. Executive Summary

DAV I D Y U R M A N

1.1 Company History

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Current Status and Growth Plans

COMPANY HISTORY

1980

1983

1997

2000

2017

Today

David Yurman was launched in

Introduction of the now-signature

They became known for their

The first lifestyle shoot with Peter

The book “David Yurman’s Cable

The company is still family-owned

1980 by David and Sybil Yurman,

piece: the cable bracelet which

unconventional use of materials:

Lindbergh and AMber Valetta as

“ was published by Rizzoli, where

and run by David, Sybil and their

two artists who committed to craft

was a commercial success and

diamonds in sterling silver jewelry

the ambassador of the brand was

the archetypal form and David

son Evan Yurman

jewelry as artworks

springboarded the brand

which transformed the industry of

shot in St. Barts

Yurman’s artistic use of this visual

fine jewelry

icon is explored

DEVELOPMENT OF A MISSION STATEMENT David Yurman is a timeless model of inspiration, innovation and consummate craftsmanship. Founded by artists, rooted in artistry – we will stay true to who we are as a family and business as we embark on our global expansion in search of our voice overseas.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Company History

DAV I D Y U R M A N

1.2 Current Status and Growth Plans

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Current Status and Growth Plans

CURRENT STATUS

CURRENT OWNERSHIP

NEW ENTRANT: BRANDED JEWELRY David Yurman is a privately owned company. They are not obliged to disclose sales and revenue figures

HEADQUARTERS IN TRIBECA, NYC David Yurman is currently based in a discreet and sleek Manhattan building, adjacent to the entrance of Holland Tunnel with a quiet and beautiful street setting. Tribeca headquarters not only holds an extensive jewelry archive of approximately 9,000 jewelry pieces, 35 artisans, 50 jewelry makers, and other employees, it is also the Yurman’s living loft for the past 40 years. The neighborhood features artist’s studio and lofts and is a lively neighborhood.

EVAN YURMAN

DAVID YURMAN

SYBIL YURMAN

Chief Creative Officer

Chairman, CEO, and

Co-Founder and

Co-Founder

Chief Brand Officer

FEMALE FRIENDLY COMPANY Co-founded by a woman, David Yurman is well-known for its female-friendly working environment. It has almost 80 percent female at the executive level and 73 percent in its entirety (compared to a national average of 19 percent) (WWD, 2018).

FAMILY-BASED BUSINESS David, a sculptor, and his wife Sybil, a painter, built the brand David Yurman out of their passion for art and design. In 2003, their son, Evan Yurman joined the company, assuming the integral role in the design direction of the Men’s, Wedding and High Jewelry Collections. Today, Evan collaborates with David and Sybil on every aspect of the business, and the current ownership is still in the family’s hands.

CAROL PENNELLI

CAREY KRUG

President and

Chief Marketing Officer

Chief Commercial Officer

“We are a family — a closeknit group of dreamers, makers, designers, stylists, renegades and storytellers.”

– EVAN YURMAN 10

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Current Status and Growth Plans

GROWTH PLANS

FOCUS ON MEN’S JEWELRY David Yurman is one of the few brands that is established in men’s jewelry. This is an untapped

STRENGTHEN NORTH AMERICAN MARKET WITH A GLOBAL VISION David Yurman has expanded across the United States since it was founded. In 2018, their flagship store in Manhattan moved to Madison Avenue, ushering in a new era as a rebranding strategy. By positioning itself alongside global luxury brands in New York’s most luxurious corridor, it is particularly attractive to an international customer. The new global flagship store highlights the brand’s identity, its heritage, and American roots, yet it is forward-thinking and engaging for a new generation of customers. Outside the United States, the brand currently encounters the global market at a steady pace, taking the North America market as a starting point. In Canada, David Yurman newly expanded shop-in-shop at Holt Renfrew Vancouver (2016). It is the

market potential, not including watches, it represents 6% to 8% of the U.S. market for fine jewelry (Hurley, 2007). Evan Yurman started designing jewelry at a very young age, with a particular focus on men’s jewelry design featured with unusual materials like Pietersite stone and dinosaur bone. Then he became chief creative officer and led the development and expansion of the men’s division since 2004. Men’s jewelry has grown into a significant part of the business over the past 15 years.

largest shop-in-shop to broaden the footprint within the country. The expansion is a synergy with the company’s five-year boom strategy in the Canadian market, specifically in Vancouver.

FOCUS ON A LOYAL CLIENTELE The brand has a very loyal clientele who loves the brand’s aesthetic. At the same time, David Yurman continually offers newness that attracts new customers according to Erica Foland, a vice president and divisional merchandise manager of designer jewelry at Neiman Marcus. For example, recently at the Chicago store, around 400 customers showed up to meet Mr. Yurman and pose with him for a selfie. Another factor contributing to customer loyalty is the brand’s social sustainability awareness, namely

“You gravitate toward where you’re accepted, the growth has been phenomenal. It’s off the charts how strong the business is. But the particular strength is, not across the board but percentage-wise, it’s more to the unique, super high-quality.” – DAVID YURMAN

“Yurmanites.” David Yurman is a company that has long been a proponent of female empowerment and gender equality issue. Ku-Ling Yurman, filmmaker and Evan Yurman’s wife, is the executive producer of the new documentary “This Changes Everything,” a feature-length documentary that examines Hollywood’s gender bias. “Our objective is to bring about actual change,” says Ku-Ling. “We have a collective responsibility to take ownership of this issue and activate a higher standard for gender equality.” David Yurman is also bolstering young artists with various charitable practices. They established David & Sybil Yurman Humanitarian and Arts Foundation in 2001 to give back to the community through the support and the awards to individuals. Wedding and High Jewelry Collections. Today, Evan collaborates with David and Sybil on every aspect of the business, and the current ownership is still in the family’s hands.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Current Status and Growth Plans

DAV I D Y U R M A N

1.3 Current Distribution

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Process

DAVID YURMAN BOUTIQUE

AUTHORIZED RETAILER

David Yurman operates 49 wholly-owned self-standing stores and shop-in-shop.

David Yurman operates more than 350 worldwide networks on wholesale accounts

In the U.S. there are 38 stores in 19 major states. In Canada there are a total of 5

and pursues a very selective distribution: only carefully identified retailers that are

stores in Calgary, Vancouver and Toronto. Apart from the North American market,

matching the brand image are chosen.

David Yurman operates two stores in Paris, France.

DEPARTMENT STORES Sacks Fifth Avenue / Bloomingdale / Neiman Marcus / Nordstorm, etc

JEWELRY SPECIALITY RETAILER: London Jewelers / Leonardo Jewelers / Reeds / Levy Jewelers, etc.

ONLINE DISTRIBUTION David Yurman has various authorized online distribution channels. However, the brand’s products are also sold through unauthorized online channels, like Amazon. In 2014, David Yurman had a lawsuit with Sam’s club.

DAVID YURMAN’S WEBSITE:

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Complementary two-

SELECTED E-COMMERCE PLATFORMS:

day shipping & returns to

Farfetch

AUTHORIZED & PARTNERSHIP RETAILERS’ WEBSITES:

Canada and U.S. only

Mr. Porter with a selection

Sacks Fifth Avenue,

of men’s collection

Neiman Marcus, etc

Current Distribution

GLOBAL DISTRIBUTION

ICONIC STORE

David Yurman is distributed worldwide mainly through partnerships with authorized

It is worth mentioning Daivd Yurman’s iconic store as a special retail distribution. Before 2019, David Yurman

retailers. Apart from France and Canada, the brand also opened authorized stores in

operated a flagship store at Madison 63rd in Manhattan Upper East Side. The store applied the Yurman’s art

regional shopping centers in Asia:

concepts into the retail design through natural material touchstones and sophisticated interior, providing unseen benefits for the clientele. It also featured with welcoming and accessible service, far away from the high-end intimidating atmosphere.

CHINA

MIDDLE EAST:

Lane Crawford, HK

United Arab Emirates(2), Qatar(1), Saudi Arabia(1)

RUSSIA TSUM

Bloomingdale Dubai Mall, Harvey Nichols Mall of Emirates

In the second half of 2019, this flagship store will be relocated down to 57th. The new retail location brings David Yurman into a new category of the neighbor of massive luxury brands — Dior, Louis Vuitton, Burberry, Fendi, and Miu Miu. The new 5,000-square-foot space will showcase the entire breadth of Yurman’s many collections — including its high jewelry, women’s, men’s and wedding collections, plus timepieces. These collections will be displayed across three floors of the retail boutique with two private salons, three-story atrium, and lounges. New David Yurman Flagship highlights the company’s unique heritage, touring consumers the journey from art to jewelry, innovative technology, and client experience that dedicating to an immersive environment, offering a peek into Evan’s creative mind and design inspirations in which customer feels at home. New David Yurman Flagship is an important part of its rebranding strategy: a new brand image with a global luxury positioning.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Current Distribution

DAV I D Y U R M A N

1.4 Retail Brand Identity Analysis

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

DAVID YURMAN’S BOUTIQUE IN D.C. CityCenterDC 924 Palmer Alley NW,

DY OWNED BOUTIQUES

Washington, D.C. 20001.

• Similar sleek interior design

The David Yurman boutique features extravagant interior design. In every DY-owned store, there are paintings and sculptors incoporated and a small

• Nontheless, approachable

overview of the companiy’s history is given.

DAVID YURMAN’S BOUTIQUE IN SOHO, NY 114 Prince St, New York, NY 10012

• Integration of the founder’s paintings and sculptors

• Featuring all collections • Sometimes transformed into a Pop-Up Store

DAVID YURMAN’S BOUTIQUE IN CHICAGO 919 N Michigan Ave, Chicago, IL 60611

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Retail Brand Identity Analysis

DAVID YURMAN X PRINTEMPS PARIS

LICENSED RETAILERS

In 2016, David Yurman launched a Christmas Pop-Up at the Parisian department store

The David Yurman section within licensed retailers features similar interior

Printemps.

design in order to tie the loactions together. Ffrom the very beginning, branding was central at the boots to set the David Yurman brand apart and

In April 2018, David Yurman opened a

enhance customer recognition.

Men’s only boutique within the premises of Printemps Paris.

Canada – about 960 square feet on the ground floor of Holt Renfrew’s (150,000 square foot four-level) flagship in The CORE shopping centre

DAVID YURMAN X MIDDLE EAST In 2016, David Yurman expanded to the Middle East by affiliating a Pop-Up in Dubai at Bloomingdales.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Retail Brand Identity Analysis

POP-UP STORE DAVID YURMAN X FONDAZIONE GERONIMO In collaboration with the artist Jihan Zencirli (also known as Geronimo) a project was launched which includes a capsule collection of cable bracelets, an experiential space at Madison Square Garden and a pop-up at the Soho store.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Retail Brand Identity Analysis

PRODUCT

PRODUCT PRESENTATION

As America’s foremost luxury jewelry and timepiece brand, David Yurman offers products with cutting-edge materials for men and women. Bracelets, rings, necklaces and pendants, earrings, watches and a wedding and engagement collection is part of the product offering. As of 2019, David

BRANDING

Yurman has 37 different collections to offer and the customer can choose

David Yurman, always being an American luxury brand, was

between materials such as gold, silver, rose gold or white gold, various

focused on accessibility while also offering top of the range

gemstones or pearl but also metal and sterling is an option.

jewelry. That is also innate to the product presentation. Thus, the branding is following a minimal style with a focus

“In 1983, the piece that has become the company’s trademark was introduced

on the brand name in order to augment customer recall.

— a knotted cable shaped into a sturdy silver bracelet, at once precious and

Consequently, the brand is approachable for every kind of

casual, confident but not showy and appealing to a wide demographic” (New

women and the different options within the product range

York Times, 2017). David Yurman is most known for their “cable bracelets”

(and as a consequence the price to pay for) is appealing to

which are often adorned with gemstones, diamonds or other precious

different women.

materials. Still today, the cable-detailed items are the most prominent ones, but David Yurman has grown beyond and now offers a variety of styles.

PRODUCT DISPLAY As the founders are two artists, this is conducive to the store design. Consequently, a rather artistic approach is chosen, with sculptures and paintings in the actual stores. Whereas the jewelry is most times presented in simplistic product displays.

PACKAGING Also, the packaging is following a very simplistic format. While boxes are black, style elements like ribbons or small pouches are white, in tones of grey or silver materials. Still today, the cable-detailed items are the most prominent ones, but David Yurman has grown beyond and now offers a variety of styles.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Retail Brand Identity Analysis

PROPERTY The headquarters are located in New York and so was their first boutique. David Yurman currently operates 47 stores worldwide (mainly in the US, and further in Canada and Paris). Products are also sold at authorized retailers. To clearly communicate the David Yurman brand identity, the product display shows a clearly visible similarity with DY-operated boutiques.

The flagship store on Madison Avenue in New York is “characterized by a dramatic interplay between expansive height and compressive, intimate spaces and the use of rich, textured materials, [which is] the result of a collaboration between New York-based architectural and interior design firm Gabellini Sheppard Associates and New York-based lighting designer Cooley

In one part of their headquarters, about 50 jewelry makers design the pieces, partly by hand and partly digitally. The pieces are then crafted by artisans around the world. At their headquarters, the brand also hosts an archive with over 9000 pieces of jewelry (New York Times, 2017). The founders being artists, the boutiques reflect that with sculptures and paintings represented there. A wall with the brand’s heritage, and publications complements the product display in the stores. In general, “the brand’s boutiques are welcoming, with accessibility that has resonated with fans who

Monato Studio” (Design Retail). The combination of diffused and directional light is integrated in every aspect of the store design which creates both a vivid and inviting environment. Adjustable fixtures were custom-designed to fit into the wooden ceilings of the store. Materials within the sales area can include American walnut, antique brass, travertine, and artisan plasters, and are combined with vintage furniture and decorative elements alongside simple, natural shapes (PR Newswire, 2018).

might find some other high-end jewellers intimidating.” (New York Times, 2017). That is what sets the brand apart from a property point of view. The stores are located in close proximity to other luxury brands and can be found on “streets such as Rodeo Drive, Madison Avenue and Michigan Avenue” (New York Times, 2017). They vary in size: on Madison Avenue the store spans over three floors, while others can be as little as 600 square feet.

“The brand’s boutiques are welcoming, with accessibility that has resonated with fans who might find some other high-end jewelers intimidating.” NEW YORK TIMES, 2017

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Retail Brand Identity Analysis

PEOPLE

In F/W 2016, for the first time, the brand published a campaign entirely in color, which is further

Employees in the David Yurman boutiques are dressed professionally and in neutral

emphasizing the brands focus

colors. Upon entering the store, the customer is approached by the sales experts,

welcomed individually and offered something to drink. Sales experts are discrete but

conveying

energy.

very approachable in case of questions and interests in particular designs.

lifestyle

and

Ever since, colors

shifted from black and white, desaturated tones to colorful campaigns. David Yurman also

“David Yurman revolutionized the jewelry and design worlds with advertising campaigns

started to introduce a diverse

that were a divergence from the typical still life jewelry ads at the time, bringing lifestyle

group of models and particularly

and energy into the photos” (PR Newswire, 2016). In campaigns, the natural confidence

in the F/W 2018 campaign,

of women is in the focus and further, the brand is strongly engaging in celebrity

models of different backgrounds

endorsements to alter the brands’ image and tie it to additional values.

were chosen.

David Yurman worked with models of a rather conformist notion of beauty throughout

For Spring/Summer 2019, David Yurman collaborated with the Jamaican artists Mykal Rose, Sly & Robbie,

the last years. Particularly the long-lasting collaboration with Kate Moss shaped the

and Ernest Ranglin to cover “I Put a Spell on You.” Models featured in the campaign were Joan Smalls,

brand’s identity. In fall 2014, after a three-year-long pause when the brand worked with

Meghan Roche, Florence Clapcott.

decade of joint collaboration. Another ambassador can be identified as Anna Ewers, as she is booked regularly for various campaigns over the last few years.

PEOPLE

models such as Gisele Bündchen and Kate Upton, Kate Moss returned which marked a

The most recent campaign, SS 19, was in collaboration with the Jamaican artists Mykal Rose, Sly & Robbie, and Ernest Ranglin to cover “I Put a Spell on You.” and featured models of different backgrounds. Also Anna Ewers, a long-lasting model for the last campaigns, participated 32

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Retail Brand Identity Analysis

PROMOTIONAL ACTIVITIES The most recent promotional activity David Yurman launched, was in the event of the Pride Parade in remembrance of the 50th anniversary of Stonewall. The brand supported the Human Rights Campaign and offered a limited-edition tag in rainbow colors.

A collaboration with the artist Jihan Zencirli (also known as Geronimo) launched for Summer 2019. Geronimo is most known for her huge balloon installations across the city. David Yurman launched a limited Solari collection with colorful gemstones. Further, the brand introduced a NYC wide campaign announcing the collaboration, launched various events with the artist and installations throughout the city, and also changed the shop design of the SoHo store. Particularly this promotion is targeting a different market: with popping colors and kitsch designs, the brand is adopting a different aesthetic and thus reaching a younger, Gen Z audience.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

DAV I D Y U R M A N

1.5 Competitive Analysis and Current Positioning in the Market

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

PRICE ACCESSABILITY MATRIX PERCEPTUAL MAP

High Price

Low Distribution

Accessibility

Low Price

PERCEPTUAL MAP Wide Product Assortment

Modern Design

Traditional Traditional Design Design

Modern Design

Narrow Product Assortment

Our Price and Accessibility Matrix is formatted by the vertical axis ranging from

The perceptual map is configured to have a wide to narrow product

low to high pricing. On the horizontal axis is low distribution to accessibility.

assortment on the vertical axis. On the horizontal axis, it is positioned by

We positioned David Yurman towards low distribution and on the higher price

modern designs and traditional designs. David Yurman on the perceptual

side because it only has 33 physical stores in the United States and is priced

map is placed by traditional design and narrow product assortment. Their

at moderate to high. Compared to its competitors such as Kay and Zales that

assortment is narrowed to jewelry, whereas others have home goods, office

have 700-2,000 locations and are priced low to moderate. David Yurman is

utensils, fragrances, etc. Also, David Yurman has kept a traditional design

in direct competition with jewelry such as Chopard and Tiffany in terms of

that is a signature for the brand. Kay Jewelers and Pandora also have a

pricing and accessibility.

narrow assortment and have stuck to conventional designs as well.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Competitive Analysis and Current Positioning in the Market

PRICING AND DISTRIBUTION OF THE BRAND’S PRODUCTS OR SERVICES IN RELATION TO ITS DIRECT COMPETITORS

David Yurman’s prices range from $165 ring to a $32,000 necklace and hold an assortment of bracelets, rings, necklaces, earrings, watches, pendants, chains and cufflinks. David Yurman’s in-store services by appointment include gifting, engagement and wedding, styling, and product services. In gifting, the brand ambassadors assist the customer in picking a perfect piece of jewelry for a loved one. In wedding & engagements, a wedding specialist will assist the customer with any questions they may have and will show the customer what they have to offer. For styling, David Yurman’s brand ambassadors set up a personalized styling session that provides information on the latest products they offer and what would compliment the client’s style. Lastly, is product services, David Yurman suggests to the customers that if a piece loses its luster or a clasp loosens, to bring it in so that they can restore the piece with their experienced staff. The online store has complimentary 2-day shipping and returns, excluding personalized items.

David Yurman online website is easy to use, fast and efficient. The site has tools such as social media and a “World of Yurman” tab to keep up with the latest news on the brand. It also provides online engraving services for customers that are not near a physical location. The brand scores 24%, which is gifted on the Digital IQ Index Distribution for watches and jewelry. The score is based on the company’s digital presence and its engagement with e-commerce.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Competitive Analysis and Current Positioning in the Market

DAV I D Y U R M A N

1.6 First Three Steps of the Strategic Planning Process

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

SITUATIONAL ANALYSIS When analyzing the David Yurman brand, we saw that they have many strengths. These strengths include having products with classic and timeless designs while also including an extremely diverse product assortment. With the diverse product assortment comes a diverse price assortment at the same time they are already a very well known brand in North America. With strengths comes weaknesses. Due to the lack of exposure to other cultures, there is a lack of community connection. With the limited exposure and personal connection from David Yurman brand to their customers overseas can result in purchasers lacking assurance of quality and potentially buying products elsewhere. When looking at a geographical expansion, there are a few threats that could affect the brands success in the new location. These threats look like: unfamiliarity to the brand and competing against other strong and established competitors which may have a loyal following who would not stray to a new brand. There is also the unfamiliarity to the new geographic location and finding a place to fit in and connect with their new community. However,

IDENTIFICATION OF DIFFERENTIAL ADVANTAGE(S) David Yurmanâ&#x20AC;&#x2122;s timeless and classic designs puts them at an advantage over other jewelers who stay true to trendy statement pieces. This classic concepts allows both women and men the opportunity of purchasing high quality jewelry that works for all occasions and never goes out of style. Their strong identity and presence in Northern America is an advantage when thinking about expanding into other cultures, because the locations they are taking over in North America are places where those from overseas become tourists. They are able to connect here in the United States which gives them the confidence to take on a new location. David Yurman is extremely high quality, while using raw materials and producing in the United States. They are able to create a wide range of product and price assortments which allows many people to experience the DY brand. Today, there are not many brands who have familial roots, people love supporting brands and companies that are created by families and keep their family ties and traditions throughout the years of production.

there are many opportunities including strengthening their global identity, creating and enhancing their guest experience and creating a stronger global David Yurman Community.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

First Three Steps of the Strategic Planning Process

2. MARKET AND LOCATION ANALYSIS

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

DAV I D Y U R M A N

2.1 A.T. Kearney Metrics

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Process

COUNTRYCountry RESEARCH AND ANALYSIS

Selection

David Yurman’s current footprint covers Hong Kong, Russia, and Middle

China > UAE > SA > Russia

Eastern countries, among which, China, Russia, United Arab Emirates, and

Saudi Arabia are listed in the A.T. Kearney’s Global Retail Development Index. Considering the selection criteria of risk and opportunities, which is 25% of the country risk and business risk, 25% of market attractiveness, 25% of market saturation, and 25% of Priorities: time pressure, we prioritize the country selection as China > United Arab Emirates > Saudi Arabia > Russia.

Risk (25%) - Country risk & Business risk

CHINA ONLINE OFFLINE INTEGRATION GRDI Rank: 2 Population: 1.38 billion GDP per Capita, PPP: $15,424 Total Retail Sales: $3.13 Trillion

• Retail maturity but still at a high growth rate • Consumption-driven economy • The leading position of e-commerce, omnichannel synergy, and new-retail

Market Attractiveness: 25% ARAB25% EMIRATES MarketUNITED Saturation: INNOVATION-FUELED GROWTH Time Pressure: 25%

strengthening their global identity, creating and enhancing their guest experience and

RUSSIA THE NEW NORMAL

GRDI Rank:11

GRDI Rank: 22

GRDI Rank: 5

Population: 9 million Population: 32 million David Yurman's current foot print covers China Hong Kong, Russia, and Middle East countries Population: 144 million GDP per Capita, PPP: $26,109 GDP per Capita, PPP: $67,696 GDP per Capita, PPP: $ 54,078 through authorized retailers, among which, China, Russia, United Arab Emirates, and Saudi Total Retail Sales: $434 billion Total Retail Sales: $73 Billion Total Retail Sales: $ 114 billion Arabia are on the A.T. Kearney’s Global Retail Development Index.

• Upward moving economics with a resilient annual increase, friendly taxation, and investment policies

• Changing local shopping patterns shaped

strategy expansion

• Domestic consumption in the luxury sector • Trade war between the U.S. and China • there are many opportunities including

SAUDI ARABIA A NEW COUNTRY VISION

by unique stripe emergence and digital technology

• Huge tourism economic potential despite security concern and high country risk

• Strong performance in luxury experience • Frequent activities in e-commerce offerings

creating a stronger global David Yurman

• Seek economic diversity to shift away from oil, with a specific focus on retailing

• Business-friendly regulations to support small financing retailers and foreign investments

• A close relationship with U.S. based apparel companies

• Low level of consumer confidence due to disposable income decline

• Value-oriented consumption • Retailing sectors focus on the regional market and large cities

• E-commerce emergence and fast growth • Entry barrier for foreign e-retailers

• Embrace open economy and brick-andmortar retail expansion

(including acquisitions from Amazon)

Community.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

A.T. Kearney Metrics

COUNTRY SELECTION CHINA – MARKET INTENSIFICATION STRATEGY IN HONG KONG Except for France, David Yurman does not have self-owned boutiques outside North America. In 2008, David Yurman partnered with Lane Crawford, as an authorized retailer in Hong Kong. Since then, the brand conducted localized marketing activities and opened Chinese based communication channels, for example the David Yurman WeChat account, WeChat embedded advertising, and representation on the Chinese Official website.

WHY DAVID YURMAN IN HONG KONG, CHINA? • Mainland China and Hong Kong are two large luxury markets with particularly high growth and volume in the jewelry sector

• The brand is seeking global presence, given the robust jewelry market forecast in the following decade

• Hong Kong serves as the anchor point to enter mainland China’s market

• Authorized retailer Lane Crawford has wide distribution chain across mainland China and Hong Kong

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

DAV I D Y U R M A N

2.2 PESTEL Analysis

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

SOCIAL

PESTEL ANALYSIS FOR HONG KONG, CHINA POLITICAL • Special Administrative Region (SAR) of the People’s Republic of China • Free trade agreement with mainland China • Hong Kong has a free port and does not levy any Customs tariffs on imports or exports, except four types of dutiable commodities

• • • •

The population reached to 7.45 million in 2018 The highly diversified cultural background of the residence Polarized social class structure Well-educated and cultivated citizens in general, ranked top 10 in the Education Status (WEF, 2017)

• Art vibe and frequent art fairs foster the public’s aesthetic level and taste; the government also promotes policies emphasizing the convention and exhibition (C&E) sector

• Tourists’ consumption pattern preference is more diversified • Strong social media presence of the younger generation

• Hong Kong “Occupation” riots and tense relationship with the central government due to the protesting for Hong Kong independence

• Guangdong-Hong Kong-Macao Greater Bay Area Development Plan was

TECHNOLOGICAL • Launched re-industrialization of HK$ 2 billion to subsidise

co-launched with the central government, aiming to be the core engines for

manufacturers to set up smart production lines and advance

development in the region as a synergy

industrial facilities

• Formulating tax concessions and measurement

• Fellowship scheme and research investment to support innovation and technology talents

ECONOMICAL • Real GDP was $364.8 billion in 2018, at a 3% growth rate, purchasing

• A digitalized society with various technology: mobile payments, e-commerce, advocate smart retailing, etc

power parity (PPP) was $58321.65

• Steady and boosting economic development, while the retail sales value decreased by 1.3% year-on-year in May 2019

• The world’s freest and the most service-oriented economy, with the service sector accounting for more than 90% of GDP.

• Tourism is strongly impacted by frequent turmoil and demonstration • High rent is the most pressing issue for Hong Kong’s retailing

ENVIRONMENTAL • Increasing awareness of environmental protection • Has a long history of environment regulations

LEGAL • Follows the basic law of P.R.China • The United Nations from time to time passes resolutions to impose sanctions on certain countries. Hong Kong will impose restrictions on trade and other activities according to the sanctions

• Member of the World Trade Organization, following the Agreement on Government Procurement (GPA) and fully protects intellectual property rights (IPR)

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

PESTEL Analysis

DAV I D Y U R M A N

2.3 Market Analysis

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

MARKET ANALYSIS PRODUCT CATEGORIES: LUXURY JEWELRY AND TIMEPIECES KEY FEATURES • The precious jewelry sector dominates Hong Kong’s jewelry industry

• Its development has been facilitated by the expansion of the local market, including sales to tourists

• Jewelers are profitable despite the challenging environment

• The net profit margin of Hong Kong SAR / Chinese jewelers improved by 4.9% percent

MARKET SIZE In terms of the luxury market and jewelry sector:

• Sales of luxury jewelry and watches occupied 21.8% of total sales in Hong Kong SAR luxury market

• Luxury jewelry sees current value growth of 5% in 2018 to reach HKD7.6 billion, whereas luxury timepieces grow by 5% in current value terms to reach HKD15.3 billion in 2018 thanks to the recovery of the economy In terms of the retail sector:

• Store-based retailing is a dominant distribution channel in terms of the total value for both the jewelry and timepieces market

• Internet retailing only contributed to around 1% of the total retail value in both markets

• sale and auctions 60

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Market Analysis

MARKET ANALYSIS PRODUCT CATEGORIES: LUXURY JEWELRY AND TIMEPIECES

GROWTH POTENTIAL

VIBRANT JEWELRY SECTOR ATMOSPHERE IN HONG KONG • The annual art and design festivals go along with fine jewelry and gemstone sale and auctions

• The younger audience is highly influential in luxury jewelry designs

• Annual conference and fairs for the jewelry sector, i.e., Hong Kong International Jewelry Show 2019

• New sales channels provide a boost, for example, omnichannel strategy benefits small luxury jewelry players, like Gucci and Hermès

Overall growth in the luxury market • Luxury jewelry is projected to increase at a 4% current value CAGR (2% 2018 constant value CAGR) over the forecast period to

High Jewellery consumption level compared with other luxury products • In 2018, people of Hong Kong spent an average

reach HKD8.4 billion in 2023.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

of $656 on watches and jewelry, ranking the highest worldwide

Tourist economy • Mainland Chinese customers are the key consumers in the Hong Kong SAR luxury market

• However, it is detrimental if Hong Kongmainland relationship worsen

Market Analysis

DAV I D Y U R M A N

2.4 Key Players

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

KEY PLAYERS IN HONG KONG CENTRAL

sPlayers Key Players

Key Players ayers

Tiffany & Co Tiffany & Co Tiffany & CoBvlgari (LVMH Bvlgari (LVMH Cartier (Tiffany & Co) Moët HennessyMoët Hennessy (Richemont SA,(Tiffany & Co) (Tiffany & Co) Louis Cie Financière) 18.1% retail value rsp 18.1% retail value rsp 18.1% retail value rsp Louis Brand (GBO) Brand (GBO) Vuitton SA) Vuitton SA) ail value rsp 18.8% retail value rsp Brand (GBO)

artier mont SA, nancière)

d (GBO)

Brand (GBO)

16.6% retail value rsp 16.6% retail value rsp 16.6% retail value rsp Brand (GBO) Brand (GBO) Brand (GBO)

Van Cleef & Arpels Van Cleef & Arpels Van Cleef & Arpels De Beers (De De Beers (De (Richemont SA, (Richemont SA, (Richemont SA, Beers Group) Beers Group) Financière) Financière) Financière)0.4% retail value rsp 0.4% retail value rsp 2.2% retail value rsp 2.2% retail value rsp Cartier Brand (GBO) Brand (GBO)

(Richemont SA, SA, Cie Financière) re)

18.8% rsp retail value rsp Brand (GBO)

Brand (GBO) 2.2% retail value rsp Tiffany & Co Tiffany & Co Brand (GBO) (Tiffany & Co)

(Tiffany & Co)

18.1% retail value18.1% rsp retail value rsp Brand (GBO) Brand (GBO)

Van Cleef & Arpels Van Cleef & Arpels (Richemont SA, (Richemont SA, Financière) Financière) 2.2% retail value rsp 2.2% retail value rsp Brand (GBO) Brand (GBO)

Bvlgari (LVMH Moët Hennessy Louis Vuitton SA)

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Brand (GBO)

De Beers (De Beers Group) 0.4% retail value rsp Brand (GBO) Bvlgari (LVMH Bvlgari (LVMH

Moët Hennessy Moët Hennessy Louis Louis Vuitton SA) Vuitton SA) 16.6% retail value16.6% rsp retail value rsp Brand (GBO) Brand (GBO)

De Beers (DeDe Beers (De Beers Group)Beers Group) 0.4% retail value 0.4% rsp retail value rsp Brand (GBO) Brand (GBO)

Key Players

DAV I D Y U R M A N

2.5 Target Consumer

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

CONSUMER LIFESTYLE GENDER: Gender fluid, products are made for both men and women, as both frequent the David Yurman stores.

AGE:

Many are in their early 20’s to 30’s shopping for themselves, while

others are in their late 40’s to 50’s buying as gifts to those who are younger.

INCOME:

CONSUMER BEHAVIOR The David Yurman consumer travels monthly to high end shopping destinations, while always following and staying on top of new product drops and trends. They thrive off of exclusive purchases, while every purchase they make affects their social status. They constantly seek their next purchases through social media platforms.

David Yurman consumers have a flexibility in their budget

to purchase luxury jewelry on a more occasional basis. In China, they are considered the mainstream consumer with a disposable income of $16,000$34,000 annually.

GEOGRAPHY: Central to the Financial District, those who travel to Hong Kong make the Central District a must on their list of to do’s and others will take mass transportation to spend their evening with the food and nightlife options.

LEISURE:

Travelling quarterly to luxurious destinations, adimate about

their nightlife and social appearance. Spend as much time enjoying Michelin like meals as they do shopping.

IDEOLOGY: Those who are located in/near the Central District of Hong Kong purchase products based on the status it will give them while wearing that particular product. Therefore, people will continue to buy and further expand their wallets on statement pieces and luxury jewelry to increase their status and accentuate their look.

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Target Consumer

CUSTOMER PERSONAS GEMMA CHAN

REMMY & JESS WU

Socialite , Fashion Guru, Foodie,

Instafamous, Volg Duo,

Jet Setter

Adventurer, Trendy

36 years of age

26 & 24 Years of Age

Oxford Graduate

Harvard Graduates

$130,000 Annual Income

$180,000 & $95,000 Annual Income

NY, Milan & Paris Fashion

Neurologist & Researcher

Week Attendee

Documenting Their Lives as They Go

Influencer

Spend Weekends Traveling

She leans on her jewlery to make

Follow Foodie & Fashion Trends

her statement

MICHELLE YEOH Mother, Business Woman, Fashion Enthusiast 56 years of age Royal Acadamy of Dance Alumni Comes From Old Money Forbes - The Worlds Most 100 Powerful Women List Simplistic silver jewlery with every outfit Classic and Timeless

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

CHRIS PANG Business Man, Bachelor, GQ 30 under 30 Business Man With Main Office in Hong Kong NYU Alumni $175,000 Annual Income Always sporting a sophisticated watch Aware of his style and willing to splurge on accessories

Target Consumer

DAV I D Y U R M A N

2.6 Store Location

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Process

TRADING AREA ANALYSIS Hong Kong’s Causeway Bay is widely known as the destination for luxury shopping with major local and global players. Shopping malls such as Fashion Walk and Lee Garden are attractions for tourists and locals. The district is very modern, hip, and oriented towards the West. Due to this close association to luxury, this is definitely a district to consider when analyzing Hong Kong’s neighbourhoods in regards to a new store opening of David Yurman. Nevertheless, the Central District, is a very rich cultural hub for artists, galleries and highclass design stores. Due to David Yurman’s roots in art, this is the perfect area to open a DY-owned boutique in Hong Kong. The Central District (mostly referred to as Central) is on the north shore of Hong Kong Island and the business district. It is not clearly defined: on the east it is bordering with Admiralty - which is sometimes considered part of Central. To the south, the Mid-levels area start. In general, the borough constitutes as “Chung Wan”. Most multinational corporations and banks are located there, a lot of luxury hotels in

HISTORY OF THE CENTRAL DISTRICT Since the British colonial era 1841, the central business district of Hong Kong was a centre of trade. While it was first established as a military base, it soon attracted people to trade and live there. While it was first open to all communities, it then established itself to be only for Westerners while Chinese were restricted to Shang Wang - a neighbourhood to the West. In only seven years, the population grew 5-times the size and governmental buildings were erected in the area which is now known as Government Hill. In the 19th century, the area was extended by reclaiming land from the ocean due to Hong Kong’s limited possibilities of growth. A total of 59 acres were added which now constitute most of the famous Central district. The district gained its name only in the 1980s when the subway was established. Originally it was called Kwan Tai Lo, but through connecting two stations of major lines the area soon became known as Central.

innovative architectural buildings and exquisite culinary restaurants and bars cater towards locals, expats and tourists. Nevertheless, there are also a lot of traditional restaurants and cultural events happening in this district. The Hong Kong Tourism Board defines “the historical venue as a landmark for creativity with more than 100 design studios, and retail shops and memorable dining experiences.” it is not only the prime location for retail but also numerous luxury flagship stores and mid-price shops are in the area. Right off the shore is the Hong Kong Convention and Exhibition Centre featuring many international art exhibitions – including Art Basel, – over the year. Close by is also Tai Kwun – the centre for heritage and Arts. The area also attracted many independent art galleries that now reside in the very centre of Central and contribute immensely to the culture movement happening in this district.

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Store Location

ABOUT THE CENTRAL DISTRICT

STORE LOCATION To key into the artistic and culturally rich atmosphere of the district, the store will be located on the intersection of Hollywood Road and Aberdeen Street.

EXPECTATION OF THE SHOPPER When visiting Central, both locals and tourists are looking for a multicultural environment, with luxury brands from the west and renowned, independent and innovative art galleries.

This is a complex shopping area and elevated cultural hub: it is close to the PMQ, a shopping center specialized in arts and design, as well as to the Tai Kwun Centre for Heritage and Arts. Further, it is a 10min walk from the Central subway station and a 12min walk from the station to the Hong Kong Airport Direct Express.

TRAFFIC FLOW & ACCESSIBILITY The Central area is one of the busiest districts in Hong Kong. While Queen’s Road Central is experiencing a lot of road traffic, there are several streets for pedestrians only. The district is very accessible for tourists as it is at the very heart of the city and one of the most visited quarters to experience the local environment while it is still open to international and western influences.

COST FACTOR The rent of retail space is exorbitantly high and currently at US$306 per square foot. Nevertheless, “High street retail rentals in Central are likely to drop 10 per cent while Causeway Bay, Tsim Sha Tsui and Mong Kok may see a 5 per cent decline by the end of 2018, according to data from Knight Frank” (SCMP, 2018). This also confirms Central as a very competitive area from a financial point of view.

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Store Location

AREA ATTRACTIONS Apart from Central being a major shopping attraction and a world for artlovers, there are also landmarks dating back to the colonial-era or buddhist temples to visit.

FURTHER ATTRACTIONS:

•

VICTORIA PEAK

•

LAN KWAI FONG

•

HONG KONG CITY HALL

•

STAR FERRY HONG KONG

•

HONG KONG OBSERVATION WHEEL

•

CENTRAL MID-LEVELS ESCALATORS

•

HONG KONG ZOO AND BOTANICAL GARDENS

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Process

ESTIMATED DIRECT COMPETITION western

jewelry

ESTIMATED INDIRECT COMPETITION

Even though the western jewellers can

Other

brands,

be seen as direct competition, each

such as Cartier and Bvlgari, are

considered competitors as they have DIRECT COMPETITION values and are targeting different a comparable symbolic standard for brand has a different brand heritage,

DIRECT COMPETITION customers, which is particularly

The area is very attractive for luxury brands, both small and large, from the west and east and results in a rich retail environment.

INDIRECT COMPETITION

locals. Also TSL and Chow Tai Fook

Even though the western jewellers can be seen as direct Other western jewelry brands, such as Cartier important to consider when looking at own a high market share.in the competition, each brand has a different brand heritage, and Bvlgari, area signify competition as Even though the western jewellers can be seen as direct Other western jewelry brands, such as Cartier values and are targeting different customers, which is they have a comparable competition, each brandbrand has a different brand heritage, and Bvlgari, in the area signify competition as symbolic standard for David Yurman’s position. particularly important considerwhich whenislooking at David locals.symbolic Also TSL and Chow values and are targeting differentto customers, they have a comparable standard for Tai Fook own a high particularly important to consider when looking at David locals. Also TSL and Chow share. Tai Fook own a high Yurman's brand position market Yurman's brand position

market share.

TIFFANY & CO.

CARTIER

A company with their infamous tiffany

Known to be the go to jeweler for

blue accents, designs known to the

those in the royal families, a piece for

common eye.

a heafty cost that will forever leave a mark on your peers.

HARRY WINSTON The name that comes with the connotaion of luxury jewelry. This is a classic destination for someone who wants durable products, that make a statement and last forever.

BVLGARI Large stones, bright colors and out of the box designs, this luxury brand makes a statement with each piece.

Store Location

AREA DEMOGRAPHIC

TOURISM

WHile Hong Kong’s population in 2018 at at 7.45 million was, the Central

In 2018, 65 million visitors came to Hong Kong. Since 2017, this number increased by

District accounts for 12,501 residents and has a density of 7554 people per

11.4% and indicated the rising market for tourism in Hong Kong.

km2 (2016). All charts below refer to the Central District only. Every year, 42.8 million travellers – who account for 77% of all tourists visiting the city – come from

WHY VISITORS

mainland China. They “contribute

FROM MAINLAND

35% to Hong Kong’s total retail sales, which is up from 15% 10

CHINA VISIT

years ago” (Nielsen). They spend

HONG KONG

US$ 2,900 each time they visit and 5 out of 10 tourists buy jewelry and watches.

LATEST TOURIST STATISTICS ORIGIN

JAN - JUN 2018

JAN - JUN 2019

% GROWTH

Total

30,606,039

34,871,856

+13.9

Mainland China

23,688,868

27,573,517

+16.4

Non-Mainland China

6,917,171

7,298,339

+5.5

Short-Haul Markets*

3,853,462

3,997,672

+3.7

Long-Haul Markets**

2,228,247

2,225,364

-0.1

*SHORT-HAUL MARKETS

**LONG-HAUL MARKETS

Taiwan, Japan, South Korea,

USA, Canafa, UK, France, Germany,

Indonesia, Malaysia, Philippines,

Australia

Singapore, Thailand (excluding Mainland China)

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Store Location

CUSTOMER SEGMENTATION According to BCG, there are 5 consumer profiles which were identified for the Chinese consumer: the Savvy Shopper, the Single Person, the Ecoconscious Consumer, the Passionate Trend Seeker, and the Connected Consumer. Following the identified customer profiles, particularly the Passionate Trend Seeker, but also the Savvy Shopper can be identified as the customer segment to which David Yurman should be catering.

PASSIONATE TREND SEEKER

SAVVY SHOPPER

• Following personal interests • Sensitive to extremely high prices • Globalization, technology and rising

• Interested in global trends • Independent shoppers (i.e. male grooming)

income levels influence the trend

• Travelling is crucial to that customer segment

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Store Location

SALES POTENTIAL • Reported GDP per capita of US$48,958 in 2018 (growth of +3% compared to 2017)

• • • •

Retail sales growth of +8,7% from 2017 to 2018 Hong Kong is the freest economy Chinese consumers desire overall more premium goods The 18-34 year old Hong Kong consumer tends to shop 52% more often than older generations (41% of 35+year olds)

• 18-34 year olds also shop premium/ luxury goods every 3 months

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Store Location

HUMAN RESOURCES

LEGAL ISSUES

The store manager and assistant manager are responsible for the budget

When considering to enter the Hong Kong market, the company residing out

allocation, HR & training, performance of the store, inventory and supervision

of Hong Kong has to either set a limited liability company in Hong Kong. This

of the sales experts.

requires to register the name and open a management seat. Then, the a retail store can be opened.

Three sales experts (who report to store manager and assistant manager) need to always be on the floor and communicate DY’s brand identity and

Limited liability and the advantageous tax rates are major advantages for

values to the customer, assist in case of questions as well as and assist

businesses in the particularly free economy.

customers in deciding to purchase jewelry. In order to manage the visual appearance of the floor and curate DY’s identity, a visual merchandiser will take care of the retail space.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

• • • •

no VAT levied on goods and services no capital duty tax or payroll tax property tax corporate income tax ( 16.5% )

Store Location

DAV I D Y U R M A N

2.7 Product Plan

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Process

ALLOCATION OF MERCHANDISE Our assortment plan for our Hong Kong store is going to be menâ&#x20AC;&#x2122;s and womenâ&#x20AC;&#x2122;s bracelets, rings, necklaces, watches, and earrings. The assortment plan consists of 35% bracelets, 20% rings, 20% Necklaces, 15% watches, and 10% earrings.

Womens Earrings 10%

ASSORTMENT PLAN Women & Mens Watches 15%

Womens & Mens Bracelets 35%

Women & Mens Necklaces 20%

Women & Mens Rings 20%

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Product Plan

DAV I D Y U R M A N

2.8 Design of the Space

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Process

DESIGN OF THE SPACE Details of the physical structure include exteriors, a floor plan, and traffic-flow variables. The structure layout plan is Herringbone, which uses parallel aisles to maximize space in a narrow retail location.

Store Front

Store Traffic

Security Instructions

SAFETY AND SECURITY We are going to have video cameras on all of the corners of the store and a security guard standing at the front entrance. There is going to be sensors in the tags and boxes of the merchandise. It will be connected to the alarm in the doorway. There is also going to be a first aid kit and a fire extinguisher in the back of the store.

D a v i d Yu r m a n - M a r k e t I n t e n s i f i c a t i o n

Design of the Space

VISUAL MERCHANDISING AND MERCHANDISE PRESENTATION Visual Merchandising and presentations are going to stay true to the Davin Yurman image but are also going to push boundaries with creative and compelling displays. Each visual merchandising display is going to drive customers in from not only curiosity but for pure decadence of our most exquisite jewelry. Our visual merchandising team is also going to be coming up with the best and innovative ways to create the fixtures.

WINDOW AND IN-STORE DISPLAYS Jewelry will be in display showcases with LED lighting to accentuate the pieces. Displays will also be experiential through factors such as augmented reality and create a multisensorial experience.

Interior

100

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Design of the Space

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Design of the Space

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APPEARANCE AND ATTITUDE OF EMPLOYEES Employees will be wearing all black and a recommended style of blazers, dress pants and shoes. When interacting with customers, they are to greet them at the door. They should see if the customer is looking for anything in particular. The employees will also be equipped with valuable knowledge of the merchandise to create a unique selling point to the customers. Finally, we want our employees to create a comfortable atmosphere through being kind and accommodating but not overwhelming.

CUSTOMER SERVICE PROCESS We want our customer service providers to be helpful and deliver quality service. They are going to accommodate our customer needs by providing gifting, styling, and offering drinks. They will also assist customers with exceptional product care and provide professional cleaning and servicing. Customer service will also offer complimentary two-day shipping and return on items ordered in-store.

SENSORIAL EXPERIENCE Our visuals are going to be aesthetically pleasing and are going to relate the elements of the area to our design. Our look is going to be modern and industrial architecture. We are going to incorporate colors such as navy blue, gold, black, and brown. Through scents, we want citrusy and woody notes to be diffused throughout the store, and with a tactile experience, everything is going to be smooth, sleek, and metallic to the touch. We are going to be playing background music such as the Hong Kong Philharmonic Orchestra to heighten the auditory experience. Lastly, we are going to elevate taste buds with champagne and chocolate-covered strawberries to create a savory-sweet, flavorful experience.

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Design of the Space

105

3. OMNICHANNEL COMMUNICATION AND PROMOTIONAL PLAN

106

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Process

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DAV I D Y U R M A N

3.1 Communication Mix and Experience Design

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COMMUNICATION CHANNELS

MARKET ENTRY STRATEGY

ONLINE CHANNELS

KEY MESSAGE: PRIMARY TARGET AUDIENCE: Affluent Savvy Shopper Passionate Trend Seeker

Wealthy individuals and tourists

WECHAT

Online Channels

Official account and Mini program tabs directing to the officialINSTAGRAM website Regular posts: Embedded link for online purchase Opening Announcement, Art Announcement Articles: projects, Activity reviews Boutique opening, art project, and activities' review Tagged by endorsement Moment Ads

From “knowing the brand” to “understanding the brand” and “liking the brand.”

• • • •

Official account and Mini program Tabs directing to the official website Embedded link for online purchases Announcement Articles: Boutique opening, art projects, and activities’ review

• Moment Ads

celebrities IGTV live during opening Hashtag: #DYHK

INSTAGRAM:

• Regular posts:

OFFICIAL WEBSITE

COMMUNICATION CHANNELS

SECONDARY TARGET AUDIENCE:

WECHAT:

Online Channels

COMMUNICATION CHANNELS

True David Yurman Aesthetics

- Opening Announcement,

New store opening info on the art projects, activity reviews main page - Tagged by celebrities endorsements

• IGTV live during the launch • Hashtag: #DYHK

OFFICIAL WEBSITE: New store opening info on the main page

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Communication Mix and Experience Design

111

OFFLINE CHANNELS OUTDOOR EXPERIENCE – ART RESIDENCE PROJECT COMMISSIONS David Yurman will do collaborations with local arts:

• Some of these will be launched with a limited HK jewelry collection • Finished work will become a permanent collection for the brand • A natural decor for an artistic retail environment that represents David • Aligning with DY’s artists supporting programs • Hashtag: #DYARTHK

• David Yurman and Sybil Yurman’s art collection exhibition to be held in the new store along with its opening

• Exhibition as a part of in-store signage, with regular change

PR Endorsement – invitation and VIP preview The brand ambassadors will be invited to the store opening and enjoy exhibitions’ VIP preview

• Famous couples, families, and individuals that cover the full range of target consumers and product range: men’s jewelry, weddings & couples, gender-neutral and gender fluid, family gift, Gen Z, engagement in art, etc.

• Welcome both in the mainland and Hong Kong • Global presence

COMMUNICATION CHANNELS

Yurman’s aesthetics

Instore Activities – Opening Ceremony and Regular Events

Offline Channels ENDORSEMENT AMBASSADOR

ENDORSMENT AMBASSADORS Artists’ commission:

• The comissioned work will be murals and sculptures • Murals are attractions for tourists and local celebrities, which can ultimately increase the foot traffic in the area

• Residence mural painting project outside DY’s front door, featured with local street art graffiti artists Faye Wong & Leah Dou

• Collaborate with Hoca Foundation, a local institution that welcomes the

Julian Cheng & Anita Yuen

Alyssa Chia

biggest names in the international street art scene to present shows twisting with Hong Kong culture

• Sculptures will be large scale installations as a public art

Billboard in MTR Digital Panel Distribution

• The conjunction of Central MTR Station and Hong Kong MTR Station • High reach on the quality audience through strategic locations among top quality stations This is a premium and creative communication platform for strategic highlights with the latest digital technology

• High impact with site exclusiveness • Maximization of ad message allowing digital display with motion and sound effect in a captive environment

• Expected exposure at 130% with 8 times repetition

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Communication Mix and Experience Design

113

DAV I D Y U R M A N

3.2 ROI Measurement and Objectives

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115

ROI MEASUREMENT AND OBJECTIVES ITEM

ONLINE

Instagram

MEIDA Opening & PR

• To inform and to remind • To stimulate purchase • Purchase directed from Instagram • Engage audience to particiembedded link pate in the activities • Total views of the IGTV • Research rate • Click rate from tag/hashtag

• • • •

Focus on the experience

• In store sales • Instagram post • Total post with Hashtag

To attract Direct to sells Bring in-store traffic

Billboard

116

MEASUREMENTS • Purchase directed from WeChat account • Numbers of click

WeChat

MEIDA

ONLINE

OBJECTIVES

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• In-store survey • Post purchase survey (online & offline) • Exposure rate • Footage

ROI Measurement and Objectives

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3.3 Promotional Schedule and Budget

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PROMOTIONAL SCHEDULE AND BUDGET Store Opening: 23th Mar & 24th Mar Rationale

• Coincide with annual art fairs: Art Central, Asian Contemporary Art Festival, Art Basel Hong Kong, etc. These art fairs make up of the Hong Kong Art March

• Enhance the true David Yurman’s experience through highlighting its connection with art

• Gathering target customers, both Hong Kong arrivals for art fairs and local residence and white-collars works around

PRE LAUNCH – ONLINE PREHEAT: • • • •

WeChat and Instagram post Website banner online Email announcement Offline: Billboard initiation & Art residence project launch

LAUNCH – OFFLINE EVENTS • Online: WeChat and Instagram reminder • Art residence project & In-store Exhibition on view (including VIP preview & public view on two consecutive days)

• The Yurman’s and endorsing celebrities’ attendance

POST LAUNCH – ONLINE-OFFLINE INTEGRATION • Online: WeChat and Ins review post • Offline: • Continuous Billboard Until one week later • Art residence project works to become permanent collection

• Prepare for the next in-store exhibition

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Process

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3.4 Financial Forecast

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SALES FORECAST # of Visitors

F.T.D % Conversion Footfall Conv. % Avr. Basket

COGS

Annually

18,000,000

Monthly Weekly SA

1,500,000 375,000

65,000 0.38 Day 1 25000 5.00%

28,750 0.38 Day 2 11057.69231 3.00%

28750 0.38 Day 3 11057.69231 3.00%

28750 0.38 Day 4 11057.69231 3.00%

28750 0.38 Day 5 11057.69231 3.00%

65,000 0.38 Day 6 25000 5.00%

65,000 0.38 Day 7 25000 5.00%

$1,772.50 TOT.REV $2,215,625.00 $332,343.75

$1,772.50 TOT.REV $587,992.79 $88,198.92

$1,772.50 TOT.REV $2,215,625.00 $332,343.75

Day 1 $775,468.75 $443,125.00 $443,125.00 $332,343.75

Day 2 $205,797.48 $117,598.56 $117,598.56 $88,198.92

Day 3 $205,797.48 $117,598.56 $117,598.56 $88,198.92

Day 4 $205,797.48 $117,598.56 $117,598.56 $88,198.92

Day 5 $205,797.48 $117,598.56 $117,598.56 $88,198.92

Day 6 $775,468.75 $443,125.00 $443,125.00 $332,343.75

Day 7 $775,468.75 $443,125.00 $443,125.00 $332,343.75

$221,562.50

$58,799.28

$221,562.50

Day 1 AVG. UNIT 1963 521

Day 2 AVG. UNIT 521 138

Day 3 AVG. UNIT 521 138

Day 4 AVG. UNIT 521 138

Day 5 AVG. UNIT 521 138

Day 6 AVG. UNIT 1963 521

Day 7 AVG. UNIT 1963 521

TOT. 7974 2117

682 222

181 59

682 222

2769 1636

403

107

403

Markup PRODUCT PLAN BRACELETS

85.00% % 0.35

RINGS

0.2

NECKLACES WATCHES

0.2 0.15

EARRINGS $8,998,846.15 $1,349,826.92

TOT.

UNITS SOLD BRACELETS RINGS

Annual Revenues

0.1

NECKLACES WATCHES EARRINGS

AVR.PRICE $395.00 $850.00 $650.00 $1,500.00 $550.00

$431,944,615

CUSTOMER PROFILES PRODUCT PLAN BRACELETS RINGS NECKLACES WATCHES EARRINGS

AVR.PRICE $395.00 $850.00 $650.00 $1,500.00 $550.00

Gemma

$ 1 0 0 0 0

Basket

Michelle $395.00 $0.00 $0.00 $0.00 $0.00

395.00

$ 0 0 0 1 1 $

AVR. BASKET

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Remmy & Jesse $0.00 $0.00 $0.00 $1,500.00 $550.00

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2,050.00

$ 2 2 0 0 0

Chris $395.00 $1,700.00 0 0 0

2,095.00

$ 0 1 0 1 0

$0.00 $850.00 $0.00 $1,500.00 0 $

2,350.00

1,722.50

Sales FOrecast

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OPERATIONS BUDGET

INCOME STATEMENT

ANNUALLY Rent

557,000

Utilities Insurance

15,000 10,000

Maintenance Subtotal

4,000 586,000

Others TOTAL

20,000 606,000

Net Sales

431,944,615

Cost of Revenue Gross Profit

64,791,692 367,152,923

Operating Human Resource

606,000 125,000

Logistics Promotion Total Expenses

LOGISTICS BUDGET ANNUALLY

Operating Income

LOGISTICS REPLENISHMENT FREIGHT WEEKLY ANNUALY

36,000 1,378,450 2,145,450 365,007,473

$3,000 $36,000

HUMAN RESOURCE BUDGET ANNUALY #

128

Store Manager Assistant Sales Manager

1 $ 1 $

70,000.00 55,000.00

Visual Merchandiser

1 $

Sales Experts Annual Estimated Commissions TOTAL

3 $

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$ $

70,000.00 55,000.00

50,000.00

40,000.00

$ 120,000.00 $ 920,000.00 $ 1,215,000.00

Sales Forecast

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EXECUTIVE SUMMARY AND KEY SUCCESS FACTORS

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Process

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EXECUTIVE SUMMARY At the end of the day, our goal is to continue to grow and expand as a brand. Part of growing comes with exploring a new geographic expansion and following our growth initiatives for David Yurman. After long debates, strategic analysis, and research we have concluded that this new geographic expansion into Hong Kong will be justified by the intensification of the brands current target market and the extension of product offerings. Currently, a full David Yurman experience is available in France, however, beyond that there is not a true David Yurman experience to those outside of North America. While there are authorized retailers selling a small variety of our products to guests throughout Europe and China, the opportunity for the full experience is still unavailable. Our geographic expansion location, to Central Hong Kong is the key to our future successes. Central is the destination for high end, luxury shopping where many brands and designers first expand when entering the China market. It is home to the worldâ&#x20AC;&#x2122;s most luxurious brands that can be found along the Hong Kong streets. The geographic location is a key space for not only tourists, but many upper class individuals who live hours away whom take transit just to shop these stores. It is also located in the center of the financial district which increases our target market outreach even more. Hong Kong ranked highest paid average of watch and jewelry purchases in 2018 and is expected to increase by 4% and become a 8.4 billion HKD by 2023. The size of the current market accompanied by our ability to reach a large number of our target market will help increase not only our brand identity, but our brand equity as well. Our guest experience along with a large assortment of timeless and classic designs will allow us to stand apart from our competitors and increase our presence across the Asian market.

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Summary And Key Success Factors

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https://www.truefacet.com/guide/david-yurman-artist-icon/ https://us.fashionnetwork.com/news/David-Yurman-opens-men-s-only-boutique-in-Printemps,971338. html https://planitagency.com/blog/david-yurman-timeless-or-transient http://content.time.com/time/specials/2007/article/0,28804,1647860_1648434_1644217,00.html https://americanbuildersquarterly.com/2018/07/26/laurent-charlet-david-yurman/ HAMANAKA, KARI. 2018. “Brands Pivot to Move with Times: The Luxury Industry Has Never Seen so Much Change, but Brands” WWD: Women’s Wear Daily.. SIDELL, MISTY WHITE. 2018. “David Yurman to Move Flagship to 57th Street” WWD: Women’s Wear Daily, October, 5. http://www.discoverhongkong.com/us/shop/where-to-shop/malls-and-department-stores/ifc-mall.jsp https://www.thestorefront.com/locations/hong-kong/central/ https://www.bycensus2016.gov.hk/en/bc-dp.html https://www.scmp.com/property/hong-kong-china/article/2177473/hong-kong-landlords-ponder-how-filllarge-retail-spaces https://www.statistics.gov.hk/pub/B71807FB2018XXXXB0100.pdf https://www.citypopulation.de/php/hongkong-admin.php?adm2id=A01 https://www.nielsen.com/cn/en/insights/article/2017/meet-todays-hong-kong-consumers/ https://www.nielsen.com/cn/en/insights/article/2017/hong-kong-remains-a-vibrant-retail-opportunity-formainland-chinese-travelers/ https://www.hotels.com/go/hong-kong/best-central-things-to-do?intlid=gghcty|trend https://www.opencompanyhongkong.com/start-a-retail-business-in-hong-kong https://www.opencompanyhongkong.com/establish-a-branch-in-hong-kong https://thehkshopper.com/wp-content/uploads/2015/01/hk-central-mtr.jpg http://hong-kong-economy-research.hktdc.com/business-news/article/Market-Environment/Economicand-Trade-Information-on-Hong-Kong/etihk/en/1/1X000000/1X09OVUL.htm https://www.thinkwithgoogle.com/intl/en-apac/trends-and-insights/new-luxury-shopper-hong-kong/ https://www.mckinsey.com/industries/retail/our-insights/here-comes-the-modern-chinese-consumer http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/China-s-MiddleClass-Consumers-Preferences-and-Spending-Trends/rp/en/1/1X000000/1X0AAQP5.htm http://www.discoverhongkong.com/common/images/about-hktb/pdf/tourism_stat_06_2019.pdf www.internations.org/go/moving-to-hong-kong/country-facts/hong-kong-music-opera-to-cantopop. http://product-industries-research.hktdc.com/business-news/subindex/en/Timepieces-Jewellery-OpticalGoods/1X3W6AOI/1/0.htm http://hong-kong-economy-research.hktdc.com/business-news/article/Market-Environment/Economicand-Trade-Information-on-Hong-Kong/etihk/en/1/1X000000/1X09OVUL.htm Luxury Timepieces in Hong Kong, China, Euromonitor, 2109 Luxury Jewelry in Hong Kong, China, Euromonitor, 2019 Luxury Goods in Hong Kong China, Analysis, Euromonitor, 2019 World Economic Forum, WEF https://www.tid.gov.hk/english/aboutus/advcommittee/reviewbody/reviewbody_hear_01.html http://product-industries-research.hktdc.com/business-news/article/Timepieces-Jewellery-OpticalGoods/Jewellery-Industry-in-Hong-Kong/hkip/en/1/1X3W6APH/1X001DFI.htm HTTPS://WWW.TRIPSAVVY.COM/SHOPPING-IN-CENTRAL-HONG-KONG-1535806 HTTPS://WWW.MCKINSEY.COM/FEATURED-INSIGHTS/ASIA-PACIFIC/MEET-THE-CHINESECONSUMER-OF-2020 HTTPS://WWW.BUSINESSOFFASHION.COM/ARTICLES/INTELLIGENCE/DECODING-THE-TRAVELLINGCHINESE-CONSUMER HTTPS://FINANCESONLINE.COM/10-MOST-LUXURIOUS-JEWELRY-BRANDS-IN-THE-WORLD/

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