Competitive Advantages
| US | UK |
Management attributes the division’s success to a range of competitive advantages in customer service, human resources, merchandising, marketing, real estate and credit operations. These advantages are reflected in above industry average sales per store and operating profit margin. The principal competitive advantages are summarised below, and are explained in greater detail in this section of the website.
- Customer service and human resources
Experience demonstrates that a sales associate’s ability to communicate and explain the value and quality of merchandise plays a significant part in a retail jewellery purchase. Therefore, the US division has developed specialised training for its retail associates, and its size provides leverage of training resources and systems. The division now has at least one certified diamontologist in each of its stores and all store managers are required to be so qualified. - Merchandising and purchasing
Management believes that Signet has a significant supply chain advantage compared to its competitors as it purchases merchandise at every stage of the supply chain. Significant experience within the merchandising staff, greater capacity, better systems and Signet’s financial strength facilitate providing superior value, quality and consistency to the consumer. At the same time an above average gross margin percentage compared with the sector is achieved.
The division’s sophisticated merchandising systems test, track, forecast and respond to consumer preferences and assist in providing competitive advantage by ensuring high in-stock positions of key merchandising assortments. While offering a core merchandise selection within each brand, the division merchandises each store on an individual basis. The merchandising systems secure an increased turn of popular items, while minimizing inventory write-downs. - Marketing and advertising
Management believes that television advertising is the most effective form of marketing. Both Kay and Jared are two of a very limited number of US speciality retail jewellery brands with a presence large enough to justify national television advertising. This form of advertising is advantageous as growth in the number of advertising impressions benefits all the stores in the chain rather than just those in a particular market; it also greatly assists entering new local markets. Ancillary benefits such as guarantees relating to audience levels, improved access to the best advertising slots and programme sponsorship opportunities can be gained. - Real estate
Strict criteria are followed when evaluating real estate investment or lease renewal, and management believes that the quality of the store portfolio is superior to that of its competitors. The trading record and the strength of the Group balance sheet make Signet an attractive tenant. -
The ability to offer consumer credit provided by the division’s own in-house department rather than a third party provider is believed by management to be a competitive advantage in enabling sales. About 50% of the division’s sales utilise this facility.
Signet has a range of advantages in store operations and human resources, merchandising, marketing and real estate, compared to competitors within the UK speciality jewellery retail market and has access to leading US expertise. The principal competitive advantages are summarised below.
- Store operations and human resources
The division’s scale enables it to invest in industry-leading training, which is accredited the National Association of Goldsmiths. This is particularly important, as the sale of diamond jewellery requires increased standards of product knowledge and customer service from sales associates. - Merchandising and purchasing
Management believes that the division’s leading position in the UK jewellery sector is a commercial advantage when sourcing merchandise and enables delivery of better value to the customer. An example of this is its capacity to contract with jewellery manufacturers to assemble products, utilising directly sourced gold and loose polished diamonds. In addition, the division has the scale to utilise sophisticated merchandising systems to test, track, forecast and respond to consumer preferences. - Marketing and advertising
The UK division has strong and well established brands and leverages them with advertising (television, print and online), catalogues and the development of customer relationship marketing techniques. Few of its competitors have sufficient scale to utilise these marketing methods successfully. H.Samuel and Ernest Jones also provide the leading integrated e-commerce and retail store service to the consumer within the speciality jewellery sector. - Real estate
Strict criteria are followed when evaluating real estate investment and management believes that the quality of its store portfolio is superior to that of many of its competitors. The strength of the Group’s balance sheet and the division’s trading record makes it an attractive tenant. The well-tested H.Samuel and Ernest Jones revised store formats, which are more suited to customer service, enables the division to increase market share in that category. - Access to US expertise
The UK business benefits from its close relationship with Signet’s US operations. Synergy is gained by sharing knowledge in all aspects of retail best practice procedures. None of the UK division’s competitors has similar access to the leading operator in the world’s largest jewellery market.