Rare Pink is an online retailer of custom designed diamond jewellery and engagement rings, trading from London and Hong Kong. Average order values are £3,000.
We focus on the custom designed jewellery experience. Our customers receive a one-of-a-kind piece of jewellery which they have co-created. Demand for jewellery online and product customisation in general is growing rapidly.
On RarePink.com you can, within seconds start creating a bespoke piece of jewellery which is completely unique to celebrate a specific moment or signify a unique commitment and love.
Our vision is to create a platform where our customers can work with world-class designers to create beautiful, one-of-a-kind pieces. With our developed supply chain and industry experience, we are able to deliver jewellery at a much lower cost than in high street stores.
We aim to bring custom engagement rings and bespoke jewellery to a large part of the market that may have previously believed this product to be beyond their financial means or currently do not know how or where to create it.
Substantial accomplishments to date
We closed 28 sales since February 2013 - 13 before the site launch and 15 since launching in October. Average order values are £3,000.
We have built a strong team with excellent industry specific skills in Retail, E-Commerce and Manufacturing - consisting of 6 people spread across our two offices located in London and Hong Kong.
Our London team manages sales, marketing, web development and jewellery manufacturing.
In 2013 we opened an office in Hong Kong, one of the world’s largest diamond centres. This strategic location has allowed us to build relations with over 50 of the world’s largest diamonds suppliers and have real-time access to over 100,000 diamonds.
We also work with a number of teams abroad as well as freelancers who are outsourced for web design, web development, content creation and other marketing activities.
Through investment into Counter Sketch (a specialised software package) we have over 500 customisable jewellery designs, a selection of which make up the range available on the Rare Pink website.
We pride ourselves in our high quality British craftsmanship. Our links with casters, polishers, goldsmiths and setters, allow us to manufacture our jewellery in London, while our diamonds are cost-effectively sourced from Hong Kong.
We have several products and revenue streams:
1. Custom Jewellery - Higher margins and typically higher average order values (AOV) require communication and time committed from our sales, design and support team.
2. Collection items of jewellery - require very little interaction.
Our margins for jewellery online (Points 1 and 2 above) range from 100% mark-up for standard lower value items (£500-£1,000) to 20% for our higher value items (£5,000+).
We use a wide variety of different marketing channels to reach our customers including, Pay-per-click (AdWords and Facebook), affiliate marketing, content creation and distribution, social media, word-of-mouth, e-mail campaigns and several others.
The emotional experience of creating an engagement ring is what we love and emphasise, providing a memorable experience for our customers who love to be highly involved in the creation of their jewellery. Because of their experience co-designing their ring, our bespoke customers have become brand ambassadors, bringing more clients and more traction to our vision of affordable jewellery customisation.
Use of proceeds
The use of the funds which will allow us to:
- Begin an in-house manufacturing operation in Hong Kong. As we already have a presence there, this is about hiring the right people and leasing the equipment needed. We will only commit to this goal once a certain number of monthly sales are reached.
- Some funds will be needed for working capital to purchase precious metals and other materials needed during the manufacturing process.
- Invest more into our marketing budget by expanding our monthly pay-per-click (PPC) spend and implementing press, affiliate, SEO and other marketing strategies.
- Grow our sales and marketing teams by hiring the best marketing and ecommerce specialists from around the world and using outsourced sales agents to validate leads before our London team begins to work with them on their bespoke design.
We focus on 3 different customer segments, outlined in detail below:
1. The customer is looking for an engagement ring, not specifically in search of a custom-made one.
This customer is typically a young man in his 20s to mid 30s, contemplating marriage. Having grown up with the internet, he starts his engagement ring search online.
We meet this type of customer through our paid for and organic search results and provide him with the opportunity to create an engagement ring that is personal, has a story, is completely unique and is one that is inspired by the tastes and identity of his fiancée. He pays no more than other online retailers (far less than high street jewellers) while getting a custom designed piece.
2. The customer is actively searching for a custom designed engagement ring or piece of jewellery.
These customers usually know they are looking for a custom jeweller. By offering an obligation free design (not just a free quote), we build rapport with these customers over a period of time, before asking them to commit to purchasing. This differentiates us from our competitors as many have no contact with their customers, having only a touch-less ecommerce offering. Our rule is to only design pieces we are proud of so with that in mind, any designs we create that do not convert into a sale are added to our collection range of engagement rings which can be purchased from our site.
3. Customers who want a ring or piece of jewellery but do not want to go down the custom approach. They want a good price, convenience, speed and great service.
We cater for these customers too. Instead of a full custom-made experience, we offer a complete collection of jewellery and rings that are already designed and in fashion, but still fully customisable. These options meet the customer’s requirements and price point, while still having a unique element.
Characteristics of target market
In total, the global value of the diamond jewellery retail market was £43bn ($71bn) in 2011 having grown by 18% from the previous year.
America commands the highest market share of diamond jewellery sales (around 38% as of 2011, compared with 13% for China and 12% for India), whilst in comparison, the annual growth of the US market (7%) is much smaller than its Asian counterparts (18% and 17% respectively).
Our focus will begin on the UK and US markets but we plan to quickly expand into the booming Asian markets. Our office in Hong Kong is the ideal platform for this.
“Online” jewellery sales have grown from almost no share of the market in the 2000’s to 6% in 2011. We believe this to be closer to 10% as of 2013 based on the growth data of our competitors. The market share of online sales is expected to grow even faster in the years to come as the industry replicates the brick and mortar to e-commerce transformations so many other industries have seen in the past 10 years.
Our main promotional activities are:
1. Search advertising and positioning
2. Social media and discovery through great content
3. Mail, press and other on- and off-line channels including affiliate marketing.
Below are some more details into our current and future use of each one:
- Pay per click advertising - investment in this type will be very high at first but likely to decrease in terms of its proportion of total marketing spend as we do better at more natural and organic types of marketing.
- Search engine optimisation - we will begin investment into this only in March this year.
SOCIAL & DISCOVERY
- We plan to spend an increasing amount on content creation that can be spread through our various social channels.
- We will also use Facebook, Twitter and LinkedIn to be able to focus our marketing on specific demographics using their "sniper" approach to targeting.
All visitors to the Rare Pink website who achieve certain goals (such as time spent, or visiting specific product pages) will be re-marketed. This means they will see our adverts following them around the web encouraging them to come back and complete their order with a promotional code as an incentive.
This is an important part of our marketing. We estimate that a typical customer journey may involve between 5 to 15 visits to our site, so these re-marketing campaigns on both Facebook and Google are essential.
MAIL, PRESS & OTHER
We have a range of other marketing and promotion activities scheduled for the next 12 months.
1. Give-aways as an incentive to growing our email database. Our current diamond studs competition finished in December and created a new mailing database for our site of 700 emails of people in our target market.
2. Press releases, and more media coverage.
3. Affiliate marketing
4. Groupon and other group buying platforms
5. Q&A site direct lead engagement.
The engagement and non-engagement jewellery retail market is intensely competitive and highly fragmented. Our primary competition comes from online and offline retailers that offer products within the higher quality segment of the jewellery market.
Current and potential competitors include the following:
1. Online retailers that sell jewellery and online jewellery retailers (Blue Nile, James Allen)
2. Independent jewellery stores (Hatton Garden)
3. Retail jewellery store chains (Cartier, Tiffany & Co)
4. Department stores, chain stores and mass retailers (Walmart, Debenhams)
5. Online auction sites (eBay, Amazon)
6. Catalogue and television shopping retailers (QVC)
7. Discount superstores and wholesale clubs, and Internet shopping clubs.
While the internet has transformed retail in almost every product category sold, to date, only a small percentage of diamond jewellery is purchased online. Research shows that online is the fastest growing segment and companies like Rare Pink and our online competitors will only continue to increase the pressure on our off-line competitors who can not compete with us on price.
Many of the offerings of our competitors are too similar for any one company to differentiate itself, even among the leaders, who are also struggling to build a strong brand identity. Our custom jewellery offering, at affordable and competitive price, positions us in a fast growing space with few competitors.
The challenge we will face is not for us to establish this competitive edge or validate our market; as we believe we have already proven a very strong customer interest in our bespoke offering. The challenge is to scale this offering so that many people can take advantage of it all around the world.