By Invitation

Golden Rule III – New Product Introduction

Published

2 years ago

June 12, 2024

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L.R.Natarajan, Partner- Strategy and Systems Consulting

LRN has worked at senior level positions in companies like Eicher Motors, Hero Motors, Greaves Cotton, Ashok Leyland, and Hindustan motors. His last employer was Titan Company limited. Eleven years in Titan Company limited (eight years in Tanishq) and retired as CEO for the new business division. LRN was also heading the innovation council at Titan and was an active member of Tata Group Innovation Forum.

LRN had successfully spearheaded the TOC implementation in Tanishq retailing.LRN had started a school for Innovation in Titan and the school had produced over 400 trained innovators.

LRN also undertakes consulting assignments from corporate companies on Strategy, Retail excellence and Innovation. He has recently authored two books, a book on Innovation titled “The 9 Nuggets of Innovation” and a book on retailing titled “Demystifying Retail” – The Four golden rules.

Prabhakar Mahadevan, Founder Director of Strategy and Systems Consulting & Focus and Flow

Technologies Pvt Ltd

Prabhakar is a certified Theory of Constraints consultant (TOC) by Goldratt Schools Israel, certified expert on TOC by TOCICO (www.tocico.org) & is associated with TOC for the last 22+ years.

Through his consulting companies,Prabhakar and his colleagues are involved in several comprehensive TOC consulting projects across several industry verticals such as fashion jewellery, fast moving consumer goods, consumer durables, automotive OEM, capital machinery, pharmaceutical, heavy engineering, fashion retail etc.

In continuation of my article titled “The Four Golden Rules for securing retail excellence”, I am detailing through this article, the third Golden Rule: “Processes for New Product Introduction”.

1. Background

NPI, New Product introduction, is an essential part of any retailing. However, if the NPI is not guided by right processes, NPI process will turn out to be the key driver for accumulation of obsolescence. A wrong NPI process may give room for replacing the fast movers in accommodating new designs which do not have any sale history. Therefore, having the right NPI process will guide one through in which category, in which price point, how much of merchandise is to be introduced. With the right NPI processes in place, the obsolescence can be considerably minimised, and the fast movers can be increased.

2. New Product Introduction Process

There are four parts to the NPI process as defined below. Having the right processes for each aspect of NPI process, should lead to defining the comprehensive NPI process

1) What should be the frequency of NPI?

2) How much of Newness in each NPI?

3) The understanding of distribution of newness, across category and price points.

4) Zeroing down on the right set of designs, to maximise the chances of success.

2.1 What Should be the Frequency of NPI?

It is very important to arrive at the logical answer to this question. While newness is a prerequisite for any retail, it is to be understood that the new products come with Zero sale history. Also, one needs to vacate some of the merchandise from the current inventory mix to accommodate new products. The risk of obsolescence will be high with higher NPI. Conversely the excitement of NPI introduction and its impact on sale will be less with lesser NPI.

How does one arrive at the frequency of NPI?

It is to be understood that the NPI is be done to create excitement followed by desire in one’s customer base to walk in and buy and NPI is not being done to fulfil the Merchandising/ retail teams need. Having very clearly understood this, one should try and understand the customer buying behaviour. A customer buying Jewellery perhaps will frequent the Jewellery showroom (most of the customers) once or twice in a year.

From the customer walk-in data available, one should compute what % of customers are buying once/twice/thrice in a year and arrive at the average per customer repeat walk-ins in a year. Assume this number arrived at is 2 for a given retailer, meaning on an average, the customer walks in twice in a year. Therefore, when the customer walks in for the second time, there should be newness in the showroom.

With this one can conclude that the new products for this retailer, is to be done once in 6 months, and during the seasonal months

2.2 How much of Newness in each NPI?

Having decided that the NPI will happen every 6 months, the next logical question that needs to be addressed is how much of new products to be introduced in each NPI meet.

50% newness once in 6 months, results in the entire merchandise will be new in a year. And with 10% newness every 6 months, in a year 20% of merchandise will be new. Too much of newness, will lead to greater risk of obsolescence and too less newness, will not create the excitement in customer base.

The suggestion here is that key members from Product design / Marketing / Category / Merchandise and retail should understand the ramification of introducing newness and arrive at a consensus on the quantum of newness to be introduced in the NPI event. Based on the impact of introducing the newness based on consensus arrived at, the next year newness % can be fine-tuned.

Our recommendation will be to plan for a newness of 30% every year, 15% during Diwali/ Dhanteras and 15% during Akshaya Tritiya.

2.3 Understanding of distribution of newness across category/Price points

Referring to my earlier article on the second golden rule, Planogram and Replenishment process, I had explained about the 2*2 process. We had compiled the sale and stock turn of each showroom category/ sub-category/ price point wise, and compared the same with the group average sale and group stock turn and arrived at to which of the four quadrants the individual line item in a showroom belongs to, Q1, Q2, Q3 or Q4. I am compiling the 2*2 matrix for one’s ready reference, with certain additional notes.

As can be inferred from the above, for a given showroom, for the category / Sub- category/ price points falling under Q3 and Q4 are the areas where maximum of new products is to be introduced. Here again the quantum of new products will be governed by the newness % arrived at earlier.

To reap the full benefits of NPI, it is recommended that NPI should have more variants (70 to 80%) falling under Q3 and Q4, and less variants to be introduced for the line items falling under

2.4 Zeroing down on the right set of designs, to maximise the chances of success

Having arrived at showroom wise Category/ Sub- category/ Price point wise, number of new products to be introduced, (say 10 for a given line item)

For a category/ Sub- category/ Price point if 10 new designs are to be introduced
Secure 30 new designs (Three times the final requirement)
Let the category/design/retail team choose 20 best ones from the above, by appropriate voting process
Show case these 20 to your loyal customer base and have processes in place for short listing the best 10

Processes described above for NPI will for sure increase the chances of success at the marketplace. However, the caution here is that one needs to prepare a calendar of activities, covering all the processes described above, to ensure that one adheres to the deadline defined for NPI.

Summing up

While introducing new products is essential for any retail business, one should think through and arrive at the appropriate processes, for the four steps given below

What should be the frequency of NPI?
How much of Newness in each NPI?
The understanding of distribution of newness across category and price points.
Zeroing down on the right set of designs to maximise the chances of success

New product introduction, done without proper processes, will be the starting point of sludge stock generation in the inventory.

Related Topics:2024 byinvitation jbinsights

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By Invitation

From Prompt To Pendant: How AI Is Turning Jewellery Buyers Into Designers

By Dr Sandip P. Dhurat

Published

2 weeks ago

July 31, 2026

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Not long ago, jewellery design was largely a one-way conversation. Consumers browsed catalogues, visited stores, or selected pieces from showcases. If they wanted something custom-made, they relied on the jeweller’s sketches, imagination, and expertise.

Today, a new collaborator has entered the room: Artificial Intelligence.

Across age groups, consumers are experimenting with AI-powered image generators and design applications to create jewellery concepts that reflect their personal tastes. A few words typed into a prompt—”an emerald engagement ring inspired by lotus petals” or “a contemporary mangalsutra with geometric motifs”—can generate multiple design possibilities within seconds.

What happens next is perhaps the most interesting part of the story.Instead of ordering these pieces online, many consumers are taking their AI-generated designs to the one person they trust most: their family jeweller.

The new wave of customisation

For decades, customization in jewellery was often limited to engraving names, changing gemstones, or making minor design alterations. AI is expanding that possibility dramatically.

Consumers are no longer arriving at jewellery stores with vague ideas. They are walking in with detailed visual references generated on their smartphones. Some have experimented with dozens of versions before settling on a favourite. Others blend elements from different designs to create something entirely unique.

In a sense, AI is democratizing the design process. It allows consumers to participate creatively, even if they have no formal design background.

For younger buyers especially, this level of involvement is appealing. They want jewellery that feels personal, expressive, and different from what everyone else is wearing. AI gives them a playground where they can explore possibilities before making a purchase.

Role of traditional family jeweller

If AI can generate designs so easily, does that diminish the role of the jeweller?Quite the opposite.

While AI can create attractive images, it cannot determine whether a design is structurally sound, comfortable to wear, practical to manufacture, or durable enough for daily use. A ring that looks spectacular on a screen may be impossible to cast. A delicate bracelet generated by AI may not withstand regular wear.

This is where the expertise of the jeweller becomes invaluable.

Family jewellers are increasingly acting as interpreters between digital imagination and physical reality. They assess AI-generated concepts, refine proportions, suggest technical modifications, and ensure that the final piece balances aesthetics with craftsmanship.

Many jewellers describe the process as similar to working with a client-provided sketch—except the sketch is now more sophisticated and visually detailed.

The trust factor remains unchanged. Consumers may discover designs through AI, but they still want someone they know to guide the process and stand behind the finished product.

New collaboration trend

The relationship between customer and jeweller is evolving from buyer-and-seller to co-creators.

Consider a young couple designing an engagement ring. Instead of selecting from existing collections, they use AI to explore various combinations of settings, gemstones, and motifs. They then sit down with their jeweller to discuss feasibility, budget, stone availability, and craftsmanship.

The final piece is neither entirely AI-designed nor solely jeweller-designed. It is the outcome of a collaborative journey.

This shift creates opportunities for jewellers to engage customers more deeply. Conversations become richer because customers arrive with visual ideas rather than abstract descriptions.

In many cases, the design process becomes part of the emotional value of the jewellery itself.

The opportunity

The trend presents several advantages for jewellers willing to embrace it.

First, AI-generated concepts can serve as conversation starters. Instead of spending significant time understanding a customer’s vision from scratch, jewellers can begin with a visual reference and refine it together.

Second, it can increase demand for bespoke jewellery. Consumers who might never have considered custom design are discovering how accessible it has become.

Third, it opens the door to a new generation of buyers who value individuality over mass-produced designs.

Rather than competing with AI, jewellers can position themselves as the experts who transform digital concepts into heirloom-worthy creations.

Despite all the excitement around AI, jewellery remains an intensely human product.

A necklace gifted on a wedding day, a ring marking an engagement, or a bracelet passed down through generations carries emotions that no algorithm can replicate. AI may help generate ideas, but it cannot understand family traditions, cultural significance, sentimental stories, or the subtle nuances of personal taste.

Consumers are discovering designs through technology, but they are still seeking reassurance, expertise, and craftsmanship from people they trust.

Perhaps that is the real story behind this trend.

AI is not replacing the jeweller. It is empowering consumers to participate in the creative process while making the jeweller’s role even more valuable. The screen may provide the inspiration, but it is the skilled hand of the jeweller that transforms a digital concept into a treasured piece of jewellery.

In the years ahead, the most successful jewellers may not be those who resist AI, but those who embrace it as another tool in the ongoing art of personalization—where technology sparks the idea, and craftsmanship gives it life.