More on Supplier of Choice II

So the long-awaited "Supplier of Choice 2" was launched this week. Chaim Even-Zohar has some of the details here (and here's Charles Wyndham's ever-cynical take.)  As we mentioned last week, rather than spell out a new direction, it seems to be mostly a reaction to the considerable excesses of Supplier of Choice 1.  Clearly, it will be a more flexible policy than SoC1, and is very much a work in progress.

You can read the DTC press release here (DTC press releases and statements remain as obtuse and mysterious as they were in their cartel days.) It seems the DTC does seems to have two new Buzzwords of Choice (BoC): "excellence" and "partnership."

“Excellence,” which the DTC says it wants in its sightholders, is of course quite subjective. And shed of the heavy emphasis on legal compliance that governed SoC1, all indications are that the sightholder selection process is going to be a lot more subjective (and possibly even personality-based) from now on. While most sightholders were not particular fans of SoC1’s computer-based system, it was at least somewhat fair; many worry SoC2 will be less so.

"Partnership" is also interesting. Could the DTC be evolving into a quasi-franchise arrangement, as mentioned by Maurice Tempelsman in his GIA Symposium speech (MT being a pretty plugged-in kind of guy)? When "Supplier of Choice" was launched, the title seemed to indicate the DTC's desire to be a good partner to its customers. As we all know, it didn't work out that way — in fact, many would argue that it was just the opposite. This time around, they seem to be indicating things will be different. The first sight boxes of  the year were considered profitable, and that's a good start.

For all the much-needed reforms to SoC1, many sightholders were nervous after the presentation. DTC managing director Varda Shine mentioned that the company’s market share is down to 40%, and basic math (as well as the DTC’s newfound commitment to Southern Africa) dictates that many people on the list could be cut after the next “selection." Smaller and medium sightholders were particularly nervous, since it’s an article of faith that the big names are not going anywhere, and now smaller people may have less of a chance to make their case with the computer out of the picture. Some were also alarmed by a note in Nicky Oppenheimer’s speech that he has “thought about” tendering DTC goods — a position, incidentally, championed by Polished Prices, a web site that Oppenheimer mentioned he reads, though doesn't always agree with.

In addition, for all the backtracking in SOC2, the DTC is still talking about “adding value” (generally thought to mean marketing) and “efficiency” (thought to mean cutting out the middleman.) The DTC’s push for those two concepts may now be a lesser priority, but it is not going away.