Contract design and supply chain management in the luxury jewellery industry

Abstract

PurposeThe purpose of this paper is to identify the role of contract design in overcoming critical demand management (DM) issues in the luxury jewellery industry. The goals are the identification of the main critical issues of the DM process and the analysis of the contribution of contract re‐design to solve them.Design/methodology/approachThe paper follows an exploratory approach using a case‐based methodology. Data are collected through a sample composed of four brand‐owning companies and 37 multi‐brand retailers in the luxury jewellery industry.FindingsThe paper offers insights into contract design in the luxury jewellery industry. In particular, the critical issues of the DM process determined by inadequate contract design are identified, thus highlighting their influence on the critical success factors of luxury companies. In addition to the characteristics the contract should have to overcome the critical issues have been proposed.Research limitations/implicationsThe research provides initial insights into the important role of contract management in jewellery luxury companies. To date, the analysis is predominantly qualitative and not sufficiently statistically significant to generalise the results.Practical implicationsThis paper raises a number of important issues for jewellery brand owners who are reluctant to consider the retailer's perspective in a collaborative way during the DM process.Originality/valueThis paper is one of the first attempts to study contract design specifically applied to jewellery luxury companies, with a main focus on the DM process.