Written by Trace Shelton Wednesday, 24 June 2009 14:00
I put together my Editor's Note for INDESIGN's July/August issue today. In it, I discuss the two recent shifts in the jewelry world that I feel are most pressing that retailers address. 300 words really isn't enough space to do these topics justice, but I hope it's enough to make people re-think their current approaches. I look forward to your comments; here's my column:
Two major shifts are occurring in our industry that retailers need to come to grips with:
1) Today's consumers want jewelry that holds personal meaning. Secondarily, they often want that jewelry to be "unique" (that is, they don't want to see the same piece on all their girlfriends). This is a major change from previous decades in which most consumers wanted a relatively traditional look (just bigger and brighter) or branded jewelry matching that of others in their circle, essentially stating "we belong."
2) The system of acquiring and paying for jewelry between retailers and manufacturers is broken. It all stems from that "four-letter word": memo. The bankruptcies of some of our most prominent retailers and designers tell us that something is seriously wrong here. Manufacturers and retailers alike are in over their heads, and when the bough breaks, everyone falls.
What are the answers? To the first point, the solution is easy: shift your inventory philosophy into carrying more jewelry with meaning (especially if it's affordable - say, in the $100 - $1,500 range, depending on your market).
The second problem isn't so easy to answer, but several options are presenting themselves: the "brass and glass" (or "just in time") bridal system made famous by Spence Diamonds, the virtual designer showroom provided by Paragon Lake, or the lightning-fast custom capabilities of CAD. All of these require far less cash outlay than the old way of merchandising a store with complete (and expensive) pieces of jewelry.
Another option is simply to buy smarter - don't pick up a line that may not sell just because you can pay for it later. Do yourself and the designer a favor, and wait until the time is right for that line before you commit to selling it, and then pay for it up front (or in a mutually acceptable series of payments). Designers, by the same token, should be willing to stock balance when pieces aren't selling.
It's time to take a hard, fresh look at the way you're doing business. Don't wait until tomorrow.
Comments (12)
written by Deb Besemer, June 26, 2009
You are so right. Girlfriends love to tell girlfriends the story behind a piece of jewelry..."I got this on vacation in New Orleans", "My husband gave this to me in the hospital when Johnny was born. It's his birthstone.", etc. No woman wants to think that someone else has that same piece. We don't put store bought cards in our memory box but we do display the clay pot made in kindergarten for decades.
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written by Joel McFadden, June 26, 2009
Trace you are right on both counts!
The next 2 years will show us exactly what effect this will have on the average store. Mfg and wholesalers are in big trouble, some will adapt others wont. The big change I see here is that technology has made it possible for a small store to compete with offshore manufacturing. Eliminate shipping costs and middlemen and I can compete with the big boys for price and I offer personalization and fast turn around. (Just designed and delivered a custom plat ring in 10 days.)In light of that how can the big brands survive. Who is going to pay for mass produced goods when custom is almost the same price????
The next 2 years will show us exactly what effect this will have on the average store. Mfg and wholesalers are in big trouble, some will adapt others wont. The big change I see here is that technology has made it possible for a small store to compete with offshore manufacturing. Eliminate shipping costs and middlemen and I can compete with the big boys for price and I offer personalization and fast turn around. (Just designed and delivered a custom plat ring in 10 days.)In light of that how can the big brands survive. Who is going to pay for mass produced goods when custom is almost the same price????
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written by Cliff Yankovich, June 26, 2009
I HOPE you are right Trace, (and I do believe you are), because my little mom and pop is positioned to keep on rockin'. After spending time in the wholesale end of the business and seeing too many small stores get in over their heads we did our best to avoid that when we opened 7 years ago. The bulk of our business, admittedly small (300k in 200
, is jewelry my wife makes. We can make a unique silver mom's ring in 1 day or even same day when we have to! We also have the 2D GemVision system and work with a local guy who has 3D and a lathe. He does the casting for us too, so we can produce a custom design from CAD to finger in 7 to 14 days.
Michigan is always behind the curve, but more and more folks around here are searching out the independents after looking at 4 stores in the mall who all sell the same stuff. And I am beginning to almost believe they are seeing through the 50% crapola.
I appreciate the "brass-n-glass" - ever since I bought the Stuller wedding ring tray for a couple hundred bucks we are selling a lot more wedding bands.
I figure if we can make it through the next 6-12 months, then we will be in great shape.
, is jewelry my wife makes. We can make a unique silver mom's ring in 1 day or even same day when we have to! We also have the 2D GemVision system and work with a local guy who has 3D and a lathe. He does the casting for us too, so we can produce a custom design from CAD to finger in 7 to 14 days. Michigan is always behind the curve, but more and more folks around here are searching out the independents after looking at 4 stores in the mall who all sell the same stuff. And I am beginning to almost believe they are seeing through the 50% crapola.
I appreciate the "brass-n-glass" - ever since I bought the Stuller wedding ring tray for a couple hundred bucks we are selling a lot more wedding bands.
I figure if we can make it through the next 6-12 months, then we will be in great shape.
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written by Beth Bernstein, June 27, 2009
Trace,
I agree that women wan pieces that are more personalized and unique, that the status of belonging is more about being different in choices. And I do believe that on the designer level, there are all types of individualized pieces, from sentimental to those with meaning to one of a kind with rare stones or combinations of stones/materials. Retailers I've spoke to are also doing much more customized pieces. If retailers can show more styles (from the designers and manufacturers they sell as well as pieces they make themselve) at a price point that is a self purchase or impulse buy might not be the answer to all of the industry's problems but it could be a way to boost sales. I think the memo/consignment model as well as not sticking to terms has damaged many of our brightest design talents and have been instrumental in the recent chapter 11s. I do agree in buying smarter, tighter and agreeing upon terms that both partners can live with. I also think that designers should be more cautious in the terms they are willing to accept at this point. I also agree with Andy, that training and educating the sales staff is so important to selling what you do have in your stores. I personally believe that you have to touch, try and and get the feel of jewelry so not quite sure about the reality of virtual showrooms and "just in time" as a concept for stores across the board. I think that, if we can keep on discussing these various topics in our industry and hearing and listening to various points of views t we will be closer to getting a handle on what we can all do to help our industry make these shifts into the future
I agree that women wan pieces that are more personalized and unique, that the status of belonging is more about being different in choices. And I do believe that on the designer level, there are all types of individualized pieces, from sentimental to those with meaning to one of a kind with rare stones or combinations of stones/materials. Retailers I've spoke to are also doing much more customized pieces. If retailers can show more styles (from the designers and manufacturers they sell as well as pieces they make themselve) at a price point that is a self purchase or impulse buy might not be the answer to all of the industry's problems but it could be a way to boost sales. I think the memo/consignment model as well as not sticking to terms has damaged many of our brightest design talents and have been instrumental in the recent chapter 11s. I do agree in buying smarter, tighter and agreeing upon terms that both partners can live with. I also think that designers should be more cautious in the terms they are willing to accept at this point. I also agree with Andy, that training and educating the sales staff is so important to selling what you do have in your stores. I personally believe that you have to touch, try and and get the feel of jewelry so not quite sure about the reality of virtual showrooms and "just in time" as a concept for stores across the board. I think that, if we can keep on discussing these various topics in our industry and hearing and listening to various points of views t we will be closer to getting a handle on what we can all do to help our industry make these shifts into the future
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written by Trace, June 29, 2009
Beth, it sounds like we agree on most of this. I understand your point about seeing and trying on the real thing -- I think that's the argument that most jewelers across the country have made since the advent of e-commerce. However, you can't argue with results, as the Internet continues to gouge huge inroads out of the retail jewelry pie.
Please understand that I'm talking primarily about bridal in reference to the "brass and glass" model. For young consumers especially, that threshold barrier is immense. And, what do they know about "the real thing" when it comes to jewelry? Not much at that point. The convenience, selection and low-pressure tactics that Spence uses to sell engagement rings seems like the perfect combination for capturing a nice chunk of the engagement market wherever they go (which, by the way, is probably why they're expanding when everyone else is scrambling to make ends meet).
To the other points, many jewelers out there (like Cliff and Joel) are proving the viability of virtual designs through CAD, and Paragon Lake is just the latest iteration of the virtual selection option. People have *never* been able to see their own custom designs in real-life until they were actually constructed. Before, they had to see them as a drawing on two-dimensional paper. Now, they can view it rendered in 3-D on a computer screen.
As you and Andy have pointed out, there are many ways that jewelers can improve their results, including the tried-and-true methods of buying smarter and selling better. My point is, why ignore some of these other trends -- and innovations -- when you may be able to improve by changing your methodologies in several different areas of your business?
Please understand that I'm talking primarily about bridal in reference to the "brass and glass" model. For young consumers especially, that threshold barrier is immense. And, what do they know about "the real thing" when it comes to jewelry? Not much at that point. The convenience, selection and low-pressure tactics that Spence uses to sell engagement rings seems like the perfect combination for capturing a nice chunk of the engagement market wherever they go (which, by the way, is probably why they're expanding when everyone else is scrambling to make ends meet).
To the other points, many jewelers out there (like Cliff and Joel) are proving the viability of virtual designs through CAD, and Paragon Lake is just the latest iteration of the virtual selection option. People have *never* been able to see their own custom designs in real-life until they were actually constructed. Before, they had to see them as a drawing on two-dimensional paper. Now, they can view it rendered in 3-D on a computer screen.
As you and Andy have pointed out, there are many ways that jewelers can improve their results, including the tried-and-true methods of buying smarter and selling better. My point is, why ignore some of these other trends -- and innovations -- when you may be able to improve by changing your methodologies in several different areas of your business?
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written by davidatinstore, June 29, 2009
Interesting discussion, guys.
I wonder how top designers feel about this issue. Can the experience they provide be approximated in base metal and non-precious gemstones (okay, "brass and glass")? In terms of the experience, it seems that of course you would lose in exclusivity and the sense of value. But you might be able to make up for it with additional approachability and perhaps personalization. If somebody could interact with your inventory -- play with it, put a ring on every single finger -- without a salesperson hovering over them, that might be a good thing, right?
Anyway, just a thought. I'd love to see someone try it.
At the same time as we're discussing potential rising models, there are some designers out there who don't feel the system is broken. After the Henry Dunay bankruptcy, an interesting discussion started on Cindy Edelstein's Facebook page, with many people decrying the state to which memo had brought the industry. Then designer Paul Klecka piped up, saying he's happy to supply goods on memo -- basically saying, "Just give me my six feet of display case and I'm happy." He accepts memo as a cost of doing business.
Anyay, again ... interesting discussion. I think we should make a lead out of it! Let's solve this one for the whole jewelry business ... ;-)
I wonder how top designers feel about this issue. Can the experience they provide be approximated in base metal and non-precious gemstones (okay, "brass and glass")? In terms of the experience, it seems that of course you would lose in exclusivity and the sense of value. But you might be able to make up for it with additional approachability and perhaps personalization. If somebody could interact with your inventory -- play with it, put a ring on every single finger -- without a salesperson hovering over them, that might be a good thing, right?
Anyway, just a thought. I'd love to see someone try it.
At the same time as we're discussing potential rising models, there are some designers out there who don't feel the system is broken. After the Henry Dunay bankruptcy, an interesting discussion started on Cindy Edelstein's Facebook page, with many people decrying the state to which memo had brought the industry. Then designer Paul Klecka piped up, saying he's happy to supply goods on memo -- basically saying, "Just give me my six feet of display case and I'm happy." He accepts memo as a cost of doing business.
Anyay, again ... interesting discussion. I think we should make a lead out of it! Let's solve this one for the whole jewelry business ... ;-)
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written by Christina Sachse, July 04, 2009
At Sonja Picard Collection all of our pieces have meaning, I would securely say that 90% of our customers purchase Sonja's pieces specifically for the meaning they are able to attach to them. It is a beautiful experience to sell to these people, to watch them walk away with a piece they cherish in a profound manner (in that $100 - $1500 range that Trace mentioned above). That said, the economy shift is such that it remains very difficult to sell couture jewelry with or without an added personal meaning. I appreciate your comments, hard times do call for drastic change for many.
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written by Trace, July 04, 2009
I hear you, Christina. At this point, all most can do is try to become more competitive and relevant to customers -- the economy makes it difficult to really thrive, no matter what changes you make. But as you alluded to, would most store owners really consider drastic changes if they weren't feeling the pain of tough times? Now's the perfect time for stores to better position themselves for when the economy does bounce back.
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written by Gary Gordon, July 05, 2009
I remember the slump of the early '80's; our area suffered thru our own "recession" because the price of oil dropped so quickly and so severely.
Everyone, in every business here, faced challenges unlike we had ever seen before!
Not unlike the times we are in right now. Last Fall, when the recession was "formally" proclaimed, our firm (Samuel Gordon Jewelers in Oklahoma City) adapted the following rules/business model:
1) We knew the customers would pull back, and whatever they bought, they probably would want basic, conservative (compared to before) styles that they felt they could buy and wear without "criticism"; they could not take the chance of being branded as "conspicuous consumers" anymore(Trace, this coincides with your item #1).
2) NO BUYING OF NEW MERCHANDISE. Period. We decided to live out of current inventory, to the greatest extent possible.
3) Cut expenses, where possible, but the goal was to NOT cut our people. THEY were, and ARE, are greatest asset.
4) PAY our vendors as FAST as possible, when we owed for a MEMO/special order item. THAT'S THE LEAST WE COULD DO FOR THEM. We knew we had to take care of ourselves, BUT, we knew this ride would be especially hard on THEM (the vendors), because if OUR sales were to lessen, and we therefore were to stop buying, THE VENDORS would have bigger challenges than even WE would, (THIS turned out, sadly, to be accurate, by the way!)
5) Manage CASH. When profits are down, AND, IF you can live out of existing inventory (and receivables, AND, possibly a little bit from savings[!])AS YOU REDUCE YOUR INVENTORY, your DEBT will lesson, and THIS DYNAMIC (the combination of your sales, profits, and reducing debt thru reducing purchases) will save you, cash-wise!
There you have it. Not rocket science. Not easy. BUT, do-able, IF you stay focused, determined, AND, have a little bit of LUCK.
Kindest regards, Gary.........
Everyone, in every business here, faced challenges unlike we had ever seen before!
Not unlike the times we are in right now. Last Fall, when the recession was "formally" proclaimed, our firm (Samuel Gordon Jewelers in Oklahoma City) adapted the following rules/business model:
1) We knew the customers would pull back, and whatever they bought, they probably would want basic, conservative (compared to before) styles that they felt they could buy and wear without "criticism"; they could not take the chance of being branded as "conspicuous consumers" anymore(Trace, this coincides with your item #1).
2) NO BUYING OF NEW MERCHANDISE. Period. We decided to live out of current inventory, to the greatest extent possible.
3) Cut expenses, where possible, but the goal was to NOT cut our people. THEY were, and ARE, are greatest asset.
4) PAY our vendors as FAST as possible, when we owed for a MEMO/special order item. THAT'S THE LEAST WE COULD DO FOR THEM. We knew we had to take care of ourselves, BUT, we knew this ride would be especially hard on THEM (the vendors), because if OUR sales were to lessen, and we therefore were to stop buying, THE VENDORS would have bigger challenges than even WE would, (THIS turned out, sadly, to be accurate, by the way!)
5) Manage CASH. When profits are down, AND, IF you can live out of existing inventory (and receivables, AND, possibly a little bit from savings[!])AS YOU REDUCE YOUR INVENTORY, your DEBT will lesson, and THIS DYNAMIC (the combination of your sales, profits, and reducing debt thru reducing purchases) will save you, cash-wise!
There you have it. Not rocket science. Not easy. BUT, do-able, IF you stay focused, determined, AND, have a little bit of LUCK.
Kindest regards, Gary.........
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written by davidatinstore, July 06, 2009
Very wise advice, Gary. Thanks for sharing!
Are you still following those five rules? If so, how much longer do you think you'll be following them for? What's the signal to stop?
Are you still following those five rules? If so, how much longer do you think you'll be following them for? What's the signal to stop?
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written by armsusa, July 06, 2009
I think it's worth mentioning that in order to buy smarter, you need to understand your inventory to have total control of your stock and ultimately your business. Having a hunch that you know your inventory (the winners, the losers etc...) means little. Getting inventory reports, tracking data and implementing strategies (based on facts) will have a huge (positive) impact on your bottom line.
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This comment can't do it justice either. I guess it's a thought and nothing more. Still...WE have great influence over the marketplace because WE are a part of it.