WITH ALL THE UPS AND DOWNS of retail, store owners can sometimes feel isolated, sent into the ring of business alone to face the rigors and challenges of entrepreneurship. It’s difficult enough to run a business and sell enough to survive — dealing with stubborn or uncaring vendors is often more than an owner can take. But some manufacturers and suppliers are stepping into the ring with retailers, helping them battle the forces they must face in a variety of ways: from inventory solutions, to training, to value-added programs that can close the deal with customers. Often, as you will see, the same forward-thinking vendors lead the charge in a range of areas. Read on, and see how these service champions are lending retailers a hand when it’s least expected … and most appreciated.
1. ONLINE SUPPORT
In the fickle world of jewelry fashion, an item can be steaming hot one day and colder than a naked Eskimo the next. The name of the profit game is to consistently have items that sell in a reasonable amount of time… and to be able to efficiently liquidate those that don’t. It’s no surprise, then, that nearly 45% of surveyed jewelers said that a strong stock-balancing policy is the most useful service a manufacturer or supplier can offer (see sidebar, “Valued Services”).
Today’s buyer’s market is forcing more and more vendors to pony up and replace non-sellers with faster moving items. But this retailer-friendly policy is nothing new to Alex Nazarian of Los Angeles-based manufacturer and diamond supplier, AAA JEWELRY, which has been offering one-for-one stock balancing for the past twenty years. “No one likes to hear ‘All sales are final,’” says Nazarian. “If a retailer has one of our pieces in his showcase forever, chances are he’s not going to continue to buy from us. We want to make sure no one gets stuck with something that won’t sell.”
Michael Denney of MICHAEL DENNEY DESIGNS, a jewelry manufacturer based in Fresno, CA, also offers 100% trade-in value on his stock. “Chances are, if one jeweler can’t sell the item, I can find someone else who can,” says Denney. “It’s better for everyone if I can get the jeweler stock that turns.” He adds that ensuring his clients have faster-moving merchandise increases their profits and turnover, which in turn increases loyalty to Denney and his firm. “In an industry where everybody is out for themselves, it just makes a lot more sense, and feels a lot nicer, to offer a win-win situation,” says Denney.
“Not every piece is a winner for every jeweler,” says Ian Levine, president of jewelry manufacturer SPECTRUM DIAMONDS (Dallas, TX). He says that proven sellers and a fresh inventory are the key ingredients to any jeweler’s success, and urges more jewelers to take advantage of replacement and reorder programs. “We have one customer whose sales were up 40% in 2004,” says Levine. “He worked exclusively on overnight replacement, ordering up fast sellers every time he sold one.” Spectrum also offers stock balancing on its merchandise, with a ratio dependent on the size of a client’s order and their loyalty over the years. “If one of our clients becomes a believer, he’ll sell more, turn more, pay us more quickly, and think highly of us as a vendor,” says Levine.
Likewise, Rochester-based diamond supplier RDI DIAMONDS offers full credit on any of their diamonds … but with an added twist. Jewelers can offer this same credit to customers through RDI Diamonds’ exclusive “Triple Certification Program,” which provides a trade-up certificate for each diamond, containing a photographic image of the diamond and guaranteeing the full value of the stone for trade-up for life. Or, if the diamond doesn’t sell quickly enough, the jeweler can use the same guarantee to trade out for another diamond.
RDI also offers free overnight shipping, and will even ship on Saturdays for Monday delivery. “Many diamond dealers don’t have insurance for Saturday shipping, but being based in Rochester, it’s not as risky for us as it might be in a big city,” says RDI President & CEO Michael S. Indelicato. RDI also stays open for the three Saturdays in December, with extended hours. He adds, “You gotta be a schmuck not to deal with us.”
2. ADVERTISING AND MARKETING
Many manufacturers offer co-op advertising, with varying amounts of monetary incentives from the company. However, this advertising typically comes with a catch: you have to use the manufacturer’s “branded” campaigns, which tend to play up the manufacturer’s brand and allow the jeweler to include only their logo and contact information, almost as an afterthought. While there are benefits, many jewelers chafe at being required to spend a given amount on product to qualify for co-op dollars, or at being forced to buy the advertising medium that the manufacturer prefers.
A. JAFFE, a manufacturer of bridal jewelry, offers their clients what they crave most: flexibility. “We work with our customers to give them what they want, whereas many manufacturers won’t,” says Ashley Lewis, director of public relations. “We had one jeweler who wanted to run a magazine ad, but he didn’t have the budget. We funded the ad 100% and gave it to him, as an incentive for the following year. Every jeweler has different needs, and we’re glad to tailor our offerings to those needs.”
In addition to standard company-produced ad campaigns, A. Jaffe offers to customize their materials, especially in regards to customer catalogs, duratrans, websites, and even radio scripts. “We have a photographer on staff to shoot product, so our customers can advertise the hot sellers for their market. We’ll also provide copywriting as needed,” says Lewis. Financially, A. Jaffe backs its customers, including providing vinyl billboards fully produced, at a cost of $800-900 per billboard, within five to seven days.
Flexibility and choice are also hallmarks for manufacturing and distributing powerhouse STULLER (Lafayette, LA), which offers “turn-key” advertising materials, downloadable from their web site ([URL]www.stuller.com’ target=’_blank’ class=’textcolorlink’>www.stuller.com[/URL]). Stuller clients can download anything from fully produced ad slicks, to headlines, artwork and images that can be molded into a customized ad. Stuller also offers TV and radio spots, customer handouts, and materials designed by Diamond Promotion Service (DPS) and the World Gold Council. The quality of these materials typically cost far more than most independent jewelers could ever afford to invest. “DPS and World Gold Council create market momentum through their own efforts, and it just makes sense for the retail jeweler to ride those coattails,” says Harold Dupuy, the company’;s executive vice-president of marketing.
Outside of broadcast and print advertising, many retailers depend upon catalogs and direct mail flyers to bring in customers. While many manufacturers offer standard (but static) catalogs, New York-based GABRIEL & CO. not only gives its retailers a choice of multiple catalogs, but will also create completely custom catalogs at the retailer’s request. “We created several different versions of catalogs so that retailers in the same market area won’t be sending the same materials to their customers,” says advertising director Lina Frade. “Those catalogs are pre-printed and totally free to our clients. But if they want certain pieces included in the catalog, we will lay it out and design it for free as well — all our client pays are printing costs.” And to that end, Gabriel & Co. sends all its work to one printer, so the jeweler benefits from the bulk rate. The company began offering print media support about five years ago, and demand for these materials has snowballed ever since, says CEO Jack Gabriel.
“This type of catalog would typically cost a jeweler $1,000 per page for photography and layout,” says Gabriel. “For a 10-12 page catalog plus printing costs, you’d be looking at upwards of $20,000. So obviously, our clients value this service greatly.”
3. ONLINE SUPPORT
Although it’s been more than a decade since the Internet became “the next big thing”, jewelers and suppliers alike are still just beginning to tap its potential for improving vendor-client relations and retail customer service. Among the leaders in this area is Stuller, which showcases a huge inventory online and gives jewelers the ability to order with the click of a mouse. “They have the ability to put items in your basket and ‘checkout’ with a future check-out time for close of business in the afternoon. This way I can start an order and just enter the items I need as the day goes by. If I get busy, I don’t have to worry about sending in my order; it will automatically send at 5:00 p.m.,” says Jeff Tucker of Tucker Jewelers in Owensboro, KY. “Other suppliers need to step up and get web designers like Stuller has.”
Most suppliers, if they have their inventory online, have to upload it manually, and so typically have pieces online that are no longer available, or pieces in inventory that are not shown online. RDI Diamonds utilizes a software program that links their inventory logs with the company’s website, so that any piece sold is reflected on the site live, in real-time. RDI’s fully searchable database also features two to three pictures per diamond, so that prospective buyers can see not only the shape but also the inclusions. Addtionally, the software will match diamonds for the jeweler: all the jeweler has to do is enter the specificiations, and the website will show matching stones.
Finally, RDI has created the technology to link its full diamond inventory with its clients’ websites. “Our retailers’ customers can browse our inventory on our retailers’ web sites, and they won’t see a thing about RDI,” says Indelicato. “We even pre-program the markup as requested by each client.”
While some manufacturers are taking business-to-business service to a new level through online support, others are aiding their retail clients by marketing — but not selling — directly to consumers online. In July 2003, YEHUDA DIAMONDS launched a web-driven program that told consumers to enter in the specifications of the diamonds they wished to see. Yehuda would then drop-ship one or two diamonds to their nearest client retailer, notify the retailer of the shipment, and tell the customer to schedule an appointment with the retailer to see their diamonds. No credit card or purchase is required, and customers get to see the diamond in person before purchasing. Needless to say, the program has been a huge hit with retailers and customers alike.
“Over the holidays, we shipped a diamond to one of our clients in Georgia, and he sold it for $13,000,” says Dror Yehuda, CEO of Yehuda Diamonds. “That jeweler was also able to add-on a Rolex and other merchandise, so the end result was a $30,000 ticket — all because we brought the customer into his store to see our diamond.” Yehuda says that while some other diamond suppliers are trying to take the retail markup for themselves by selling direct, Yehuda’s goal is to defeat Internet e-tailers by putting customers back in his clients’ stores. “We get thousands of customers requesting diamonds every month, and the numbers are increasing,” says Yehuda, who adds that this year’s December web orders were five times higher than they were in 2003. “It’s getting harder and harder for jewelers to sell loose diamonds against Internet companies — and we’re here to protect our clients.”
Like Yehuda, Gabriel & Co. is developing a program to help retailers better market to customers via the Internet. Later this year, the company will launch a program to provide its clients with fully-developed, individualized websites. For clients who already have a website, Gabriel says his company will provide them with a “jewelry showcase.” And clients who don’t have websites or who want to upgrade theirs will be able to choose from three or four different templates — with an option to have a fully-customized site developed. “Competition is getting more fierce, and the only way for independents to survive is to distinguish themselves,” says Gabriel. “We want to provide them with a total solution to brand their store.”
4. IN-STORE MARKETING MATERIALS
Most retailers appreciate the minimized costs and maximized brand recognition that “branded” in-store marketing displays bring to their store. Many of these, such as A. Jaffe’s, include in-case signage and ring trays which are free with orders on selected items or groups of items. A. Jaffe offers three options (black, cherry wood, and blonde wood) to match different showcases, along with different sized trays to hold varying amounts of items. The luxé look of these trays distinguishes the brands of A. Jaffe and others, and helps to justify the added costs of branded lines.
While a unified look is certainly necessary for a strong presentation, Michael Denney is helping his clients go one step further by providing each store with a 17- or 42-inch plasma monitor (depending on the individual retailer’s level of commitment). The monitor the displays a “slide show”, featuring high-quality close-up photos of every piece in Denney’s inventory — which numbers over 5,000. Denney says that jewelers can customize the slide show, which runs off a laptop computer, to promote special events and pricing.
Whether you’re a sales superstar or the greenest newbie, it’s very hard to sell a product unless you truly understand it. While several suppliers have taken it upon themselves to offer free training to their clientele, one name stands above all others in this area: HEARTS ON FIRE. With eight full-time employees and a $2 million budget, Hearts on Fire runs the largest training company in the industry. “Training is an incremental activity that is instrumental in the formula of our brand,” says Hearts on Fire CEO Glenn Rothman. “The last 18 inches between the customer and the sales associate is where the transaction occurs. If we haven’t trained our brand ambassadors, the sales associates, about the value of Hearts on Fire, then we haven’t delivered a consistent presentation to their customer.”
The training begins the moment a jeweler takes on the Hearts on Fire line, as a company trainer will come out and spend a full day in the store, including time behind the counter. This initial session is reinforced through training videos, newsletters, and sales incentives. But perhaps the most famous example of the company’s commitment to training is Hearts on Fire University, which is held each year in Las Vegas and is attended by more than 700 people from ten different countries. The program is like a full-fledged conference, with one day for owners, and two additional days for jewelry store employees at all other levels. Past presenters at the events have included Joe Pine, author of The Experience Economy, as well as Shane Decker, Ken Gassman, Roger Blackwell, and Performance Plus, a troupe of performers who act out selling vignettes. Last year’s edition of Hearts on Fire University cost $1 million to run, and Rothman considers it “the best, most effective and efficient training in the industry.”
However, Hearts on Fire does not have a monopoly on strong training programs. Yehuda Diamonds sends well known jewelry sales trainer Brad Huisken to every new client. Huisken stays for a full day, conducting two seperate four-hour seminar to allow the store’s employees to rotate between working the floor and attending the seminar. “We already know the owner likes our product, but if the salespeople don’t like it, then it’s doomed to fail,” says Yehuda. The company also sends out a training CD for reinforcement, featuring nine different lessons on how to sell Yehuda diamonds.
Jewelry customers love to know their purchases are guaranteed, and retailers are no different. If they buy something, retailers want to know that if anything goes wrong, their manufacturer or supplier is going to stand behind their product. Jeff Unger of B&N JEWELRY understands this, which is why his company offers a lifetime guarantee on hand-engraved wedding bands. “The engraving will wear down, and the cost for us to re-engrave it is practically nothing,” says Unger. “But the good will it generates is huge.”
Yehuda Diamonds knows that, despite numerous laboratory tests that show otherwise, the permanence of the clarity-enhancement process for diamonds is still a point of doubt for some retailers and customers. Therefore, the company offers to re-treat any diamond that loses its enhancement (which, Yehuda says, will only happen under extreme heat, or exposure to boiling acids or bases). Several years ago, the company began producing business-card shaped CDs that play in any computer, and feature CEO Dror Yehuda giving his personal guarantee on the diamond treatment. The CDs also include the lifetime guarantee written on the outside label.
And for those jewelers who grumble about misgraded diamonds, Stuller launched its “Red Box” diamond program in 1998, which provides the grade and analysis of each diamond, engraved upon its girdle. Stuller guarantees to replace the diamond or refund the client’s money if it is ever graded differently in the future. The program also includes free insurance for one year and a rebate opportunity of up to 5%, depending upon how many diamonds are purchased by the client that year.
7. VALUE-ADDED PROGRAMS
In the end, retail success for jewelers is all about making the sale, and some vendors are helping to ensure this result with “value-added” materials that can help jewelers close the deal. With the success of their “Red Box” diamond program, Stuller recently launched its companion, the “Black Box” gemstone program. This includes a grading analysis report and brochure for retailers to give their customers to help them understand color grading and gemstones. “Color is such an unknown to consumers,” says Ramona Marshall, Stuller’s marketing manager for diamonds and gemstones. “We want to give our clients the tools to educate their customers, which in turn will lead to more sales down the road.” Once again, a serial number is engraved upon the girdle of each gemstone, providing an extra measure of security.
RDI Diamonds’ Triple Certification Program takes certified diamonds three steps further than the average vendor, offering not only the trade-up certification mentioned earlier in this article, but also a GIA or EGL certificate, as well as an RDI Diamond Report that provides an analysis of cut grades and reconfirms the characteristics represented in the GIA or EGL certificate. All of this is packaged in an attractive portfolio for jewelers to present their customers. “This program gives our clients all the tools they need to represent their diamonds with 100% confidence,” says Indelicato. “But equally important, it helps them to fight the big guys, as it allows them to give their customers so much more, in addition to the diamond itself, than the big corporations can offer.”
A similarly innovative, not to mention appealingly selfless, program comes from Michael Denney Designs: a custom leather folio designed to be given to the customer with each stock or custom piece they buy. On one side of the folio is an image of the item the customer has purchased, superimposed on a mood-enhancing stock photograph. (This could be flowers or a beautiful vista … but Denney is more than willing to customize this to cater to a customer’s needs — such as the baseball fan who wanted his jewelry image superimposed on a photo of a baseball player swinging a bat.) On the other side of the folio is a letter from the retailer, thanking the customer for their business. Nowhere in the folio is Michael Denney Designs mentioned … and that’s just the way Denney likes it. “I have no interest in branding me, I want to help my clients brand themselves,” says Denney, who also stamps each retailer’s name on the inside of every piece he ships.
That’s the kind of attitude that wins the hearts of retailers. And when it comes time to step into the ring of business, Denney — like the other vendors listed here and many others throughout the industry, are exactly who you want in your corner.
NO. OF VENDORS
Members of Instore’s Professional Retail Panel were asked to provide the closest possible estimate of the number of different manufacturers (including gemstones, diamonds and jewelry) they deal with. Responses:
10%: Less than 10
22%: 10 to 19
32%: 20 to 39
18%: 40 to 59
6%: 60 to 99
10%: 100 to 200
3%: More than 200
Total Responses: 134
Note: All percentages are rounded to the nearest full number, so total of all percentages may equal more than 100%.
Members of Instore’s Professional Retail Panel were asked: “How frequently do you re-order, on average? Responses:
32%: EVERY WEEK
11%: EVERY TWO WEEKS
33%: EVERY MONTH
19%: EVERY THREE MONTHS
5%: EVERY SIX MONTHS
LESS THAN 1%: EVERY YEAR
Total Responses: 168
Members of Instore’s Professional Retail Panel were asked: “Which of the following manufacturer services is most useful to your business?” Responses:
44%: STOCK BALANCING
24%: MEMO PROGRAM
15%: PRODUCT GUARANTEES
11%: FAST REPLACEMENT OF ITEMS
3%: PROMOTIONAL SUPPORT/STORE COLLATERAL
LESS THAN 1%: COOP ADVERTISING
0% MARKET RESEARCH
Total Responses: 171
Members of Instore’s Professional Retail Panel were asked: “What is your single biggest ‘pet peeve’ with suppliers?” Here are some representative “pet peeves”:
“Dropping in without notice. I know due to security reasons they like to be vague with their schedule but that shows no respect for mine.”
“Manufacturers trying to set my retail price for me and trying to put conditions on how I sell my product. Note I say ‘my product’ because once I pay for it, It is mine. Mine to discount, display with other merchandise and advertise the way I think is most beneficial for my store, and in turn for the manufacturer, too.”
“Any company with more than five or six people employed ought to be able to keep their business going year round. It seems every time I turn around I have to explain to a customer why I can’t help them bacause a vendor is on summer vacation or taking two weeks for Christmas and closed down. It makes us look like idiots and we don’t appreciate it!”
“The ones who don’t know me and call repeatedly, don’t know my name and slaughter it, and those who call at the end of the day or during lunch hours (busiest times).”
DON’T KNOW WHAT’S HOT
“Many manufactures and suppliers really don’t know what of their product sells. They can tell you what the jewelers are buying, but have no idea what the consumers are buying. The key is in the reorder!!
OUT OF STOCK ITEMS.
The on-line ordering system that tells me an item is in stock—when it isn’t, and I find out after delivery. It’s forced me to start calling in all my orders just to avoid this problem.
Members of Instore’s Professional Retail Panel were asked to share their tales of “service heroism.” Here’s some stories:
“In July we had a break in. A lot of things were stolen. I posted on IJO’s Indy Channel what had happened. We had many calls from our IJO vendors. We had just received a large order of wedding bands from OSTBYE AND ANDERSON the week before. They were all stolen. That Saturday morning we received our same order and more from Ostbye with ring displays and all. Now that’s part of being in the IJO family.” — Al Bitman, Park Jewelers; Clearwater, FL
“ALEXANDER PRIMAK was wonderful during the holidays. He kept his diamond stud earrings coming in as fast as we sold them. He also made and send a mounting that had to be here and delivered on the 24th … and did it in two days!” — Michael Nedler, Sonny’s on Fillmore; Denver, CO
“The Freehold Township Little League Senior Leaguers won the World Championship this year. The Township Committee of Freehold Township wanted to present the team with customized watches (custom dials with logo) made by BELAIR WATCH company. Everything happened somewhat last minute, and the odds of having the watches in time to be presented along with plaques and signs, etc at the Township Meeting was very slim. Somehow, Belair managed to get the job done on the day of the awards presentation, and we picked the watches up right at the factory. The kids were thrilled, with lots of very proud crying parents. They really came through big for us.” — David Salkin, The Jewel Case; Freehold, NJ
“Definitely HEARTS ON FIRE. They came up with a new piece that sold out quickly at Christmas. As a new product, no one knew what to expect so orders were cautious as well as manufacturing. Instead of saying, ‘Sorry, we’re out’, they went the extra mile and pushed their manufacturer to make additional pieces. They did this all in the third week of December, over the weekend, starting with a call to our rep’s home at night! This is in addition to shipping us items from other stores in a heartbeat and opening late and additional days to ensure all retailers had everything we needed for the holidays.” — Gary Hill, Leo Hamel & Co. Fine Jewelry; San Diego CA
“At the beginning of December, one of my customers ordered a matching wedding band for his wife for Christmas. I ordered it from CAMELOT BRIDAL and put the special order card in the file. Three days before Christmas, I was going over our special orders and realized the ring had not arrived. I called Camelot to inquire about the special order and was informed that since I had not specified the ring was for Christmas, they had not intended to send me the ring until the 7th of January. I had assumed it was understood I needed it before Christmas (my father always told me what assuming does for you). This was not acceptable. I did not intend to disappoint a good customer (or his wife). The person on the phone said they’d see what they could do but the ring was not in stock. When I got off of the phone, I called my sales representative, Ralph Timmerman, and told him what happened. He told me he would look into it and call me back. A short time later Ralph called me and told me, ‘Everything is taken care of, baby!’. He informed me the ring was in production, would be polished and sent to me overnight. On December 23, the customer and I were standing on the showroom floor talking when the UPS package arrived with his ring. I went to the back and wrapped it and stuffed it in his pocket so his wife would not see it and we settled up later. Ralph Timmerman and Camelot Bridal came through for me and my customer.” — Chris Snowden, Snowden’s Jewelers; Wilmington, NC