INDEPENDENT JEWELERS RANKED the slowing economy as the most serious challenge they face as 2022 moves towards the crucial end-of-year holiday season.
Inflation, which hit a 41-year high in June, was ranked No. 2, followed by rising interest rates and falling consumer confidence, and, at No. 5, a threat not normally associated with a decelerating economy – staff shortages.
To be sure, when we asked jewelers as part of the 2022 INSTORE Big Survey to quantify their concerns, the ratings weren’t off the charts: Both “slowing economy” and “inflation” were judged just shy of 7 out of 10 in terms of how worrying they were (jewelers were almost as worried about “The country losing the script politically”). Moreover, almost half of the respondents said they still expect to post sales growth this year, suggesting that despite all the economic uncertainty at present, 2022 may yet go down as a decent year for America’s independent jewelers.
Still, the pressure on their business has been enough to cause many of them to respond, often imaginatively, to mitigate the threats to their business. Among the actions they have taken were:
To deal with the slowing economy:
- “We reduced inventory, paid down all debt and order as needed. We’ve also redesigned old inventory into current styling.”
- “We specialize in repurposing jewelry; something that is a family heirloom and now updated. They always seem to find the money for this process. Understanding the time and process, they are more willing to spend money rather than just purchase an item out of the case.”
- “Aggressively move older inventory and be more liberal with accepting items in trade.”
- “We hosted a closeout event in September where vendors gave us nearly $1 million of memo goods to sell at a discount of up to 50% off. This gave the consumer a huge value without costing us much overhead.”
- “We’re reaching out to the younger bridal market with TikTok.”
- “Removed the low end and only now sell fine jewelry. No watches, either.”
- “Incorporating photos and videos of our staff on our social media platforms to generate a more personal experience for current and prospective customers.”
- “Instead of selling, I’m promoting buying, lending, consignment options. Targeting my VIP clients. My messaging is now something to the extent of, this is a buying opportunity, prices have come down on luxury brand name watches, or I just received these items from individuals looking to sell, this is your chance to buy low! Everyone wants a ‘deal’.”
To deal with inflation:
- “Due to crazy rising expenses (35%), I’ve raised my repair rates (60%) and am pricing higher with 240% markups. Nobody blinked, and my profits are way up.”
- “Started doing some of our own manufacturing to maintain our competitive pricing.”
- “Lab-created diamonds have been the bright spot as natural diamond prices become unaffordable to the first-time buyer, giving them an option to own a diamond at a reasonable price that will give them the same joy, the same look and desire as a natural diamond.”
To deal with staff issues:
- “I have been letting staff stay clocked in for lunch, more flexible hours, bring pets to work, got them massages/facials, and gave them inflation money (gift cards for needed things like gas/food/etc.).”
- “Sales goals now include a paid Saturday off. Staff loves it.”
- “Offered a referral bonus to our employees for recruiting candidates for our openings.”
- “Enlisting a personal coach to aid me in understanding what my staff needs, motivates them, and what to look for in future staff hiring.”
- ”Offering appointments outside of our normal business hours, which we have had to reduce due to staff shortage.”
- “We have become creative with how employees can earn more PTO and flex time along with back of the house and sales bonuses. Surprise puppy cuddle sessions with our Local Animal Rescue League also help.”
To deal with supply chain issues:
- “We have had to rally with other suppliers and sometimes just make it ourselves.”
- “Doing more manufacturing in-house. Limiting suppliers to those that deliver promptly. Tired of waiting four to six weeks for delivery.”
- “We are using supply issues with vendors to incentivize holiday purchasing early. Also, raising prices to encourage purchase of in-stock items.”
The 2022 INSTORE Big Survey was conducted via an online form from mid-August to September and taken by almost 750 North American jewelry store owners and managers. The final results will be published in the November edition of INSTORE.
