Half a century ago, Pearlman’s ­Jewelers in Battle Creek, Mich., was the classic local brick-and-mortar store. It featured a wide variety of fine jewelry, clocks, watches, and gifts that would appeal to the entire community—something for every life stage, from birth to marriage to retirement.

But as high-end, brand-focused designers exploded onto the jewelry scene in the mid-1990s, second-generation retailer Bill Pearlman began to develop a passion for showcasing young and talented artists he thought represented the future of the jewelry business.

“My background is in fine arts, so focusing on jewelry designers is a specialty that I immediately gravitated to,” Pearlman explains. At the same time, e-commerce was also moving front and center, and Pearlman jumped into the online game early, setting up a website in 1995.

The result was a complete shift in Pearlman’s business model. His store went from a full-service, mom-and-pop shop to a narrowly focused business devoted to designer-loving consumers.

What’s more, Pearlman began marketing to customers far beyond the Battle Creek area, offering the store’s luxury ­inventory to brand fans around the United States. “I realized we can’t be all things to everybody,” he says. And here’s something to note: Of the 14 independent jewelers who were once doing business in the Battle Creek area, Pearlman’s is the last one standing. “I can’t just run my business based on what the local community expects,” he says. “The Internet has allowed me to do exactly what I want to do, which is bring in the designers that I love and expose customers to their high-end design.”

Fierce competition from other independent retailers, big-box stores, and online ­jewelry sellers—not to mention fallout from a long, lingering recession—has pushed many small business owners to the brink. Now, more retailers are focusing their businesses on narrower niches—typically geared toward specific product or service types—that give them a competitive advantage over their peers. There are jewelers that specialize in custom design or expert repair; those that stock all the well-known brands and high-end designers; and those that concentrate on specific product areas such as engagement rings, diamonds, pearls and gemstones, estate pieces, or ethnic jewelry.

Photographs by Matthew Worden
Top right and above: One of the 50-plus jewelers at Seattle’s Green Lake Jewelry Works doing what they do best—custom work

“You need to decide what is going to be your particular claim to fame,” says Kim Gordon, a small business expert, author (Maximum Marketing, Minimum Dollars), and president of the National Marketing Federation. “Look at your competition: Where can you develop a competitive advantage? And look at your customer base: How can you fill a need?” 

Doug Fleener, president of Dynamic Experiences Group, a retail and customer experience consulting firm, says that niche marketing is, at its heart, about an intersection between market opportunity and passion. “It’s about looking at the opportunities around you based on your competition. The larger and more competitive your market, the more important a niche becomes. What are you passionate and excited about in your business?”

Photograph by Jeff Sciortino
In Evanston, Ill., Eve Alfille has carved out not only a niche—40- to 60-year-old female professionals who like understated luxury jewelry—but also a nickname: “The Pearl Lady.”

For Eve Alfille of Evanston, Ill., it was freshwater pearls and unusual gemstones. “I fell in love with the product, freshwater pearls, even though I know you’re not supposed to do that,” she says. “I was able to see that there was a gap, create a market, and generate interest through a not-for-profit organization I created called the Pearl Society.”

Soon, Alfille became known as “The Pearl Lady,” and a target customer emerged: “She is a female professional in her 40s, 50s, or 60s who appreciates luxury and fine jewelry, but doesn’t want anything ostentatious,” she says.

Narrowing into a niche naturally forces retailers to become more targeted with their customer base. They may find themselves appealing to young couples looking for unusual bridal options, older professional women seeking understated luxury, or art-loving bauble collectors. That can mean big changes in everything from staff education and sales tactics to marketing and store design.

For Jim Tuttle of Green Lake ­Jewelry Works in Seattle, custom design was a longtime source of passion and experience. But he saw an opportunity in his market for a large custom shop appealing to bridal consumers looking for something unique. “I was a bench jeweler and always wanted to focus on my own shop—we’re very focused on doing custom right,” he says. Now the store has more than 50 jewelers doing custom work in-house. “If you’re not focused on a niche these days, you’re dead in the water,” he insists. The customer expectations, however, are high, and the challenges many, he adds. “You really can’t afford to do anything wrong, from the product to the store environment to ethics and marketing,” he says. “When you focus on a niche, you can’t have a glaring weakness—you have to do everything well.”

A niche can be a business-saver, though, as it offers the opportunity to market beyond the local community. As the economy has soured, Tuttle has found it essential to expand sales online and invest heavily in website infrastructure. “Our local area really took a hit during the recession,” he says. “We decided to really push the Web. Now our Internet business has grown from 10 percent to 30 percent of our sales.”

However you arrive at your agreed-upon focus, says Gordon, the commitment to a niche business can be cost-effective and worthwhile—but it is not one to be taken lightly. “You always need to look for the target audience that is eager to buy what you want to sell and a good fit for your business culture,” says Alfille. “If you’re not always re-examining that effort and constantly learning more about your customer, you’re not growing.”

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