Holland Jewelers is a midrange to upscale AGS store based in Moline, Ill. Founded in 1933, the store is about 160 miles west of Chicago, near the Illinois/Iowa border separated by the Mississippi River. The company serves the Quad Cities region of nearly 400,000 people, which includes Moline/East Moline and Rock Island in Illinois, and Davenport and Bettendorf in Iowa.

This full-service jeweler, which produces more than $1 million in annual sales, offers custom design and repair and has an in-house watchmaker in its 4,500-square-foot freestanding store. Jeffrey Holland, president and the third generation to run the business, reveals some of the factors behind his store’s success.

1. What are your best sellers? In terms of brands, Hearts On Fire, Rolex, and Tag Heuer. Overall, diamond jewelry—bridal and fashion—is our lar- gest category, accounting for 50–55 percent of our sales. Watches would be next, at 20–30 percent of our business. The strength of our watch division reflects our strong relationships with some of the big brands. We do a great job with basics, but we also have a sprinkle of unique pieces. Our products are on the conservative end, with an average ticket of $1,500. We tried some designers in the past, but they don’t want to come to a midsize Midwestern market unless it’s on their terms—and we just don’t feel it’s worth the investment.

2. What has been your most successful marketing program? TV and billboard are our most successful mediums. Also, they work well for us because our key vendors offer [co-op] marketing support in these areas. We don’t do a lot of events. Mainly, we just keep pounding away, doing what we’re doing and reinforcing our brand name and reputation.

3. What has been your best money-saving initiative? Installing the Advanced Retail Management System software in 1995 has really made an impact for us over the years. It’s helped us produce sound financials and has improved our reorders and inventory control. It has really improved our cash flow and smoothed out the bumps. For one thing, it helps us keep our best sellers in stock, which has helped generate profit. ARMS also has helped us weed out things that weren’t generating profit or took too long to sell. Sometimes, knowing what didn’t sell is more valuable than knowing what did sell.

4. What has been your most successful strategy for increasing sales? We offer great flexibility—there are no hard and fast rules, and we make exceptions all the time, within reason, to keep our customers happy. It’s something you really don’t see anymore, and we believe it’s been a big factor behind our success. We have an extremely loyal customer base, with the majority of our sales coming from repeat business and referrals.

5. What has been your biggest business challenge—and what have you done to resolve it? The continued pressure on margins. It takes a lot of money to run a jewelry store today, and the customer has become much more educated about diamonds and jewelry through the Internet. There is so much competition out there—from other jewelers, from the Internet, and from other luxury goods and services they spend their discretionary dollars on. To stand out and draw their attention, you need to find out who they are, what they want, and convince them why it’s worth it to shop at your store. We do this by sticking to the fundamentals we know we are good at, and constantly trying to improve ourselves.
   For instance, we seek out feedback from the customer, and we use computerized inventory management programs to learn our merchandise strengths and weaknesses. We also look at the trade and fashion magazines, attend trade shows, and invest in training our people—all to keep abreast of the fast-paced changes in the industry so we can offer the right value proposition to the customer.