Recently, I had the opportunity to test market a new product that would provide a significant benefit to jewelry manufacturers. It’s a computer program that incorporates product images and data along with unique customer data. The benefit to the manufacturer is a significant reduction in sample line investment and a consequent significant reduction in insurance expense. The benefit to the retailer is the ability to see more samples more quickly. The benefits to sales representatives are reduced risk and more and better information that could be quickly retrieved as needed.
When times were really good there was a notion that jewelers should focus on selling product that some-one else made. The theory of the case was that specialization and division of labor had finally come to the fore in the retail jewelry world. After all, the theory stated, spending time making or even repairing product was better left to the specialists of that skill: manufacturers and job shops.
In conducting my research, I visited a number of different jewelers. Two stood out. One is what I would describe as a seller—some-one who had adapted to the new reality of the retail jewelry world. The other is a hands-on jeweler who manufactures and repairs product, a job shop that also has a retail facility as part of the business.
The seller’s business has been very difficult. He has survived by buying gold from consumers and living off the difference between what he paid for it and what was paid to the retailer by the refiner. The other business, the jewelry maker, was doing quite nicely as a result of his focus on custom work.
Despite the difficult economic times the industry faces, the entrepreneurial spirit of the retail end of the business is noteworthy. The jewelry maker years ago recognized that his skills and abilities lay in making and repairing jewelry. He was so good at it that jewelers in the area outsourced their repair work to him. Over a period of time he acquired more equipment and developed the skills to incorporate it into his business. Meanwhile, his wife ran the front end of the business selling merchandise that was largely purchased.
The jeweler’s son entered the business with a business degree and significant interest and skills in computer technology. So the owner purchased CAD/CAM equipment, adding even more ability to do custom work.
The challenges jewelers face today are many. Differentiation remains an important distinguishing aspect of any jeweler’s appeal. The capacity to do custom work, to design and execute a unique design for a client, and showing off exceptional technical capabilities are important differentiators for a jeweler to communicate to his market. In the two examples cited above, it is the prime reason for weathering the storm for one and a more trying time for the other.
By the way, both retailers thought the new computer program from the manufacturers was a terrific idea that they would use in their buying process. Adaptation to a changing environment is what Darwin’s Law is all about!