Big Looks for Not-So-Big Prices
Given the economy and the continuing trend toward fashion-conscious jewelry, look for more use of inexpensive colored stones that add a big on-trend look without the big price tag. Similarly, more companies are incorporating lower-quality diamonds in fashion-conscious pieces that call for small-stone accents.
What this means for jewelers: Selling these style-conscious goods requires an approach that focuses on trends, fashion, and accessorizing rather than the specs of the materials.
Silver
In 2008, designers across the board launched silver versions of their collections (or silver lines that complement their higher-price gold pieces). With consumers increasingly price conscious, and silver increasingly accepted in the fine-jewelry realm, watch for more companies to follow suit in 2009.
What this means for jewelers: Designer silver lines present an opportunity to offer fine design and craftsmanship at affordable prices. They also teach customers to appreciate the designer and brand, which can lead to future sales of complementary higher-price gold jewelry.
Choosy Consumers
As shoppers cut back on discretionary goods, jewelers need to focus on tugging at emotions, offering incentives for staff and shoppers, and fearlessly swapping out old ideas for new.
What this means for jewelers: Focus promotions on message-themed jewelry and life events as well as pick-me-up gifts. Start a customer rewards club and an electronic newsletter touting monthly raffles and Internet-only deals. Let retail brands you admire (Neiman Marcus is one of our favorites) inspire you.
Neal Goldberg
The new CEO of Zale Corp. brings a wealth of fashion and mall retailing experience to the troubled jeweler. His vision has the potential to effect much-needed change in the firm and influence the entire mall-jewelry sector, which everyone agrees needs differentiation. Goldberg is not the first to attempt a Zale turnaround, but he is the first to speak bluntly about what’s holding mall jewelers back.
What this means for jewelers: If Goldberg succeeds at his mission and other mall jewelers follow suit, it could drive not only revitalization of the mall sector but also more consumer interest in fine jewelry generally.
Cash
It’s the best protection against nervous bankers and collection agencies. Times are tough but not everybody is strapped. There is money to be made, even if it’s on a scaled-back level compared with the flush levels we’ve grown used to. But times like these have an unsettling way of separating sound financial practices from smoke and mirrors.
What this means for jewelers: The more a retailer can pay cash, the better positioned the business will be with suppliers and bankers. This means not only getting better terms for goods but also possibly getting better stones and selections than a competitor who takes everything on memo or takes months to pay. And when it comes time to obtain a business loan, proving you don’t really need it is the surest way to be approved for it.
Diamond Empowerment Fund
With support from the Diamond Trading Company, Diamond Information Center, and businessman/philanthropist Russell Simmons, the industry’s newest charity—supporting education in Africa—is off to a strong start. Simmons is tapping into the fashion and celebrity worlds, and some industry heavy hitters have joined the DEF board. DEF’s “education, not handout” message—along with a gentle conscience nudge about giving back to the continent that has provided so much to this industry—has resonance.
What this means for jewelers: With consumers basing more purchasing decisions on how much good it can do for others, this is a key time to tap into cause marketing.
Health Care Reform
The health-care plan proposed by President-elect Obama has three elements that would affect small businesses: a refundable tax credit of up to 50 percent on premiums small businesses pay for employees (if they offer a “quality health plan to all employees and cover a meaningful share of the cost of employee health premiums”), reimbursement of employer health plans for part of any catastrophic costs above a threshold (“if they guarantee such savings are used to reduce the cost of workers’ premiums”), and allowing small employers to enter a National Health Insurance Exchange to purchase a private or public plan.
What this means for jewelers: If Congress passes the Obama plan, or something similar, some jewelers might be able to provide better coverage to employees than they’re able to offer now. (Some small businesses may be exempt, but “small business” remains to be defined.) The various options would be subject to regulation, however.
The Forevermark
This year, De Beers will probably settle its 60-year-old U.S. legal problems. Will it abandon its decades-old tradition of generic advertising and promote its proprietary Forevermark brand, as it’s doing almost everywhere else in the world? Or will the recession convince the company it’s not the right time to introduce a new brand? No one knows, but if the Forevermark does come here, most believe it will have a major impact on the market.
What this means for jewelers: Many jewelers have done well hooking up with De Beers’ promotions over the years. But in the end, they will have to decide if this new brand is right for their store and their image.
Consignment Wars
The recent dispute over the consignment jewelry given to Whitehall has made many in the industry more aware of the perils of memorandum. Organizations like the Diamond Manufacturers and Importers Association are urging their members to file Uniform Commercial Code forms when they give out goods on consignment. As the group’s executive director recently told a meeting: The UCC is “not perfect, but is far better than doing nothing.”
What this means for jewelers: Expect more suppliers to ask for UCC forms when giving out consignment—and some may avoid memo altogether.
Diamonds Promoted As A ‘Store of Value’
In an era when stocks and real estate are showing wild gyrations, are diamonds an ideal hard asset? That’s what many in the industry think, noting that diamonds are one of the few objects that hold their value. DTC’s holiday campaign, though it focuses on emotion, also runs along these lines.
What this means for jewelers: Be familiar with how the media are promoting diamonds as something that holds value, so you can discuss this tack and work it into your sales pitch.
Counterfeiters, Beware
Luxury watchmaker Vacheron Constantin’s Quai de l’Ile uses the same state-of-the-art security printing technologies used in Swiss currency and passports as a guard against forgery, counterfeits, and theft. Semitransparent dials use security filmwith secret texts, precision markings, micro-characters, security inks, innovative graphics, and invisible ultraviolet markings.
What this means for jewelers: Anything that helps foil counterfeiters is good news.
Feminine Influence on Watch Design
As more women buy fine watches for themselves, prestigious brands like Baume & Mercier, Jaeger LeCoultre, and Vacheron Constantin are adding female watch designers. Feminine influences are seen on watches’ exteriors and interiors.
What this means for jewelers: The notion that watches are fashion accessories is gaining traction, and it’s a great way to ease female shoppers into higher-ticket purchases. While some women may retain cultural conditioning that says to wait for a man to give them a diamond, there’s no such rule about a luxury watch.
Designer Brands
In 2008 Badgley Mischka branched into fine jewelry, and Diane von Furstenburg expanded her venture with H. Stern. As the fashion-jewelry connection continues to gain ground, expect to see more big fashion names launching fine-jewelry collections.
What this means for jewelers: Because many of these designers are pairing up with established jewelry wholesale operations, there are new opportunities to market well-known fashion brands in the fine-jewelry store.
Higher Values for Natural-Color Gemstones
The gap between easily affordable gemstones and increasingly rare natural-color gemstones will widen as enhancements like gamma irradiation and diffusion treatments become even more commonplace, spurred by the need for more gem materials to fill the accessories desires of the fashionable.
What this means for jewelers: Gemstone inventory may be more difficult and expensive to replace. Restock when you have the opportunity.
Gem Labs Under Pressure
With treatment laboratories outside the United States heating or irradiating every known gem material, watch for growing frustration among gem suppliers and retailers over the lack of important disclosure information. Gem grading and identification laboratories will find themselves even more understaffed and ill equipped to handle the unknown. The time and effort—and thousands of dollars invested—to identify treatments on relatively inexpensive gem materials may seem like a poor use of resources.
What this means for jewelers: Disclose as much as possible, but do not guarantee a lab’s or a supplier’s opinion.
Buying Gold
Job losses, consumer debt, and home foreclosures, coupled with high gold prices, are turning some customers into salespersons—of their own precious belongings. Retailers report a healthy business in buying back gold from consumers. Expect the trend to escalate.
What this means for jewelers: Mystery-shop competitors who buy gold and structure your rates competitively. Communicate via signage and ads. Sweeten deals by allowing gold customers to enter a raffle for the chance to win a gift certificate to your store, but check with Jewelers’ Vigilance Committee and local sweepstakes laws to make sure you’re in full legal compliance.
Fair Trade Gems and Responsible Mining
Fair trade gems and responsible gem-mining practices will become even more important in 2009, because consumers will be choosy about where they spend their money. Surveys show they want more than a just another pretty bauble; they will spend their money where it can do the most for the greater good.
What this means for jewelers: Look to your gemstone suppliers for information on responsible and ethical gem mining and fair trade gems.