By nature, retailers are upbeat, personable, and talkative. Most are also entrepreneurs who deal with the public, a job that’s daunting but rewarding. It’s nice to be involved in people’s happy moments.

Recently, though, I sense flagging optimism. Here are some key words: gas prices, deficits, health costs, declining housing sales, Iraq, layoffs, and floundering government. Our business depends on consumers feeling good, and that’s been difficult lately.

In the 1950s, jewelers were also in giftware, tabletop, leather goods, and appliances. Toasters used to be wedding gifts! Retail specialization drove most of those categories out of jewelers’ stores. Jewelers began to concentrate on their talents, especially diamonds and gemstones and better watches.

Through all these transitions, I have heard many retailers complain that they had to deal with new channels of retailing. Catalog showrooms, warehouse clubs, TV shopping, and now Internet retailers all came along as “threats” to the business. I always found this incongruous with the nature of entrepreneurs. New competition should hardly be a surprise. We have always been in an evolving industry. There is an old saying that one can never go back home. Wishing old days back is a delusion. Who wants toasters again?

In one way, the situation is like painting oneself into a corner. Retailers have grown and prospered by concentrating on diamonds, and now that bastion is being assaulted. But the Internet is not a competitor. It’s only a tool, open to anyone, and its power is being wielded by entities that have no allegiance to the old ways. Are retailers resentful because they lack expertise to use it effectively?

For eight years we’ve watched retailers react—or not react— to what others are doing on the Internet. First the Internet was laughed at; then it became an irritant; now there is anger and terror that it has become the “Rap” list for diamonds of any size. To a degree, it has, and will become more so. That means retailers have lost margin—or lost sales—in a core category.

Now we have a new “threat,” synthetic diamonds, on the horizon. This one is still laughed at by some and irritating to others. But too many view them with apathy or disregard.

Still, good retailers are moving right along. Some have grown remarkably in the last few years. They’ve become innovative merchandisers and marketers, expanded services, and worked hard in their communities. And they have built good Web sites and reached new customers. They follow trends and create excitement in their stores. And they know they compete with all luxury products.

We are on the verge of a core transformation of jewelry retailing in the United States. Malls will be dominated by a small number of chains, and upscale business will be dominated by strong independents that will be destination stores in their communities. There will be fewer of them, but they will be bigger, stronger, and ready to meet competition.

I hope retailers take on the realities of competing in the luxury arena. It’s time to move on. There is no going back home.