Searching for Excellence in the Jewelry Industry

“Shoot all the men.”

Tom Peters thinks that would be the fastest way to improve the jewelry industry, at least on the retail side. An odd thought coming from one of the very gender he suggests eliminating, but Peters isn't known for mincing words or sugarcoating his message. And his message to the jewelry industry is this: The shopping experience stinks, and it needs to change.

While his solution was made in jest—he doesn't really advocate mass murder—his concern about the jewelry industry's future is anything but funny. And he's not alone. A number of outside observers, such as noted retail anthropologist Paco Underhill (See “America's Top Shopper Talks Jewelry,” p. 110), market analysts Doug Harrison and Jim Taylor (See “Aim Rich, Reach Everybody,” p. 93), and even comedian Joan Rivers (See “Can We Talk ... About Jewelry,” JCK, June 2006, p. 218), have made many of the same observations Peters does, which is that the standard model of jewelry retailing is fundamentally unappealing to consumers, and if the industry is to survive, it needs to make some significant changes very soon.

“First of all, an exceptionally high share of profitable independent jewelry stores is owned by older people,” says Peters. “I've never seen any industry with the age distribution of jewelry stores. It's absolutely astonishing how many are 80-year-old family businesses with 57-year-old men in charge.”

He adds that these store owners are typically middle-class people who have come into the business, made a few million bucks, are perfectly comfortable with their lives, and don't see any need to change. “People don't change because they think it's a good idea. People change because they have to,” he says. “I don't see any forces pushing on the industry to change, but what I don't understand is, it's happening in so many other industries, why not jewelry?”

Why not indeed? Or, more to the point, and far more worrisome, is the industry simply not there yet? Then the question isn't why, but when.

Peters likens the retail jewelry arena of today to book retailing 20 years ago. Independent booksellers used to dominate the retail scene, but megastores like Borders have edged out most of the independents. Sara Nelson, editor-in-chief of Publishers Weekly, concurs. Even 10 years ago, she says, there were probably twice as many independent bookstores as there are today, and of the remainder, fewer than 5 percent are thriving, profitable, influential retailers.

Peters says independent jewelers are extremely vulnerable if a Borders-type store were to launch in the jewelry industry. While Nelson cites the price differential that big booksellers—and now big-box and warehouse stores—can offer buyers as a primary driver of the change, Peters feels the shopping experience is equally important.

Most jewelers, he says, put too much focus on the steak and not enough on the sizzle, i.e., too much emphasis on gemology and technical matters and not enough on creating a buzz so that jewelry becomes a must-have product. Jewelers, he said, should be having parties—every week, every month, or as often as necessary—and emphasizing the product as a fashion accessory to be worn in the spirit of fun and enjoyment.

He cites a sizzle-to-steak example close to home: his wife. Peters is married to Susan Sargent, a well-known home furnishings designer. Much of what he's learned about lifestyle selling and the female versus the male approach to retailing has come from observing her business.

As a woman in a male-dominated industry, Sargent found tremendous resistance to an idea that seemed like common sense: Whether in a store or at a trade show, home furnishings should be displayed in room tableaux so the buyer can visualize how to use them and incorporate them into his or her life.

She was looking at the product from the customer's viewpoint, Peters explains, whereas the initial reaction of most of her male colleagues was to turn a table on its side and examine the wood, how the legs were turned, and with what kind of lathe. Of course quality is important, he says, and buyers want assurance that a product is well made and well designed, but that's only part of the whole. They're going to be using the table right-side up and putting things on it, not keeping it on its side to look at the legs.

Jewelry shopping has one critical element that most other retail categories don't: the need for security. When the product has to be locked up, is there still a way to make the shopping experience less intimidating?

Absolutely, says Peters. “I suggest every jeweler spend [$15] and read Paco Underhill's first book [Why We Buy: The Science of Shopping]. Most of what he suggests is free, and small changes make a big impact.”

Peters has also learned a lot about merchandising from Sargent. In the end, he says, it's all about display. “In every industry, some displays entice, and others turn off. There are 80,000 ways to display stuff, and a good display can make the fact that the merchandise is under glass disappear.” Mostly, he says, it comes from the lighting, and the first investment a jeweler should make in a display is hiring a top lighting designer. Not just someone who knows the technical specifications of lighting, but a true lighting designer.

“You can do anything with lighting! At the V&A [Victoria and Albert Museum, London], they show bright lights on textiles for 15 seconds at a time, set off by motion detectors when you walk past.” Textiles can't be kept in bright light because of fading, but they can't be seen adequately in dim lighting, so here was the perfect solution. “It's the classic analogy of something that doesn't make sense until it makes sense,” Peters says.

Two other examples of ideas that didn't make sense until they made sense are the Build-A-Bear stores and Lowe's hardware stores. “Build-A-Bear is fabulous! Its Web site is fabulous, its stores are fabulous, and it's a fabulous place to have a [children's] party,” says Peters.

“Lowe's nailed Home Depot to the wall by going after women. The Home Depot guys came out of the old hardware-store tradition; the Lowe's guys didn't. They came from a merchandising background. When Home Depot came along, they tried to supplant the corner hardware store, which was a dark, dingy place that guys go.” Lowe's stores, on the other hand, featured brighter lighting, wider aisles, and appliances, cabinetry, and home goods set up in display vignettes so that women could visualize the products in their own homes. (Home Depot, incidentally, has since adopted many of those same merchandising philosophies.)

Peters would also like to see more certificated or diploma-awarding merchandising courses in the jewelry industry—and find young people who are doing it right. “To hell with the fogies!” he says.