If you worry about too much competition, stay away from Fourth Street in Santa Ana, Cal.
Eight jewelry stores operate in a four-block stretch in the heart of downtown Santa Ana, a city of 300,000 about 40 miles south of Los Angeles. All eight report they are healthy and doing good business. Five are independents, three are units of chains. All eight pursue basically the same market, and all eight carry essentially the same type of inventory. They stay in business because they serve a loyal clientele. “The Hispanic customer, as a rule, is very loyal,” says Joe Elias of DiMitia Jewelers.
Seventy-four percent of Santa Ana residents are Hispanic. Most of them of Mexican descent.
Fourth Street is designed as a pleasant shopping area. It’s lined with trees, signs lie flat against the buildings and vendors sell tacos, burritos, churros and melons on street corners. The crime rate is low. In fact, the Santa Ana Police Department has a substation on the street, and the merchants association hires extra security. “It’s a family-oriented community,” says John Portillo of Latino Jewelers.
Much of the intense customer loyalty is built through extended relationships resulting from credit. Most stores offer a credit plan, and some, by their own admissions, are liberal in extending terms. Ninety percent of Valencia Jewelry’s business is done on credit, for example, and Mario Valencia says 90% of credit customers pay on time.
Teresa Saldivar of Teresa’s Jewelers has one customer, a nanny from Guatemala, who opened an account in January 1988 and has come to the store every week like clockwork since then. She has made 114 purchases ranging from $12.95 to $975. “Her average [purchase] is under $100, and she pays $150 every single week, and sometimes pays up to $250. She is never past due.” The nanny buys most of the jewelry for gifts, sending some back to Guatemala.
Adolfo Lopez of Maya Imports & Jewelers, sells about 50% of his customers on credit. “I have customers I give credit to without even signing anything,” he says.
Other services help to boost loyalty. Many of Valencia’s customers cash their payroll checks at the store, and the payment is taken out. “Customers want to make sure their credit is good,” Portillo says.
Sal Navarro, manager of Guadalajara Jewelers, a six-store chain, says he has watched many of his customers grow up. “They come in with their parents, then open their own accounts later,” he says.
Building trust among customers is extremely important, say jewelers. “That’s what brings them back again and again,” says Saldivar.
One way to build trust is to make customers feel at home, says Norma Doratt, manager of Don Roberto Jewelers, one of 46 stores in a chain that specializes in the Hispanic market. “Some of our customers go back 20 years to when the store here first opened. If customers don’t trust you, no matter what price you have on the jewelry, they won’t come back.”
Lopez links the fact that Maya Imports & Jewelers is family-operated with the trust he’s built. “We give them more personal attention,” he says.
Apparently trust and confidence works for all the jewelers. A jewelry exchange offering “prices at wholesale” is located nearby and advertises heavily, but has no apparent effect on the jewelers of Fourth Street.
A glimpse of the merchandise mix in each store shows many similarities. Gold is prevalent, mostly 14k and 18k, with some 10k. “We tried to sell 10k but it didn’t do well,” Valencia says. “When we went to 14k, we did much better.” Daniel’s Jeweler’s, which has 35 stores, sells some 10k merchandise, Manager Ruben Puebla says. Lopez says 85% to 90% of his gold sales are now in 14k. “People used to ask for 18k, but since the economy went bad in Mexico, they don’t ask for it as much.” Doratt points to the Hispanic culture as part of the reason for gold’s popularity. “It’s part of the tradition,” she says. “They treasure it for years.”
Religious jewelry, especially medallions, make up a large part of every store’s inventory. “Average customers have several pieces of religious jewelry, and they wear it on a daily basis,” Saldivar says. “Men usually wear a crucifix; women wear medallions.” She adds that medallions bearing the likeness of Our Lady of Guadalupe are the most popular gift for baptisms, communion and confirmation for boys and girls. Saldivar also carries a line of quartz jewelry from Mexico, pointing out that quartz “brings good luck. But they don’t buy pearls or opal because that means bad luck and grief.”
While they agree gold and religious jewelry designs sell well, the Fourth Street jewelers are not as enthusiastic about diamonds, except for wedding sets. “This is not a big diamond-buying population,” Saldivar says. “Besides some bridal business, we don’t do much.” Even the chains experience this trend. Navarro of Guadalajara says his clients are not into the quality of diamonds. “They buy because they like the style, not because of the size or color,” he says.
Two stores do a bigger diamond business. Education of customers seems to be the key. “We show diamonds, and customers don’t know much about them, so we explain and they buy,” says Don Roberto’s Doratt.
Portillo of Latino Jewelers says he views selling diamonds as a challenge. “I love selling loose goods; I love to help them [the customers] create a piece,” he says. “But you must educate them about diamonds. Every woman loves diamonds. We sell a lot of diamonds, and we sell a lot of wedding sets and trios.”
The stores also carry jewelry with the number “15” on it – rings, bracelets, necklaces and medallions. The 15th birthday is important to Hispanic girls, similar to the “Sweet 16” birthday experienced by their Caucasian counterparts. It’s celebrated with a ceremony called Quinceanera, and parents, grandparents, godparents and friends give gifts centered around the number “15” for the girl’s entry into womanhood.
Watches mean big business in the Hispanic community, the jewelers reported. Saldivar says her customers own an average of five watches each, with some owning as many as 10. Bulova creates watches especially for Don Roberto with Our Lady of Guadalupe on the dial; they sell for $250 to $400
in men’s and women’s styles. Don Roberto also has a religious line manufactured by Wittnauer. Daniel’s carries its own Paul de Balle house brand, and all the independents have a wide selection of watches. The only store that carries higher-end watches is Latino Jewelers. “I like to sell those,” says Portillo. “People say, ‘I don’t know this brand watch,’ so my challenge is to tell them about it and to get their trust so they’ll buy it.”
Serving the culture
Several stores use unique methods to attract new clientele. Ear piercing is big in the Hispanic community, and many parents have the ears of baby girls pierced shortly after birth.
Saldivar, who says her firm is the only independent store to offer ear piercing, gives her business cards to pediatricians and gynecologists and asks them to recommend her store to new parents. Serving on the board of directors of Western Medical Center has given her access. “Many times people bring the babies right from the hospital – some even still have the identification tags on their wrists,” she says. “By the time they’re a year old, they have maybe $500 worth of jewelry, if not more.” Portillo puts the figure even higher – “some children could have $2,000 in jewelry when they’re a year,” he says.
Portillo’s Latino Jewelers brings in a Spanish-speaking Santa Claus during the holiday season. “We start the day after Thanksgiving; many people bring their kids into the store just to see Santa,” he says. “We take a picture of the kids with Santa and give it to them in a folder. It brings in a lot of traffic.”
Don Roberto has conducted a Father’s Day sweepstakes with 90 pairs of Tony Lama boots as prizes and also tied in with the World Cup soccer championships in Los Angeles in 1994, a popular event among Hispanics. The firm also was a sponsor of a recent championship boxing match involving Oscar de la Hoya and awarded a $1,400 diamond watch to the winner. De la Hoya held it high and pranced around the ring. People came in the next day to ask for the “de la Hoya watch.”
All jewelers interviewed for this article are long-time Santa Ana residents, and all are veterans of the jewelry industry. All have seen many changes in the industry and the area. “When I first came, Santa Ana was primarily Anglo, and we had a lot of Marines from El Toro [a U.S. Marine air station nearby],” Portillo says. Hispanics came for the much the same reason any group moves anywhere. “Employment. There are jobs in agriculture and manufacturing companies,” he says. “I think most of them have become U.S. citizens.” Adds Lopez, “When I came here it was a ghost town. Now it’s the heart of the Hispanic community of Orange County.”
To stay competitive, the jewelers have had to revise their thinking regarding markups. It isn’t so much Fourth Street competition that bothers them as much as other jewelry retailers. “We have a lot of other competitors,” Navarro says. “We have Sears, Kmart and Wal-Mart, and they all sell gold.” Some other competitors are not as noticeable. Saldivar says many “freelancers” go to downtown Los Angeles, buy gold chains, medallions and bracelets, then go door-to-door through the Hispanic neighborhoods. They don’t have business licenses and often sell inferior merchandise, she says.
The competition within close proximity isn’t a problem for any of the Fourth Street jewelers. “We all have our own way of treating customers and doing business,” says Puebla. “There’s a market for everyone.”
Elias agrees. “When there’s a concentration of stores, it tends to draw more customers. A long time ago, I had a record store in Santa Ana. Then eight others followed, and my business grew because we became the center of the Orange County record business. And it’s the same way with jewelry. We’re the center of Orange County’s Hispanic jewelry business.”