Trouble in River City

With all the trouble the industry has endured this year, the Music Man song title came to mind when I read about Jewelers of America’s decision to “redefine its relationship with state and regional affiliate associations.” According to the press release issued by JA, “its board of directors determined that its business model was not sustainable to cover its operating expenses.”

It seems to me that JA has put itself in an awkward and probably untenable position in taking this action and giving notice that the current arrangement will be terminated Aug. 17, 2009. The reaction of jewelers around the country has been negative for the most part and has resulted in a number of searing comments, as evidenced in various blogs.

I’ve always looked at the organization as the one that could and should best represent the interests of the retail jeweler, particularly the independent retail jeweler.

We know the number of independents has been in decline for some time now as smaller regional chains have been acquired by larger organizations. Equally important, many independents have simply closed up shop. Strategically, therefore, it makes sense for JA to recognize these realities and reevaluate its functions and relationships.

From my point of view of 31 years in the industry, it seems to me that the biggest problem facing retail jewelers isn’t education or global efforts to respond to non-governmental organizations and lobbying to have gemstones from Myanmar banned from importation to the United States. The biggest problem is as basic and fundamental as how to help independent retail jewelers do more business now. How can they generate more traffic today? How can they manage their inventories more effectively so that they actually do something about the major problem of always having too much inventory relative to sales as well as the wrong items in stock? Not to mention the fundamental inequity of competing against Internet retailers that provide their customers with a significant price advantage by not charging sales tax.

If we think about strategic direction and the fundamental role an organization is to serve, education is a legitimate function for JA to consider. However, strategically speaking, there is more education available in the U.S. jewelry community from organizations whose fundamental business is education, such as the Gemological Institute of America, American Gem Society, and Diamond Council of America. Product knowledge and educational resources abound. Who is better able to deliver an education product?

The tenor of the critiques suggests there is more trouble ahead for JA. Of the dozen or so opinions offered on the blogs, only one supported the decision to stop “operational assistance such as dues collection and database maintenance.” The press release continued that JA “would continue a positive ongoing relationship through other educational and marketing support.”

Sometimes the answer is simple. Focus on the business drivers. Develop traffic. Manage inventory effectively. Lobby on key issues. And, Promote. Promote. Promote.

frankdallahan@comcast.net