Many jewelry retailers would agree that 2010 was the year that marked a slight turn for the better. With that said, however, there’s a consensus that the luxury industry isn’t out of the economic muck quite yet with high unemployment predicted to be the norm for the next several years.
Now more than ever, retailers need to pivot faster in response to market changes. They need to better leverage business practices that worked well and fine-tune or drop ways of managing their business that proved to be clunkers. This week Retail Details highlights the business practices of three jewelry store owners in 2010 to find out what worked, what didn’t, lessons learned this year, and what they’ll be doing differently in 2011.
Michael Nedler and Mark Allen, co-owners of Sonny’s Rocks
Sonny’s Rocks
Denver
Michael Nedler and Mark Allen, co-owners
What worked in 2010
For Michael Nedler and Mark Allen, co-owners of Sonny’s Rocks, the change from radio advertising to cable TV was a big win. In the past, Nedler and Allen were competing on radio with big chain names such as Shane & Co., Trice, and Jared.
“Cutting through all the noise and clutter and competing with these big names on radio wasn’t working,” admits Nedler. “Plus, I just wasn’t reaching the bridal demographics needed to grow the business. Now I’m all over cable. I know it’s working because I hear from many customers in the store that they saw the store ads on certain cable channels.”
Part of the focus for the business partners’ cable TV ads is Pandora, a product line Nedler and Allen brought on in March 2010. “My Pandora business grew because of the cable TV ads,” says Nedler.
Nedler makes an astute observation about carrying Pandora. He views Pandora as the “advertising within the advertising.” The price-point friendly charms brought in roughly 500 new customers in 2010. “If I can convert 5 percent of these new Pandora customers to make purchases of finer jewelry, that’ll be huge for our business.”
Lessons Learned in 2010
Thirteen months ago, Nedler and Allen officially traded their old image—an upscale jeweler in an exclusive Denver shopping district—for a hip, edgy persona in their new, high-traffic location across from a large shopping mall. To add to the rock ’n’ roll component, the store owners came up with the name Sonny’s Rocks with a diamond ring in the logo.
“We found that in the first 13 months, not everyone knows we’re a jewelry store based on our name,” says Nedler. “Next year we’re going to change our name from Sonny’s Rocks to Sonny’s Jewelry Rocks.”
Another lesson learned for Nedler and Allen was rethinking traditional trunk shows. For the rocking, retailer twosome, trunks shows were “okay” for business in 2010. Hosting concerts of local bands didn’t work as well as Nedler and Allen had hoped, but they haven’t abandoned the idea just yet. The business partners have a gut feeling that being involved with local music scene in some form could be a real winner in branding the store with younger, rockin’ customers in the bridal age group. In 2011, they’ll continue to work and rework that idea.
Looking Ahead at 2011
Nothing serves a retail jeweler better than searching for good ideas far from the confines of their jewelry store. And, for Nedler, he looks for good ideas at the annual International Consumer Electronics Show in Las Vegas, which runs January 6–9.
In terms of inventory choices, Nedler and Allen will be moving a bit away from classic diamond jewelry and bridal to designer-produced bridal and diamond jewelry. “At trade shows this year, I’ll be on the lookout for new designers to bring in to the store in 2011,” says Nedler. “We want to be the store that provides designs no one else has in our market.”
One New Year’s resolution Nedler is making is to work more on his store’s Facebook page. “We let that lapse a bit this year,” Nedler admits. Nedler likes to follow Eyetique on Facebook for ideas for Sonny’s Facebook page.
“A friend outside the industry suggested I like Eyetique’s Facebook page,” says Nedler. “They do a lot of fun, interactive things with their customers I think are clever and well done.”
Tom and Jacki Duma, co-owners of Thom Duma Fine Jewelers
Thom Duma Fine Jewelers
Tom and Jacki Duma, co-owners
Youngstown, Ohio
What worked in 2010
For Tom Duma, one of the best decisions he made in 2010 was to be part of a peer-review group, in his case BIG (Buyers’ International Group). Duma has learned much from other store owners in non-compete markets.
“I’ve developed a whole new focus on every part of my business,” says Duma. “It’s because of the ideas, energy, and enthusiasm from this fellowship with other retailers that my business is up 40 percent for the year and a 45 percent increase in December sales alone compared to Christmas 2009.”
Some big changes for Duma and his staff in 2010 were going from a single weekly staff meeting to daily training exercises. Duma concentrates on sales, service, product training, preparing for store events and, of course, CRM (Customer Relationship Management), the store owner’s new mantra.
Through his peer group, Duma made strategic plans to establish many operational goals to his business, starting with the retailer adage of working “on” his business instead of working “in” his business. “This year, and my goal for next year, is to continue to work ‘on’ my business at least 16 hours a week,” says Duma.
Other big changes to Duma’s operations include an organizational chart that clearly defines roles and responsibilities, more targeted marketing, and increased CRM. In 2010, Duma and his staff did two CRM-based events. The event in August resulted in a $200,000 day. In the lead up to the event, Duma and his staff made roughly 4,800 phone calls to customers, personally inviting them to the special sales event.
“In the past one of our best days was December 23, 2007, when we had a $108,000 day,” says Duma. “We blew that old figure out of the water in the first week of August, normally the slowest time of the year.”
The CRM approach has proven to Duma and his staff that pushing out advertising and then waiting for customers to come in is an outdated business model. “These days, sales staff must bring the customers in through customer outreach,” says Duma.
Other operational decisions that worked well for Duma is maintaining his 2008–2009 advertising budget for 2010, but using it differently. Like other jewelers, Duma is using a more targeted approach to reach smaller, measurable groups.
“It’s laughable that many jewelers say that 50 percent of their advertising expenditures can’t be measured,” says Duma. “I get better return on investment with more targeted marketing in part thanks to my new high-tech traffic monitoring system that allows me to filter out the day-to-day traffic like the FedEx and UPS guys.”
Lessons Learned in 2010
For Duma, thanks in part to his peer-review group, there were no real problems during the year that would be part of an end-of the-year catharsis.
Looking Ahead at 2011
Still, given Duma’s busy schedule, he does have a big regret for 2010: his main website. “I’m disappointed that my main website production hasn’t been as well managed as I would have liked,” says Duma. “In 2011, my big goal is to make our main website better.”
Duma would also like to better leverage his activity on the social media websites and is looking to kick that effort off in 2011 by starting a blog.
Linda Breakiron, owner of Breakiron Jewelers
Breakiron Jewelers
Linda Breakiron, owner
Erie, Pa.
What worked in 2010
Linda Breakiron, owner of Breakiron Jewelers, had great success in 2010 being more of a specialty jeweler—what some would call a personal jeweler within a retail jewelry store that brings the store to the customer. Breakiron found that throughout the year customers appreciated the extra-special service touches, such as speaking with customers before going to a trade show, asking permission to send images of jewelry that would meet a customer’s jewelry requirements.
“Customers loved it,” says Breakiron. “They could see a variety of jewelry pieces we normally don’t carry in the store. By sending images from my iPhone, it was like having them walk with me at a major trade show like JCK. We’re really after giving our customers more one-on-one treatment.”
In 2010, Breakiron was more active with Facebook. The social media platform was used more to promote store events before, during, and after scheduled events, which, in turn, garnered more fans and friends on Facebook. The most successful event in measuring meaningful interaction between Breakiron and her Facebook friends and fans was her Finders Keepers event held in mid-November. She primed the pump with postings before the event. And, with the help of her radio partner, airing clues where to find wrapped gifts of jewelry (hidden in plain sight in public places), customers in her market caught the Finders Keepers fever. In addition to frequent Facebook postings on event updates and clues, as people in her community found Finders Keepers gift, Breakiron would upload a picture of the person or family on Facebook and tell their Finders Keepers story.
“This really generated a lot of interaction and buzz about the event, not just on Facebook but in the community as well,” says Breakiron. “There were so many touching stories surrounding this event. People posted comments on Facebook, sent e-mails, called the store, left voice mails. There was a tremendous outpouring for our event that demonstrated the importance of giving something back to the community.”
One Finders Keepers gift was hidden at a local cancer treatment center. When the gift was found, it was raffled off to help those without medical insurance cover their treatment expenses. “Cancer has taken lives close to me and my family, so this story really hit home for me,” says Breakiron.
Lessons Learned in 2010
This year Breakiron had enough of traditional sales. For Breakiron (and many retailers), gone are the days of hosting a big sales event to blow out old inventory. “People just don’t buy into it any more,” she says.
Moving forward, Breakiron is looking to be more “pin point” in her sales by targeting special discounts on certain jewelry pieces to smaller, special audiences.
Looking Ahead at 2011
Breakiron focused a lot of attention on Pandora in the first half of 2010. In the latter half of the year, she found herself playing catch-up on her bridal and diamond inventories. With the Pandora portion of her business running smoothly, she wants to continue her work of having a more structured price points in these two categories.
In addition to having various price points, Breakiron wants to do more with less inventory in bridal and diamond coupled with more strategic buying. “I’ve been successful in doing this by listening to what jewelry styles customers want, staying on top of trends, stocking items that historically have sold well over the last two to three years, and reordering the solid sellers such as halo rings,” says Breakiron.
She sees this as a way to not only improve bridal and diamond sales, but also to achieve her goal of increasing her average ticket sales by 20 percent. “I’d like to increase that average by more, but realistically, it’s better to take small steps,” says Breakiron. “To eat an elephant, you have to take one bite at a time.”
Another goal for Breakiron in 2011 is to keep up her networking. Being part of the Rotary Club and professional networking groups of local business owners and assuming leadership roles with charities has not only given her a chance to interact with like-minded people and entrepreneurs, but has also been a great addition to her corporate community outreach goals.
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