The deepening U.S. recession has affected more than half of the businesses in the North American jewelry industry, a JCK survey found. Most expect it to get worse before it gets better.
Forty-eight percent of retail jewelers polled said their businesses have been affected “somewhat” or “a great deal” by the economic crisis. Sixty-nine percent said the biggest impact is on sales. Far behind in second place (10 percent) is difficulty getting loans, credit, and other financing.
Nine of 10 respondents expect the crisis to have “some” or “great” effect on U.S. retail jewelers in the next two years.
To cope, many jewelers are focusing on customer service and marketing. Other strategies include buying less new inventory and only what they can afford; selling from what they already have; being creative in new designs; using alternative, less expensive metals; lowering price points; and avoiding borrowing as long as they can.
Some jewelers are taking a militantly positive approach to business. “We’ve chosen to not participate in the recession,” declared Pennsylvania jeweler David Mazer. “We’re paying more attention to existing clients and how we can increase the business they represent, inclusive of referral business from them.”
As for manufacturers, suppliers, and wholesalers, 64 percent say the economic crisis has affected their business “somewhat” or “a great deal.” As of late 2008, only one in four hadn’t felt any impact. For 41 percent, the biggest problem is getting financing to underwrite their operations.
Vendors are more pessimistic than retailers. Seventy-six percent expect this recession to have “a great effect” in the next two years.
To cope—in addition to downsizing, boosting advertising, and operating in as lean a manner as possible—some manufacturers intend to make more unique pieces and increase quality while keeping prices affordable. Others are providing more marketing assistance to create interest in their products, switching from 14k gold to mixed metals and sterling silver, and investing in internal systems to—as one put it—“position the company for success when the market turns.” Customer service remains a top priority.