Why are so many independent jewelry stores going bust? Perhaps they are falling into some decision traps that could be avoided. Consider how companies that made it through those first few credulous years come to rely on all the lessons learned to guide them in their future decision making. Success begets success; but only for so long as we are now seeing.
We live in a society that is very demanding and requires retailing approaches to be very dynamic. As much as things don’t change . . . yes, they really do! Family owned and operated businesses probably feel the challenge of change more than most. Especially when the company’s final business decisions are being made by someone with lots of success over several decades. The decision criteria of the past has worked well for generations in the jewelry industry; “but the times- they are a changing.” What made for the glory days of the past may not now mirror today’s market conditions and reflect the preferences and demands of today’s jewelry consumers.
Here are three traps that jewelry managers need to be aware of. The first trap relates to the business environment. Investments that support the way the business has been run for decades may not now best position the company. The store environment must say 21st century. Décor of the past does not speak to today’s shoppers. Jewelry stores must deliver the type of shopping experiences that “wow” jewelry customers’. Retailers need to regularly invest in updated store environments and in technologies like point of sale and web sites and social media to present offerings in more relevant ways.
The second trap is all about what made the company successful and what will continue to make the company successful. Owners and top management too often fixate on what made them successful and fail to recognize when something new is displacing it. This sort of cognitive dissonance creates feeling of resistance to change by employees and customers. Keeping unsellable jewelry until that day when it finally sells may be an example. Too many shoppers are making negative value judgments when they encounter inventory that they don’t find to be fashionable and alluring. Many stores in years past could wait out slow moving merchandising and just leave it on display waiting for that magic day when just the right customer would purchase it. Today’s shoppers are different. They demand deeper selection in the specific type of merchandise they are interested in. Unsellable merchandise is a barrier to a store’s ability to refresh inventory with jewelry in higher demand. Managing a jewelry store in 2011 is very different from years past.
The third trap can be seen in the way the company wants to do business. Too many well established independent jewelry companies focus purely on the marketplace of today and fail to anticipate the future. The company gradually becomes less competitive. This is often reflected in unsellable merchandise that is no longer support with current fashion trends. Wayne Gretzky, a famous hockey player was asked how he could be so successful playing hockey. He said he skated to where the punk was going to be. Too many independent jewelry stores have inventory that current fashion trends have pasted by. Shoppers have passed over the items hundreds of times and yet there the merchandise sits. We are no longer in highly inflationary times and unsellable merchandise is not going up in value. The current price of gold may make redesigning unsellable jewelry more palatable.
The approach to retailing in the 21st century depends as much on gaining access to reliable information as it does knowing how to use information to create value. The lessons of decades past still have merit, but they need to be tempered with a strong dose of today’s reality. Selection is still the number one reason why shoppers visit retail stores. Having the right jewelry merchandise for the type of customer attracted to a specific jewelry store is still paramount. However, the tools to build store traffic, the merchandising strategies of generating margin and the management philosophies of how to run a successful retail jewerly store are all changing.