How Can Industry Halt the Move Away From Wholesale to Direct to Consumer?



When Marla Aaron came into the JCK offices three years ago to introduce herself and her line, I told her something that sounds rather harsh considering JCK’s retail reader core: “Take money from whoever is willing to buy your jewelry.”

This was me being realistic about the state of our industry: Many merchants often watch new lines develop for a few years before buying into them—if they lay down cash at all, considering the popular practice of consignment where designers fill store cases with jewels without pay until items sell.

Since Aaron’s debut, these realities have intensified. Many designers who wholesale struggle with decisions to consign goods out of fear they won’t land case space anywhere. On the flip side, some big-name designers (Slane and more recently, Kara Ross) have decided to abandon wholesale altogether. Plus, there are some once-robust showroom businesses such as Fragments and high-profile retailers such as Kitson that have closed or are closing up shop, leaving many to wonder if troublesome wholesale demands were partly to blame. Factor in the rise of e-retailers, some with drop-ship arrangements that can be more cost effective to manage than filling live store cases with goods, and you have some compelling reasons to question why makers would want to wholesale at all.

Further, recent nonindustry articles sound a death knell that could include jewelry. This summer, Tech Crunch inked “The Future Of Retail Won’t Be So Good For Consumers,” stating that brands will ultimately rule online and off-line spaces, technology is hurting retail (and retailers who can’t keep up), and in the end it is consumers who will pay. Then there is the Business of Fashion’s “The Future of Retail is the End of Wholesale” which pretty much nails what we all know is happening: “The entire economic model of revenue and profitability for retailers and the suppliers they do business with is collapsing under its own weight and soon will no longer function,” according to Doug Stephens in the op-ed. (Stephens is a retail industry futurist and the founder of Retail Prophet.) What or who is to blame? Technology and those who haven’t kept up, online retailers, brands selling directly to consumers, in-store experiences or lack thereof, and the cumbersome realities of retail such as good staffing? But blame doesn’t pay bills; all of these moves are a result of market realities that industry must maneuver to stay employed.

How can we rectify this downward retail spiral? Surely, Instagram is helping designers make sales and even pick up stores, a point that Aaron inadvertently discovered. Story in New York City has breathed new life into the retail experience, as its raison d’être is: “Point of view of a Magazine, Changes like a Gallery, Sells things like a Store.” And there are traditional retailers like Mark Moeller of RF Moeller Jeweler in Minneapolis on whom industry can depend to buy into lines. But what else can industry do to alter this sad course of events? One answer is something I consistently witnessed as the economy headed south. All the stores who thrived were so busy having in-store events and giving customers reasons like new lines to come through the door that they simply opted not to participate in the downfall as much as those who did nothing. Today is an evolve-or-die culture where the speed of change is astounding, and the realities of stopping are not an option for those who want to stay in the game. To disrupt this pattern, keep trying different ways to stay relevant in your market. Be inspired by the smart moves of others. Keep moving. Keep innovating. Have other ideas? Please share.

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Marla Aaron’s Instagram account helped her make sales to both consumers and retailers. 

The Style 360 blog is your editorial source for the newest jewelry, trends, market, analysis, trade show insights, designer profiles, and more.