The industry is undergoing tremendous changes, panelists agreed during a roundtable discussion on “The Evolution of the Jewelry Industry.”
Moderator Ken Gassman, of the Jewelry Industry Research Institute, started with an upbeat note, saying, “The recession of 2009 will not derail a basic human need: People’s desire for jewelry.”
He added: “The U.S. economy and the jewelry industry are going to recover from this recession. The U.S. government is acting very aggressively. Other countries haven’t been so lucky.”
He also said the industry has excellent long-term prospects. “In the years to come, jewelry sales growth should outpace regular sales growth,” he said. “We should increase our share of wallet in the next decade.”
Among the insights of the panelists:
Phyllis Bergman, president of Mercury Ring Corp., said that among the changes she’s noted are more consolidations and new partnerships. “There is going to be a big change in our expectations,” she said. “It will be harder for salesman to go out on the road. We will have to find new ways to sell our product.”
Mark Michaels, secretary-treasurer of Michaels Jewelers in Connecticut, worried, “The purchasing market is shrinking. There are less customers coming into our stores.”
He noted his company recently experimented with adding $30 charms. “We thought: How could you sell $30 charms when you are also selling $1,000 and $5,000 bridal? Well it’s been fantastic for us, and I can definitely say it hasn’t hurt our brand image in one way or another.”
He added: “We have to move out of comfort zone.”
Nehal Modi, CEO of Gitanjali USA, owner of the Samuels and Rogers chains, said jewelers should try to learn from other industries. “Consumers in a mall environment, you see them in every store besides a jewelry store,” he said. “We have to learn from other companies like Apple. Their stores are packed.”
Kathy Corey, of Day’s Jewelers, in Waterville, Maine, said the industry needs to target the self-purchasing female. “Over 70 percent of purchasing decisions in the household are made by the woman,” she noted. “Some say she is the new CEO of the household. Women are spending on themselves and doing it guilt-free.”
She said the industry also has to reach out to so-called Millennial (children of the Baby Boomers) consumers. “When you are showing jewelry to this group, rather than selling them on features and benefits, get them involved in the sales process,” she said. “That is far more meaningful to this consumer.”
Dick Fields, chief strategic officer of Unique Settings, said retailers need to hone their business plans. “Do you have a financial budget by classification?” he asked. “Have you come to the show with an open-to-buy plan? Was it done by category and are your purchases in line with your selling trends? Do you have cash flow to reorder? You may look at daily reports, monthly reports, but how often do you look at gross margin reports?
Abe Sherman, CEO of Buyers International Group, noted that the industry needs to take a harder look at how it moves inventory. “As an industry, we don’t think there is anything wrong with inventory that doesn’t sell,” he said. “That has to change.”
He said vendors needed to work more with their retailers. “We have to think of this as we are all in the same boat,” he said. “We have to work together to move inventory through the system.”
The final panelist, Ron Spurga, vice president of ABN-Amro Bank’s International Diamond and Jewelry Group, said the banks had toughened up their criteria for judging the industry. “The new buzzword is absolute transparency, or as close to absolute transparency as you can get,” he said.