The conference gathered a group of retailers together for two days of speeches and brainstorming. One of the big issues is how financially-stressed jewelers can manage inventory. Most of the speakers said: Blow out the old inventory (described as over a year old), and bring new inventory in. Granted, that was the consensus among the speakers. Some of the jewelers I spoke to were unconvinced.
As far as funding the new inventory, many jewelers today are doing this by taking in tons of memo. However, as we all know, this is not a perfect option. It lowers margins, and causes jewelers to neglect the inventory they actually own.
“What gets sold in your store?” asked sales trainer Kate Peterson. “All the bright new shiny stuff. And what happens to all the old stuff that just sits there?”
The memo system is also causing real strain to the jewelry distribution chain, which will eventually impact everyone. “People think that memo is free,” said Stuller chief operating officer Jay Jackson. “But you are just moving the cost of that inventory to your supplier, who is going to, somehow, pass it along.”
But there is a new spin on this. With Spence Diamonds now running stores at the former Robbins Brothers locations in Houston, there was a lot of talk about the attractiveness of their “brass and glass” format for jewelers. The advantage to this model is it lets consumers “try on” replicas of the pieces right in the store, thereby making it, arguably, a more “fun” experience that lets them shop without a salesperson hovering. And of course, it requires very little inventory, other than the prototypes, and what Spence has in their factory to assemble the pieces.
The disadvantage is it kills one of the main advantages brick-and-mortar jewelers have over the Internet – the ability to let a customer walk out of the store with a piece. And it means a major change in the jewelers’ business model, and new training for sales associates. But one can see why Stuller, which specializes in overnight delivery, would like this option.
On that same theme, right now, as speaker David Geller noted: “We are really the only industry that won’t let the customer try on its product.” However, there is talk of how RFID technology could eliminate some of the typical security prohibitions against having consumers trying on high-value pieces. Instore publisher Dan Kisch showed a video of a store where every item is coded with RFID, thereby making shop-lifting almost impossible. Fascinating stuff, and an interesting possible alternative to “glass and brass.”
I should have more about the conference later …