In the eyes of many, it stands on the threshold of change. Many long-standing beliefs about who the customer is and how jewelry is sold are being challenged. From the findings of the Worth–Harrison Taylor study about America’s richest consumers to the pithy observations of Tom Peters, America’s original business guru, to the disconcerting revelations of super-shopper Paco Underhill and the Retail Landscape Study conducted by the Diamond Promotion Service, it’s evident that traditions the jewelry industry has long considered immutable are in danger of becoming irrelevant.
Retail analysts often say that if you want to take the spending pulse of America, just watch Wal-Mart. But recently Wal-Mart did something it never did before: missed its numbers. So now America’s biggest retailer is making big changes itself. Long derided for undercutting local merchants, Wal-Mart is suddenly behaving like one of them and tailoring its assortments to the market rather than offering a homogenous selection from coast to coast. Hungry for a piece of the luxury pie it passed on before, the retailer tempts affluent suburbanites in one area with high-fashion clothes and $5,000-plus diamond rings, while still offering $68 diamond-chip jewelry to low- and moderate-income customers in another. Meanwhile, its Sam’s Club division is playing “can you top this” with rival warehouse club Costco. Sam’s proudly displayed a $250,000 diamond ring online last Christmas, among other pricey baubles not typically associated with discount selling. Costco, meanwhile, featured a 5.00 ct., D Flawless diamond for $89,000 on its Web site last year. Both, incidentally, listed the items’ prices—something traditional jewelry retailers are still loath to do.
JCK also asked a select group of industry experts to weigh in with their own answers to one single question: What is the most significant change you foresee in the next three to five years? Their answers were very telling, ranging from the need for a retail paradigm shift to learn manufacturing to the need to address a broad swath of social issues.
Here, in five revealing stories, is JCK’s 2006 Annual State of the Industry Report: