For the past six months, JCK’s editors have been seeking answers to questions like these. The results of their research are described in a special report in this issue. In some ways, the findings are not too startling. The report says publicly what many in the industry have said privately for some time. But if you stop and think about the findings for a while, you realize the report is really a statement that we’re passing through some watershed years.
The industry truly will be very different by the turn of the century.
If our forecast – really a forecast by more than a score of industry leaders and specialists – is right, traditional jewelers will lose about $2 billion in sales to other retailers of jewelry. The principal gainers will be mass merchants who sell at rock-bottom prices and those who sell jewelry via TV home-shopping programs and computer networks.
The prime losers will be traditional jewelers who offer no special reason – in merchandise, price or service – for consumers to shop with them.
In a way, this is a generational issue. Much of the strength of the “modern” jewelry industry dates from the late 1940s and early 1950s, when thousands of World War II veterans took advantage of the GIBill to get a start in this industry. Most of them chose retailing.
But now, nearly half a century later, many of the stores these veterans – primarily men – started have gone out of business or soon will. Many owners have no successors. Too few are ready or able to operate successfully in today’s more competitive and sophisticated market.
One thing our report reveals clearly is that the human element will continue to set winners apart from losers. Our business world may seem dominated by computer experts, financial analysts and cold-hearted bean counters, but knowledge about people and markets, along with sheer personality, still are what make the real winners.
GIA’s Bill Boyajian puts it succinctly: “The segment of the industry that will lose ground can be classed less by category than by those who do not educate their people versus those who do.” Further, when we asked our group of leaders to identify the most critical issue facing retailers of jewelry in the next few years, overwhelmingly they picked finding and training good employees.
The downside of our report – loss of market share, the demise of many small and middle-of-the-road jewelers – is harsh. But it’s also a fairly realistic look at the real world.
This is not a putdown of the traditional jeweler – far from it. The outlook is outstanding for the truly fine jeweler who specializes in unusual merchandise, offers excellent service and is a skilled businessperson. You might say we are seeing a return to the jeweler’s real roots, to an era when craftsmanship is the premium setting winners apart.
The explosive growth of and interest in so-called designer jewelry is part of this trend. Look back just 15 or 20 years and think what an innovation it was to have a handful of high-design jewelry makers at the New York JA show. Next month at The JCK Show in Las Vegas, The Design Center will have about 140 exhibitors. This end of the jewelry business is thriving.
So is in-store custom design. Almost every leading independent jewelry retailer in the country now makes a substantial amount of its own merchandise. This is not just a desire to be more competitive; it is a celebration of the jeweler’s craft.
These jewelers will own a goodly share of the market. So will a number of the high-volume outlets, whether stores, TV networks or computer networks. It’s common for some jewelers to sneer at such competition, pointing to shortcomings in quality or deception in pricing and marketing. That’s stupid. Sure, some high-volume merchandisers cut a few quality and ethical corners (as do some jewelers), but they also know how to run a business and how to court customers.
It’s a waste of time for the small independent jeweler to berate mass merchandisers; they couldn’t care less. The independent should try to see what business savvy can be learned by watching how the majors run their day-to-day operations.
We are at the end of an era. It was good and it lasted for 40 years or so. Now we’re entering another era. I’m optimistic it can be a time of high hope, performance and profit for the traditional jeweler. The opportunity is there to be grasped; those who do not grasp it probably will fail.