It was an odd counterpoint: Some of the most passionate defenders of the new direction of the Diamond Trading Company recently learned that they’d been tagged to lose their status as sightholders.
The buzz surrounding this decision began circulating at The JCK Show ~ Las Vegas. Many wondered why the organization that so successfully designed and developed a business plan to mine and market diamonds would make this startling announcement immediately before the show, causing some of their oldest—and presumably best—clients great embarrassment and worry. Several of these sightholders had gone to great lengths to establish marketing plans to get to the ultimate consumer, only to be found wanting right before the big show in Las Vegas. Great timing!
In the film A Few Good Men, actors Jack Nicholson and Tom Cruise confront each other, with Cruise demanding the truth from Nicholson. Jack replies with the famous dramatic line, “You can’t handle the truth!” In what I thought was an insightful question-and-answer session, one of the nation’s most savvy, successful, and articulate retailers, Ed Bridge, ventured “the truth”: He predicted that in three or four years, few if any of the “brands” would succeed and noted that ultimately it is the jeweler’s responsibility to create a brand at the local level.
It is not in the best interest of retail jewelers to allow brand names to take over what is and has been their domain. It’s the retail jeweler who brings expertise to the diamond counter. That expertise is a combination of people skills and technical competence in talking consumers through the perils of purchasing diamonds and other jewelry products.
According to JA’s survey of jewelry business, nearly half of a jeweler’s revenue comes from diamond jewelry. It follows that the bulk of a jeweler’s gross margin dollars comes from diamonds. Losing control of half of your business does not make good sense.
Strategic planning is a process in which business owners think about their businesses—where they are now and where they want to be in a few years. Too often, the process becomes mired in an accounting exercise, which is more effective as part of the annual budgeting process. Part of strategic planning involves evaluating the strengths and weaknesses within a business as well as the opportunities and threats coming from outside the business. To me, this is the crucial aspect of strategic planning.
The bottom line is that a retail jeweler’s business relies dramatically on diamond products. A jeweler’s image and reputation in his marketplace depends on what he or she does to promote the store’s reputation. Relying on someone else to create a brand image that in effect sublimates your expertise is not a long-term good strategic move.
Ed Bridge got it right when he answered the question on diamond branding by positioning it as the fundamental responsibility of the retailer. What do you think?