Destination: Your Store?

Fine jewelry and leisure travel are competitors in the quest for consumers’ disposable income, and travel has the edge. If given an extra $10,000 of discretionary income, most consumers say they’d rather take a vacation than buy jewelry, according to NFO Plog Research of New Brunswick, N.J.

But recent events may be changing the score. Last year the travel industry lost $43 billion—a figure roughly equivalent to the jewelry industry’s total yearly revenues—and the Washington, D.C.-based Travel Industry Association of America expects it to lose another $27 billion in 2002. “This could be a great opportunity for jewelers,” says jewelry analyst Ken Gassman of Davenport & Co., Richmond, Va.

Shoppers are seeking more meaningful gifts, including jewelry, which ranked high as a gift item for holiday season 2001, according to a consumer survey conducted by Britt Beemer, president of America’s Research Group in Charleston, S.C. Jewelry was cited as a likely gift by 22% of respondents, compared with 16% who mentioned it last year. Jewelry ranked fourth as a likely gift item in 2001 vs. seventh the previous year.

Understanding the consumer shopping trends that emerged after Sept. 11, 2001, can help you sell jewelry—with appropriate sensitivity—to those with vacation money to spend. Marketing and sales experts explain how:

  • Promote your “made in America” merchandise. More than half of consumers surveyed by Beemer prior to the recent holiday season said they’d look for products made in the United States. Flag jewelry is just one example of products being made to appeal to shoppers’ reawakened patriotism.

  • Get involved in community events. People care about the reputation of store proprietors. After Sept. 11, 49% of Americans gave money, clothing, or other items to charity, and 24% donated or tried to donate blood, according The National Organization for Research at the University of Chicago, a group that has been studying public reactions to major tragedies for the past 40 years.

Many jewelers also donated to relief efforts, but geography may have determined whether such charity aided sales. “For those living in the hinterlands, donations didn’t appear to be a factor [in sales],” Gassman says. Still, sharing a portion of sales with charities, or turning your store into a repository for donations allows everyone to make a difference, says Beemer.

  • Call attention to handcrafted items through signage. “People are less interested in mass-produced goods,” says Beemer.

  • Offer value to customers through two-for-one deals or by slightly reducing prices. “Now is the time to offer more indulgent value for a lower price,” says Pam Danziger, president, Unity Marketing, Stevens, Pa. “Group [jewelry] suites together or offer a good selection of mid-range-priced items for $500 and under,” she says. Her research shows that very expensive items may induce stress, “but a woman can buy a $100 piece of jewelry and not feel guilty.” Other analysts understand the current consumer-driven trend toward value: “Even Kmart had a special on jewelry during Thanksgiving week,” notes Ulysses Yannas, retail analyst with Buckman, Buckman & Reid, New York.
    But don’t discount deeply, advises Gassman. “Past a certain point, price discounting doesn’t work and can reduce a jeweler’s credibility.”

  • Conducing business as usual will encourage consumers to do likewise.Run sales, host special events for regular customers, and advertise your good deals, advise industry analysts. Abe Sherman, chief executive officer, Buyers International Group, Ringoes, N.J., says a number of his clients held successful sales in early October 2001. During one trip to a local mall, Sherman saw firsthand his own community’s resilience: “I couldn’t find a parking space on a Thursday night.”

  • Don’t skimp on window decorations. According to Beemer’s research, in the days following Sept. 11, people were driving 20% less often and taking shorter trips—14 minutes vs. 18 minutes. Beefing up displays should benefit local businesses in small- to mid-size communities, Beemer says.

  • Tell consumers the meaning behind the jewelry. “There seems to be more of an acute awareness on the part of shoppers to know the meaning of the jewelry they buy,” says A.J. Sales, chief operating officer, KWHS Retail Marketing Services, Paducah, Ky. “People want to deliver the appropriate message to recipients.”

  • Keep a good selection of diamond rings in stock. Anecdotal reports of the number of post-terrorist-attack marriages continue to circulate. Increases have been reported in New York City and on military bases prior to troop deployments. Even some Internet-based companies report an upsurge in weddings. Online wedding planner Theknot.com has enjoyed a 10% jump in membership since Sept. 11 and reports greater interest in the proposal information available on its site.

Sociologist Stephanie Coontz at Evergreen State College in Washington recently told Newsweek that a boom in weddings doesn’t surprise her. But if current events follow the pattern of World War II, a short-term rise in weddings and drop in divorces will be followed by a spike in divorce rates when some of the hasty “war” marriages don’t work out.

  • Sell quality heirloom jewelry.Numerous nationwide studies, including one from Unity, show that “consumers are retreating to their homes.” Retail analysts, including Dorothy Lakner, with CIBC Oppenheimer, N.Y., recognize this “cocooning” effect among consumers. “Consumers are returning to basics, including family values,” says Gassman. Basics also include comfort foods and comfortable furniture, according to the Newsweek report. For jewelers, an opportunity may exist in marketing family jewelry, Gassman says.

Lakner, whose biggest industry client is Tiffany, agrees that jewelry could gain some dollars previously earmarked for travel because of the appreciation of family. And, Lakner adds, what says ‘You’re important’ better than a gift of fine jewelry?