TREASURE TROVES IN TRUNKS
Have you ever wished for a way to double your inventory at no cost? A low-risk option for test-marketing a new line? A promotion that attracts customers without a margin-eating sale?
Trunk shows might be just the answer. Many jewelry and watch manufacturers and designers are willing – even eager – to come to your store for a day or two to exhibit their complete line. All you must do is decide which customers to target, choose a date, arrange for advertising (some suppliers will help) and provide space and sometimes sales support and refreshments.
It can be a win-win-win situation: the supplier gains exposure, the retailer gains a new sales opportunity with little financial investment and customers gain access to a wider choice of merchandise.
Many jewelers recognize the potential. In fact, 41% of those JCK polled in March had held at least one trunk show in the previous 12 months. A quarter of them had hosted two or more. Trunk shows are most popular in the South (accounting for 37% of the total) and the Midwest (30%), followed by the North (18%) and the West (15%).
Jewelers offer many reasons to hold trunk shows. The top two: exposing customers to merchandise not normally carried and creating excitement and interest among customers and salespeople because of the “event” atmosphere (see the accompanying list for reasons).
“Percent-off ads have been so overdone that many consumers don’t pay attention to them,” says Chase Holland of Holland Jewelry Co., San Angelo, Tex. “But a trunk show can be an event, often at a higher profit.” Adds Paul Wilson of Wilson’s Gift & Jewelry, Lewistown, Pa., “Trunk shows offer a chance to show different merchandise I don’t normally stock. And I don’t have to pay for the goods unless they are sold.”
The most popular types of trunk shows involve Christmas, bridal, antique/estate and designer/high fashion events and remounts. Other interesting options mentioned include customer appreciation, pearls, diamond cutting, Russian diamonds, Russian eggs, slide bracelets, tennis bracelets and watches. Atocha trunk shows – related to the discovery of gold bars, coins, jewelry and gemstones in the wreckage of Spanish galleons off the coast of Florida – also are popular (see JCK, November 1994, page 64).
Does all this mean trunk shows are perfect? Several jewelers note problems. “Everyone in retail has trunk shows, so they don’t seem to generate the interest they did in the past,” says Richard Argo of Argo & Lehne in Columbus, Ohio. “We see no real advantages any more and will probably not do them in the future.”
And several jewelers who asked not to be named report unhappy experiences with vendors who disrupted their normal business operations and who were interested in making hit-and-run sales without regard to lasting relationships between customer and retailer or retailer and supplier.
This may be part of the reason trunk shows are not a growing phenomenon. In fact, 84% of the jewelers polled say they held the same number of trunk shows in the past year as the year before. And for every one who held more, there’s another who held fewer. Still, jewelers polled for this report say they’ve made anywhere from $1,000 to $200,000 in sales per day during a trunk show, with advertising expenditures running between $2,000 and $3,000.
The secret is to choose reliable vendors (check with jewelers in other areas who have hosted the vendor) and target the event carefully. In other words, take a sharpshooter ap proach rather than a shot-in-the-dark approach, says Dan Moyer of Moyer Jewelers, a high-end operation in Carmel, Ind. Rather than general newspaper advertising for a trunk show, Moyer encloses designer’s postcards in fold-over invitations and sends them to a select list of customers. “Why have 300 people in your store when you can work with only a few at a time,” he says. “Plan carefully and schedule customers so you can give them individual attention.”
GOLD JEWELRY SALES REACH RECORD HIGH
Gold jewelry sales in the nation’s retail stores grew 5.4% to a record $10.2 billion in 1994, according to a new report by the World Gold Council. Sales were solid throughout the year and showed exceptional muscle in the all-important fourth quarter.
For the first time, the council reported gold jewelry sales by non-store outlets, including TV shopping channels and direct mail. Sales in this category totaled $1.1 billion, bringing total gold jewelry sales to $11.3 billion. Unit sales in this category totaled 11.9 million. The figures represent increases of 5.4% in dollars and 13.3% in units over 1993.
“Gold jewelry’s stellar performance in 1994 confirms gold’s enduring appeal to today’s consumer and demonstrates once again that retailers who invest the additional inventory dollars and retail selling space to gold jewelry are rewarded with increased sales and profits,” says John Calnon of the World Gold Council.
Interestingly, the average price paid for a piece of gold jewelry dropped to $86 after five consecutive years at $88, reflecting the continued growth of the discount store sector and its lower average price.
The survey – which the council says is the most comprehensive ever conducted in the gold jewelry industry – covers more than 95% of the nation’s retail sales of gold jewelry whose primary value is the gold content, including jewelry with accent stones.
World Gold Council, 900 Third Ave., New York, N.Y. 10022; (212) 688-0005, fax (212) 371-5466.
CHANGING ENGAGEMENT RING SHOPPERS
Many of today’s diamond engagement ring shoppers don’t have to be walked through the Four C’s of color, cut, clarity and carat weight, according to a new survey by Jewelers of America.
In fact, 78.9% of the 1,200 engagement ring shoppers surveyed had already heard of the four main criteria for judging a diamond. Many of them learned about the Four C’s from multiple sources. For example, 73.7% had read the JA brochure What You Should Know About Buying a Diamond. Other sources include jewelers (mentioned by 34.8% of the respondents), advertisements (19.3%) and friends (18.5%).
The study also measured changes in the attitudes of men and women when they buy an engagement ring for the second time. Not surprisingly, second-timers have more confidence and more money to spend.
Asked who visited the store, 13% of women who were marrying for the second time said they shopped alone, compared with only 4% of first-timers.
Asked who decided how much to spend, almost 11% of women marrying for the second time said they did, compared with only 2.4% of first-timers.
And asked who actually selected the ring, 30.4% of women marrying for the second time said they did, compared with 16.7% of first-timers.
The accompanying chart shows how much men and women said their engagement rings cost.
Some other interesting statistics from the study:
17.8% of respondents were influenced by De Beers’ two months’ salary spending guideline.
Women largely believed the ring selection was a mutual decision. Thus 53.7% of first-time brides and 57.4% of second-time brides remembered choosing the ring together. Conversely, slightly over 50% of the men surveyed said they picked the ring with no help from their new brides.
Jewelers of America, 1185 Ave. of the Americas, 30th Fl., New York, N.Y. 10036; (212) 768-8777.
THE STORE’S NOT DEAD
Catalog and television shopping receive a tremendous amount of press these days. But store-based retailing will remain the primary vehicle to meet consumers’ needs, according to a new report by Deloitte & Touche, a nationwide business analysis and consulting company.
The new retail formats offer attractive alternatives to consumers and owners, says the report, so store-based retailers cannot become complacent. But their potential to withstand formidable challenges is great and the history of retailing indicates store-based retailing will stand the test, says the report.
New formats in retailing are nothing new, beginning with the development of the supermarket, the department store, the discount retailer and, more recently, warehouse clubs and outlet malls. Some of the newer formats have been able to gain a foothold because of negative forces against store-based retailers, including:
An inability to meet consumers’ expectations for service and a satisfying shopping experience.
Consumer perception of increasing crime in shopping environments. (This ranges from non-aggressive crime such as pickpockets and auto vandalism to violent crime such as rape and murder.)
Cost of stores and staffs. A store-based retailer’s largest operating expenses are the cost of store occupancy (averaging 8.3% of sales) and labor (9.1% of sales). What’s more, this investment doesn’t always pay off. From 1973 to 1993, says the report, retail space per capita has increased from eight to 18 square feet while sales per square foot have dropped from $200 to $130 (in constant 1987 dollars).
Scarcity of premier retail locations.
Diminishing quality of the retail work force. Most store associates are on an hourly wage at the low end of pay scales. The pool of available minimum wage workers is growing, says the report, but the education and skill levels are diminishing. A study conducted by the Educational Testing Service found that more than 20% of people in the work force can’t read a map or fill out a simple form. Increasingly, these are the people being called upon to serve the public in a retail capacity.
The good news: On the positive side, store-based retailing is still the dominant channel of distribution, accounting for more than 85% of all retail purchases, or $2.1 trillion in the U.S., says Deloitte & Touche. Even at historical growth rates, catalog and television shopping would not pose a serious threat for many years.
Further, many of the new retail formats are based in technology, and it takes time for people to absorb new technology into their daily lives.
Traditional retailers have an opportunity to thrive in today’s marketplace, says the report, but they must shift their thinking, especially in these four key areas:
Think of shopping as entertainment and a service provider. This may mean something as simple as adding a coffee bar or providing child care while parents shop.
Stay tuned to technological developments that can help to flatten layers of cumbersome management and free up more talented associates to serve customers.
Select sites carefully. Location, location, location is the key. It’s not worth committing to a long-term lease in a questionable location just to get a price break.
Drive cost structures down obsessively.
TRUNK SHOW ADVANTAGES
1. Expose customers to merchandise not normally carried in the store.
2. Create excitement and interest among customers and salespeople because of the “event” atmosphere.
3. Instant stock at no cost.
4. Test-market new lines.
5. Focused selling allows large volume in a short period. They create an urgency to buy.
Source: JCK Retail Jewelers Panel
KEY RESULTS FROM ’94
Sales in retail stores rose 5.4% to $10.2 billion and 7.6% to 118 million units.
Non-store sales (electronic and direct mail outlets) rose 5.4% to $1.1 billion and 13.3% to 11.9 million units.
Fourth-quarter sales rose 7.2% to $4.5 billion, with December sales alone up 9% in dollars and 12% in units.
Average price of a piece of gold jewelry fell 2.3% to $86.
Dollar sales and unit volume grew in all retail channels.
Neckchains, the largest classification, accounted for 43% of dollar volume and 32% of unit volume.
Source: World Gold Council
WHAT WAS THE COST OF YOUR DIAMOND ENGAGEMENT RING?
|First marriage||Second marriage||Age|
Note: the men in the survey were not necessarily engaged to the women in the survey.
Source: Jewelers of America “Diamond Engagement Ring Survey.”
TOP SELLERS FOR JCK PANELISTS
Rings were the top-sellers in jewelry stores operated by members of the JCK Retail Jewelers Panel in March. And just over half of those rings (56%) were engagement rings; the most-often cited price range for them was $1,000-$2,000.
Other strong sellers were non-bridal diamond rings (ranging from $2,500 to $25,000 retail), loose diamonds, karat gold jewelry (earrings in particular) and gem-set bracelets.