Fashionably Late

An old acquaintance once said to me, “There are three sides to every story: his, hers, and what really happened.”

Nowhere is this more evident than in the jewelry industry in recent years. In the exuberant boom years of the late 1990s, it seemed as if sales had nowhere to go but up. Everyone said it couldn’t last, but did anyone really believe it wouldn’t?

When the boom finally went bust in the fourth quarter of 2000, the reverberations went all the way up the pipeline. For the next few years, interviews at jewelry tradeshows brought a repeated lament from suppliers: “Nobody’s buying. They’re all just filling in.”

Retailers, however, told a different story. They all swore they were still buying, albeit more carefully and more selectively. Obviously, it’s all a matter of perspective, but one thing was certain: Things were definitely different.

And, from the looks of this month’s special report about the state of buying and selling today, things are going to stay different for a long time to come. Retailers have learned that they can live with less inventory and that they can buy more of what they need when they need it. Not always, of course, but many are willing to risk not being able to get a particular piece at the last minute for the sake of having more cash flow throughout the season. Suppliers don’t want to be over-inventoried, either—nor do they want to tie up cash for stones and metal they may not use—but that means they may not be able to fulfill last-minute holiday demand. It’s a real Catch-22, but the successful ones are finding ways to strike a balance—and making it work.

What’s happening in the jewelry industry isn’t unusual. Viewing the industry in a larger context, as a segment of the fashion and/or retail industries, we’re actually rather late in adopting a “just-in-time” buying mentality. This isn’t a criticism, just a natural result of how our industry is structured—i.e., it’s one of the few retail categories where independently owned stores still outnumber big chain stores (in terms of individual firms, not individual doors).

Many other retail categories—electronics, food, textiles, toys, hardware, office supplies—have seen their independent retailers dwindle to a small percentage of the market and also have seen chain stores consolidate until only a few behemoths dominate. The apparel market, while less consolidated, still has relatively few independent shops compared with chain, department, and specialty stores. Big stores generally have highly sophisticated methods of tracking inventory and sales almost to the minute, and with a nationwide database they can also see when a trend is starting to peak. That, coupled with the ability to leverage their immense buying power, means they can wangle many more concessions from suppliers, including just-in-time ordering.

Without question, buying has grown more conservative, at least in terms of quantity. But at the same time, JCK research noted a significantly increased willingness—particularly on the part of independents—to experiment with new designs and new looks and add new lines to their merchandise mixes. This is critical, because it encourages manufacturers to continually turn out fresh and interesting new designs, and it keeps consumers coming back. Being late to the just-in-time brigade also means we can learn from others’ mistakes and avoid the trap of sameness that has wrought so much havoc in other retail categories. Of course, it’s not necessarily wise to wait till the last minute for everything, but there definitely are times when it pays to be fashionably late.

hschupak@reedbusiness.com