Every June, this column looks at the significant events of the previous year. June, because it’s The JCK Show ~ Las Vegas issue and the issue in which I took the reins as editor-in-chief five years ago.
It seems like yesterday, but in terms of issues it’s a long time. Totaling our titles, the JCK Publishing Group has produced more than 100 periodicals and 250 editions of our eMonday electronic newsletter—and that’s not counting our special supplements, show guides, the Jewelers’ Directory, and other products.
Meanwhile, the industry has grappled with conflict diamonds, synthetic diamonds, HPHT treatments, beryllium-diffusion treatments, development of diamond cut grades, major changes at De Beers, ups and downs of the economy, war, terrorism, SARS, and much more. We’ve lost some great pillars of our industry, and recognized the contributions of others. We laughed with friends, we cried on 9/11, we raised millions of dollars for sick children and tsunami victims, and through it all we continued to get up every day and run our businesses.
Five years is a natural time to reflect, but since most of those issues have no significant new developments, I’d rather look ahead this year than back. What can we anticipate for the next half decade?
There are some subtle but critical shifts in the business landscape. I believe these are the changes that will have the greatest long-term impact on our industry, not whether De Beers cuts more sightholders.
The first of these is women power. Women who would buy fine jewelry for themselves as a fashion item are the single biggest opportunity this industry has for significant and sustained growth, but thus far as a whole, we haven’t focused our efforts on this customer nearly enough. The shopping experience—unfortunately made so by the need for security—is intimidating, the selection of fashion-forward jewelry in the range of an impulse buy (under $1,000) remains limited, and the sales approach many trainers still tout can make women cringe. The woman who drops $600 on designer shoes or a handbag is a prime customer to buy jewelry for herself, except there’s not much designer jewelry in that price range. Sure, she can afford to spend a lot more, but the impulse of a $600 purchase—and the frequency of that impulse—are much different from the thought that goes into a $6,000 or even a $3,000 purchase.
The second is increasing consumer sophistication and desire for luxury goods, aided by the proliferation of educating shopping magazines like InStyle and Lucky and stores like Pottery Barn and Banana Republic that offer good design at accessible prices. The proverbial bar is constantly rising, and “good enough” just isn’t any more. Luxury is relative, of course—not everyone can afford an S-Class Mercedes—but consumers make tradeoffs at all price points, scrimping on some things to splurge on the luxuries they value. This industry needs to make a full-court press to ensure that jewelry is on the list of must-have items.
There is much talk about the Millennial generation’s coming of age and their immense purchasing power. This is true, and they are an extremely sophisticated, brand-aware, shopping-oriented, design-savvy group. But right now, their oldest are just hitting marriageable age. So while the bridal market should be robust for at least a decade, focusing on the fashion customer is a better bet for strategic growth. Besides, half the Millennials are female. And don’t forget these kids grew up on computers. The Internet isn’t going away. Get used to it, get over it, and get a good Web site.
A third change is the polarization of the marketplace, increasingly divided between the desire for the best and the cheapest. This isn’t news, but too many jewelers still sell based on price first. If this is you, I daresay you might not be reading this column in five years, because Wal-Mart will beat you at that game every time. That’s not to say that upscale shoppers don’t revel in a bargain (as Costco knows), but if your first move is always an offer to shave a few bucks off the price, it was wrong in the first place.
That brings me to trust. Unfortunately, our industry’s overall image ranks somewhere around that of car dealers and lawyers, and the immediate willingness to discount product not only makes the customer suspicious but also cheapens the product and makes it less desirable. Like any corporate culture, this starts at the top. If the manufacturer is hondling the diamond dealer and the retailer is hondling the supplier (and neither pays for a year), how can one expect the practice to just stop at the counter?
At this juncture, our industry has a great opportunity to either grow significantly or stagnate. I sincerely hope that come June 2010, I can sit down and write a column that details the great progress made in these five years.