The Barbell Principle
I really enjoyed Jennifer Heebner’s “Soft in the Middle” article in April’s JCK magazine. We have seen the growth in a number of industries start to resemble a barbell, with the jewelry sector appearing to follow the rule rather than create the exception.
Even as you look at the larger mass-market retailers—Sterling and Zale—they are putting their resources into high-end and value. It’s interesting to see that Zale is getting more of its growth from Bailey Banks & Biddle and Zale Outlet, while Sterling has clearly found a winning concept with Jared’s Galleria.
I think the suppliers are feeling this crunch as well, with more demand and shelf space dedicated to recognized up-market brands at one end, and $99 diamond key items at the other.
I hope you expand on this theme in a future article.
Joe Oliver, Davenport LLC, Richmond, Va.
All Things to All People?
Thanks for a well-researched and timely article (“Soft in the Middle,” JCK , April 2004). I hope that every independent jeweler in the country reads, and then acts on, the information in this article—wishful thinking on my part, no doubt.
In our view here, one of the biggest obstacles facing the market for luxury goods is that the retailers themselves in many cases are having an identity crisis. They are trying to be all things to all people and place too much emphasis on the “value shopper.”
The battle for a price advantage is a foregone conclusion; the mass merchants and discounters will win, end of story. If anyone is doubting this, look back at the retail marketplace for office supplies, consumer electronics, books, music, etc.
One also has to factor in that Wal-Mart and Costco haven’t even hit their stride yet in the jewelry market. They are still in a “learning mode” while selling in excess of $100 million annually in jewelry, and growing at high double-digit rates.
Jewelers must identify areas of their businesses where they can have true competitive advantages in the marketplace, which actually mean something to the consumer.
In visiting upwards of 40 jewelers per month, I have found the success formula for the independents is to have a high-end or luxury “feel” that is pervasive throughout the organization: location, décor, brands, staffing, service, cleanliness—the list goes on.
If jewelers need some guidance in this area, spending a day in any Louis Vuitton, Gucci, or Prada store can be an enlightening experience.
Paul Hill, Director of Business Development, Wolf Designs Malibu, Calif.