New Frontiers in Jewelry Retailing


Virtual inventories and customer participation in jewelry design are giving retail jewelers new tools to compete in the 21st century.

Matt Lauzon got the idea for Paragon Lake after he watched friends shop for jewelry. "They knew what designs they wanted, but they couldn’t find them," he says.

So the entrepreneurial-minded 23-year-old dreamed up a company that would "revolutionize the jewelry shopping experience" by letting consumers pick a design via computer.

The same idea is behind Counter Sketch, from Stuller, which goes even further in letting customers create ring designs. Chuck Bowman, a company vice president, notes that the program is part of a larger customization trend, which includes things like designing your own sneakers on the Nike site.

Counter Sketch and Paragon Lake hope to bring customization to independent jewelry stores. These programs also give retailers a virtual inventory, similar to the way brass and glass does, at a time when inventory costs are rising (see "Does Brass + Glass = Class?" JCK, October 2009, p. 96).

Although frequently lumped together, they are different programs, with different models. Paragon Lake comes from the high-tech world and has received millions in venture capital funding, similar to a dot-com startup. Member jewelers (at press time there were 42) are outfitted with a touch-screen computer that provides access to the Paragon Lake database of 1,400 designs, supplied by 74 designers. Consumers can browse those designs at the store and later at home, where they can use the tool via the Internet. If they find something they like, they can customize it by changing the metal and stone and order it through the jeweler. The piece is made by a manufacturer working from the designer’s sketches and delivered in a few weeks.

"We want an open platform and are getting more and more designers to join the community and submit designs, so there is ever evolving content," says Lauzon. He foresees jewelers using his program as part of their regular sales pitch. "If somebody walks in the door and the jeweler says, ‘Why don’t we design a piece of jewelry in a couple of minutes,’ it’s really engaging for the consumer."

Counter Sketch is akin to the "design your own engagement ring" pages seen on sites like Blue Nile, although Bowman says it makes those "look like Tinkertoys."

Bowman says the program lets customers not only choose their design (out of more than 100) but also customize elements like the shank and the setting. "This is true customization," he says. "It is literally changing every detail of the geometry of the piece. The customer is participating in the process, grabbing the mouse, making their own adjustments. The chance of any other customer replicating what another customer has done with it is slim. The possibilities are almost infinite."

Once a piece is designed and ordered, fulfillment by Stuller takes eight business days. The software costs $4,300, but Stuller says there will be incentives to defray that. The eventual goal, Bowman says, is "to be a well-rounded virtual jewelry store."

Both companies say that letting the customer participate in the design gives them pride of ownership. "The consumer gets very excited when they find out the piece is being made for them exactly how they wanted," Lauzon observes.

Says Bowman: "There is nothing more powerful to get that customer buy-in than to have them say ‘That is my piece. I made it myself.’"

Questions remain about how programs like these fit into the retail jewelry business. Many jewelers have their own benches, and while they may appreciate virtual inventory, they want to sell their own goods first. "This doesn’t replace the usefulness of the bench jeweler in the back, and it won’t completely replace some of the specialized one-off pieces," Bowman says. "But it is truly going to expand that customization landscape."

The programs also bring up the longstanding question of whether consumers want to see a piece before they buy it. Plenty don’t, as evidenced by booming Internet sales, but people who come into retail stores are, seemingly, a different animal.

"Most of the time, people want to physically touch something," notes Nina Rivera, a sales associate at Stamburgh Jewelers in Defiance, Ohio, a member of Paragon Lake. Still, she does have customers who are interested in the virtual inventory. "Some of the older people don’t tend to look at it," she says. "But it has brought in some younger consumers, particularly from the Web site. Sometimes the customer is saying one thing, and I am envisioning something else. So that’s when we go to the computer and try to find it."

Andy Koehn, of Koehn and Koehn Jewelers, in West Bend, Ind., says he treats his Paragon Lake terminal like any other product he has in his store. "Of course you want to sell out of the case," he says. "But it’s still customers first. We have to do what they want. It’s helpful when someone comes in looking for that brand. We may not have that brand, but it’s a nice way to talk about what features of it they like. They may be looking for something a little more distinct."

He recalls a recent sale that illustrates the program’s appeal: "On Saturday, some parents brought their 13-year-old daughter in to buy a birthday present," he says. "So they picked out a ring on Paragon Lake. We just sat her down and let her play with it. Part of the beauty of it is they invest themselves in the process, and I find that very valuable. And we can send them home with it as well. That is a lot less threatening to a consumer."

A standard concern for independent jewelers is that letting consumers design pieces sight unseen on a computer will eventually cut them out of the process. But Lauzon says "a founding principle" for his company is keeping the independent jeweler involved. And Bowman notes, "That is a question that comes up often, and our response is [selling direct] is not [Stuller’s] business. To an unprecedented degree we have partnered with the independents. That’s where we have always been and where we want to be in the future."

Another fear is that consumers will be overwhelmed by all the choices these programs offer. Lauzon says his company is working on a feature that will narrow down options based on individual users and emerging trends.

David Geller, publisher of Geller’s Blue Book, thinks custom design programs could be a powerful tool for jewelers who aren’t confident about their design skills.

"For a lot of stores that haven’t been doing custom, they can bypass their learning curve for CAD/CAM and go straight to the Stuller program," he says. "It’s going to make things a lot easier."