Past, Present, Future

I’ve been thinking about the “past, present and future”—not the Diamond Trading Company ad campaign but the state of jewelry retailing. A recent trip to jewelers across the country got me thinking about how much—and how little—retail has changed.

The mall business has largely consolidated and often suffers from overly conservative formatting driven by bottom-line thinking. With the exception of a handful of luxury malls around the country, mall retailing does connote certain demographics that force retailers to merchandise in similar ways. The lack of variety has driven some to open freestanding locations that significantly broaden their merchandising options. Still, if you want to see people excited by innovative products in a mall, go to an electronics store, not a jewelry store.

My visits were to independents, however, and I thought about the old perception some people have that independents were going to get killed by the mall operations. Some have, maybe many of them. But I’m not sure I agree with one retailer who told me it’s going to get very tough for independents to survive if they don’t generate a couple of million a year in sales. That might be true in the biggest and most expensive markets. But in many markets, a volume half that large could work well. (Let me hear your opinions about the issue, and we’ll devote a column to it.)

Some independents have adapted very well, and, in different ways, have put distance between themselves and the mall chains. Wherever we look, there is evidence of opportunity, success, and courage. Here are some instances that retailers should recognize as emblematic of their position in our world—some who lean on the past, some who have arrived, and some who are thinking ahead.

Past. A third-generation retailer located in a downtown area has not changed anything in the store in 50 years. The glass tops of the showcases are so scratched, it’s like looking through a fog. The walls are dingy, the lighting is poor, and the carpeting stained. On the plus side, the owners know a lot about merchandise—the selection is excellent. Also, the area is undergoing a major revival, with rebuilt streets and high-rise condos going up. The owners sense they are losing the market—what younger customers would want to enter this relic? But will they have the courage to spend some real money and join the 21st century?

Present. There’s a beautiful store in an affluent neighborhood, one that has risen quickly in the last 15 years. The owners started with nothing in a rural area, developed a few stores in several neighboring towns, then sold everything and started again in this location. They sensed the coming boom in luxury. They steadily upgraded their merchandise and now show expensive pieces and make six-figure sales. When their lease is up in a few years, they will look to cash out.

Future. A young couple, both G.G.s, run a friendly business from a freestanding highway location in a good area. The decor is inviting. They offer coffee at the door and have a play area and TV in one corner. They started in a strip mall, worked long, hard hours for a number of years, and then moved when they had the money. Now they show some branded goods and a willingness to try new concepts. They admit they need support from their vendors, but not excessively so. They are confident of their future and happy with what they’re doing.

Does any of this sound familiar? None of these jewelers mentioned mall stores as competition. None felt their days as independents were over. The future is still there for those who want it. Ben Janowski has spent more than 34 years in the diamond and jewelry industry. For the last 14 years he has been a business consultant focusing on strategic planning for the U.S. market.