“Just as all politics is local, so, too, all brands—whether restaurants, merchandise, or jewelry stores—are locally driven.”
So says Virginia Beach, Va., jeweler David Nygaard. Like many jewelers, Nygaard uses “private label” products—made by or for the jeweler; bearing the store name, logo, or trademark; and available only at that store—to successfully brand his store name in the minds of customers.
“Our [store] brand is our face in the market, the one we want people to know. So, we try to do as much as we can to support it with our private labels, blending them with the store’s strategic interests and advertising.”
“Private label is significant, because we’re putting our name on something setting us apart from other vendors,” says St. Louis, Mo., jeweler Michael George, who has sold his own branded products since the late 1980s. “It enables consumers to look at us with a different eye, to see we don’t have the same things everyone else has.”
Self-branding is something major retailers have done for generations. What are “Cartier” or “Tiffany,” after all, but labels of jewelry stores successfully impressed on the public consciousness through their products and marketing? More recently, regional jewelry chains have set themselves apart with proprietary lines, diamond cuts, and products. Now, more independents are seeing the wisdom—and profit—in it, too. A new JCK national survey of almost 200 jewelers finds two out of five (44%) have their own private-label products. Almost half (46%) say their private-label sales have risen since 2001, and three out of five (61%)—citing current sales and consumer interest—expect them to keep growing.
An expanding market. Many jewelers are doing less with other jewelry and watch brands and replacing them with their own. Brinsmaids, in New Caanan, Conn., for example, is “decreasing branded jewelry in favor of our own brand, which will evolve to become a much larger segment,” says owner Scott Cusson.
Others are adding private-label products or plan to do so soon. In Oakland, Calif., for example, Pavé Fine Jewelry is “definitely working on a line” with its name, based on its best-selling custom designs, says general manager Sonja Stickel. “It’s more cost effective to streamline the process a bit—we already have the molds and documentation—and offer better price points.”
In Oklahoma City, Okla., Arthur Gordon is expanding his award-winning trademarked jewelry (50% of his business, with seven to 10 new models a month) into men’s wedding bands. “We’ve focused more [on private label] in recent years to set our store apart, because there are a lot of jewelers here named ‘Gordon,’ ” he says. He also plans to focus more advertising on his own designs and is developing packaging for them.
Exclusively yours. Private-label merchandise can enhance a store’s brand in several ways, say jewelers, starting with exclusivity. Private-label wares, by definition, are proprietary to their businesses, and that’s a significant competitive advantage. As jeweler Sandi Dahlquist, Poulsbo, Wash., noted, “Other stores don’t have it, and it can’t be price-shopped.”
That brings in customers, both regular and new. Elizabeth Parker, Curt Parker Jeweler, St. Louis, says, “Our CAPI jewelry features signature pieces you can only get at our store. People who see it on friends and want it have to come here for it.”
And consumers definitely are looking for “things different, not generic,” says Arthur Gordon. “They see the same things everywhere, because more jewelry manufacturers sell the same designs under different names to guild stores, major chains, and mass marketers—and in the process, water down the designs.
“So, we prefer to have things unique to us that focus on our customers’ tastes and be associated in their minds with beautiful custom designs they can’t get elsewhere.”
Private labels’ exclusivity also helps watch retailing. “The Internet, especially, is devastating” to jewelers selling brand-name watches, says Alan Grunwald, president of Belair Time. “It’s made it so easy for consumers to price shop. Someone goes to a jeweler to learn everything about a $450 brand-name watch, then checks it out on the Internet and buys it for less somewhere else, costing the jeweler that customer.”
Private-label watches, though, can’t be price-shopped—which protects the jeweler’s margin—and their quality is comparable to brands in the same category. Grunwald even suggests that jewelers “give customers a choice. Tell them, ‘Here’s Brand X and here’s our brand, whose quality is so good that we put our name on it.”
Images and gaps. Private-label items also build or reinforce the local prestige of a jewelry store, say jewelers. That’s one reason more stores are promoting their own fine diamonds—such as Myers & Pugh Diamonds, Newark, Ohio, which may inscribe its name on the girdle of each stone; Ben David Diamonds, Danville, Va.; or Goodman Diamonds, Madison, Wis. “We’re a 70-year-old store with a strong reputation for quality, so a ‘Goodman Diamond’ has meaning for our customers,” says a Goodman spokesman.
“It’s part of the image,” says Roger Marks, Rogers Jewelers, Modesto, Calif. The store promotes itself as “Rogers – The Ideal Diamond Store” on mailers, marketing, packaging, even staff shirts. “It tells the public, ‘We carry better jewelry, with top-of-the-line diamonds.’ “
Having one’s own non-comparable jewelry “gives your store a mystique,” enhancing market recognition and client loyalty, notes Beth Neufield-Shutt, of Neufeld’s Glendora Promenade, Glendora, Calif. Private-label watches do that, too. “It’s more effective to put our name on the dial and promote us, than promote someone else’s brand,” says Mike Myers of his store’s 14k watch line. Belair’s Grunwald concurs. “How many times a day does someone look at his watch?” he asks. “If your [store] name is on it, think how often the wearer sees it. And when it’s time for that person to buy jewelry, who’ll they think of? It’s incredibly subliminal [marketing]!”
Many jewelers also add private items when there’s “a need no major manufacturer fills at affordable prices,” notes Elizabeth Parker. “That’s why we began making channel-set wedding bands years ago. Now, we’re known for them. That’s true, too, of almost all our pearl earrings and bracelets, with string designs and clasps original to us.”
Jeweler Bruce Gumer, Louisville, Ky., would agree. A decade ago, he wanted to “fill a void in the mid-price market for people who want a gold watch.” He sought a brand with mint-quality 14k watches, but, to reduce competition, it had to be relatively unknown in Kentucky. He couldn’t find one. Now, a Northeast firm makes his strong-selling Gumer & Co. watches (with 10-year warranty).
Money and quality. For many jewelers, private labels not only promote their stores but also boost profits. One in five tell JCK that 20% to 30% of their annual revenues come from private-label wares, while one in four attributes 50% or more of their business to it. David Nygaard estimates that private-label items have increased his gross annual margin by 30%. Bruce Gumer says, “We probably have 20 new people a month come in who’ve heard about our jewelry from friends or asked someone about their Gumer watch. Our reputation for private-label rings, watches, and custom jewelry probably adds 7% to 10% to business annually.”
Private-label merchandise also helps jewelers address quality issues. “Many people are looking for [quality in jewelry] and not finding it, because many jewelry makers now use mass-production methods or have items made overseas, and the quality control isn’t there,” says Arthur Gordon.
With private label wares, jewelers have “more control, from quality to our ability to better service what we sell, particularly watches,” agrees Nygaard.
Many jewelers say the attention they give private-label products ensures that customers get more value for their money—and keep coming back. “We don’t use cheap materials in our jewelry,” says Elisabeth Parker. “But when someone spends $1,000 on our CAPI [“Curt A. Parker Inc.”] jewelry, they get a better value” than comparatively priced brand jewelry. “We eliminate intermediaries [whose costs push up prices]. We’re the original maker and seller.”
“In my business, I try to live by the Golden Rule,” says jeweler Michael George. “I want people to feel comfortable in my store, to know they’ll find good value, integrity, and something different. And that’s why we’re constantly developing our private-label branding.”
Increased sales vs. decreased sales of private-label items
|Source: JCK October 2003 Retail Panel|
|Percentage of Jewelers Responding to Survey|
|Change during last two years||46%||2%||52%|
|Expected change in year ahead||61%||1%||38%|