For the typical mid-range independent jeweler, merchandise-buying patterns have changed significantly in the last five years. Here are the top seven trends:
Moving upscale and relying on designer lines to lure shoppers. “We can’t get the margins we once did on diamonds,” says Lew Hill, co-owner of Van Scoy Jewelers in Wyomissing, Pa. Hill found a solution in designer bridal lines, which “increased the sophistication” of his bridal jewelry offerings. As a result, profits from engagement sales now come from the mountings.
Van Alexander, owner of Alexander’s Jewelers in Texarkana, Texas, decided in the late ‘s to “go designer.” “My goal four years ago was to get the No. 1 brand in every [jewelry] category,” he recalls. One big advantage of having top designer brands is that they attract a wide range of customers. “The same Yurman piece can appeal to 85-year-old women and 18-year-old women,” notes Alexander.
Of the 54.5% of JCK‘s retail panel who are keeping more inventory (by SKU) in stock now compared with five years ago, 38.5% do so because they’ve added a product category or brand.
Increasing SKUs. One reason for this increase is the move upscale (see #1 above). That’s because designer brands mandate that stores keep basic inventories in stock, says Alexander. He notes that the selection and type of merchandise has “streamlined vendors, and my ‘dead’inventory has shrunk.”
For Hill, the diversity and depth of his current bridal lines has resulted in more SKUs: “We now stock yellow and white gold and platinum,” he says. “Five years ago, bridal used to be 14k yellow or white gold, primarily.”
More than half of JCKs retail panelists (54.5%) say they’re keeping more inventory (by SKU) in stock now than five years ago.
Widening the range of price points. Designer sterling silver, for example, is a new category for numerous jewelers, who carry it to attract impulse buyers and female self-purchasers. Hill’s selection of Artistry Ltd. products recently expanded from karat gold items to silver, and Nomination products—stainless-steel bracelets with 18k gold accents and watches—also have become a “measurable portion” of offerings. Elva Valentine, owner of Valentine’s Jewelers in Dallas, Pa., offers more high-end sterling items now, and she has high hopes for one line in particular, Rosen Block Design.
Limiting the use of memo. Some jewelers rely on memo only for loose diamonds and for goods with a wholesale cost of $2,500 or more. For others like Bambi Knight, owner, Designs By Knight, Park City, Utah, whose retail outlet has downsized in recent years, memo enables her to offer by-appointment-only customers a vast selection and personalized presentations. “Some days I make up displays of mostly pearls, other days with colored gems, and some [days] with diamonds,” Knight says. “I make custom displays for customers.”
Meanwhile, 42.4% of JCK retail panelists say they’re using more memo for high-end goods.
Personalizing buying habits. Valentine, for example, decided to put off buying until she absolutely needs merchandise. “I used to go to the summer jewelry shows and buy categories to last through the holidays, but now I just buy a sampling, and I reorder as needed,” she says. She also uses computer software to help her track best sellers.
JCK retail panel data reinforce these insights. Jewelers who said their buying habits had changed in the past five years cited numerous examples, including asking suppliers for October delivery of merchandise vs. September (40.9%); asking for longer terms (52.5%); buying smaller initial orders and repeating orders only as pieces sell (43.1%); buying fewer basics for stock and relying more heavily on overnight shipping (35.1%); editing merchandise selections more carefully (14.5%); rearranging showcases more often to give appearance of new merchandise (45.7%); and insisting suppliers take back or exchange goods that don’t sell (45.7%).
Working with fewer suppliers. The point of this strategy is better relationships and more favorable terms. Eddie Guerboian, president of Readers Fine Jewelers in Santa Monica, Calif., knows the value of strong supplier friendships and is loyal to his “best six.” Advantages include facility in making exchanges, solving problems, and sending back stale merchandise.
Branding the store. Guerboian custom-makes so many pieces, customers frequently ask for jewelry “made by Eddie.” He also displays less merchandise but makes sure the presentations are never less than stunning. The tactic leaves the desired impression, Guerboian says: “People compliment me all the time, saying how beautiful the displays look.”
Jewelry Manufacturers’ Value of Shipments
|Source: The U.S. Census Bureau’s Annual Survey of Manufacturers; Jewelry, Precious Metal Manufacturers
Editor’s Note: 2002 data were not available at press time