The JCK 2010 It List



Jewelers are doing more custom design work, and the trend will continue. Many factors are contributing, especially volatility in precious metal and diamond prices. Custom work is also a way to appeal to younger generations of jewelry customers who want to be involved in the jewelry-making process. “Younger generations are not only asking for it, they’re demanding it,” says Bob Disinger, of Disinger Jewelers of Jasper, in Jasper, Ind.
What this means for jewelers With competition getting fiercer for a shrinking pool of luxury dollars, jewelers need a niche, which custom work can provide. It also allows jewelers to better control certain portions of their inventory by ordering only materials that they need when they need it.


With so many jewelers buying gold, are other jewelry materials—particularly diamonds—next? On the surface, it doesn’t make much sense, as diamond prices have not appreciated the way gold has, at least in polished. Nor are they likely to, with production tightly controlled and demand anemic. Also, no set price list exists, although the proliferation of online trading networks offers hints (see Investment Diamonds, p. 131). Even so, it didn’t escape notice when an online gold buyer, Cash for Gold USA, launched Cash for Diamonds.
What this means for jewelers Over the last few years, many jewelers have become skilled and savvy about buying diamonds off the street. If you’re not, it’s time to do some homework. Consider the impact if all the diamonds consumers are squirreling away come onto the market.


Luxury goods makers LVMH and Tiffany (which has a coral conservation campaign, including window displays at its flagship store this year) and a multitude of independent jewelers including Saettele Jewelers, St. Louis, and Comfort & Son Jewelers, Vestal, N.Y., are boosting efforts to help protect the environment and provide aid to charities.
What this means for jewelers Hosting sales and promotions that support a charitable cause can boost consumer awareness and sales. Research shows that younger and more-affluent consumers care about corporate social responsibility.


At press time, spot gold prices hovered around $1,170 per ounce. How much higher that number goes in 2010 depends on market scenarios that make the case for or against investing in gold as a hedge against inflation. A forecast of slow to modest growth will reduce inflationary worries, and price averages will soften, perhaps by around 10 to 15 percent. A scenario of economic growth that spurs inflation on a global level will stimulate gold investment and boost per-ounce prices to $1,200 or $1,300 or higher.
What this means for jewelers Recent World Gold Council research concluded that gold fits into U.S. consumers’ spending behavior because Americans still believe gold has “intrinsic and enduring values,” according to John Calnon, managing director of WGC US. The organization also concluded that consumers are more likely to save up to purchase gold for self purchases or gifts. Consumers in this group have a spending threshold ranging from $500 to $2,000 and are willing to purchase “interesting and new designs that are long lasting and durable,” says Calnon.


We’re hearing about this topic again. In one week, articles on the subject appeared in the Financial Times and Wall Street Journal. Even De Beers, during the worst of the recession, discussed marketing diamonds to investors as a way to boost its anemic sales. This makes many in the industry cringe, particularly those with memories of the 1970s investment boom and bust. The major argument against investment diamonds is that there is no agreed-upon set price marker for measuring prices. However, the World Federation of Diamond Bourses recently endorsed a manufacturers suggested retail price list devised by Idex, and a handful of funds are now devoted to diamonds. With demand for diamonds likely to trump supply in the long term, many see diamond investing as a potential opportunity.
What this means for jewelers There’s no way to know if this will take off or what will happen if it does, but there’s potential for upward pressure on diamond prices. Jewelers need to stay abreast of prices by regularly checking sources like Rapaport and Idex.


President Obama first proposed repeal of the LIFO (last-in, first out) accounting method in his budget last spring, and then looked at it as a way to finance health care reform. Both those attempts failed, but Jewelers of America warns that LIFO repeal remains very much alive and is urging jewelers who use the method to protest repeal proposals.
What this means for jewelers JA argues that LIFO repeal could be fatal to the retailers who use it to maximize after-tax cash flow and as a way to protect themselves against rising costs of commodities like gold. Jewelers can speak out at JA’s Legislative Alert page at


Cutbacks in company bonuses have made a huge impact on the discretionary income of households with annual incomes of $100,000–$249,900. According to recent survey data from Unity Marketing, a luxury market research firm, this demographic has “dropped throughout most of 2009, with a drop of 10 percentage points from the second quarter to the third in 2009.” Unity Marketing owner Pam Danziger called this “a noticeable drop off the luxury market.” Even consumers with $250,000-plus household income are spending less.
What this means for jewelers As luxury is redefined and new brands emerge, the competition for consumer luxury dollars will become fiercer. Jewelers need to increase their online presence as part of the consumer research effort, part of which includes explaining the value proposition for jewelry.


The number of fine jewelers on Facebook and Twitter continues to rise, and anecdotal research reveals that more are stepping up ad dollars online or using social media in lieu of traditional advertising vehicles.
What this means for jewelers Social media marketing offers free or low-cost and immediate access to thousands of consumers interested in jewelers’ product. Savvy retailers are taking advantage of this access, developing in-store events, promotions, and messages that resonate quickly with fans and followers and attract new ones, particularly younger consumers.


The Patriot Act, passed by Congress in the days after the terrorist attacks of Sept. 11, 2001, affects jewelers, who are seen as potential targets for money launderers. Jewelers who buy or sell more than $50,000 in jewelry in a year—and, with gold buying so hot, that list is growing—must have an anti-money-laundering plan in place.
What this means for jewelers The IRS plans to step up enforcement, so jewelers must establish their AML plans now. Luckily, compliance isn’t difficult. For help, visit the Jewelers Vigilance Committee’s Web site at and click on the Anti-Money-Laundering link at the top of the home page.