| Over the last 10 years there are so many things | | | | selection as the chains. Without careful planning |
| that have changed in the jewelry business, some | | | | and adjustments in their business model |
| of them for the good of the industry and others | | | | independently owned stores could border |
| to its detriment. The internet has accelerated the | | | | extinction. There are some that would strongly |
| transference of information and made products | | | | disagree with this outlook and think that it would |
| readily available. National chain stores have | | | | be impossible for it to happen. |
| changed their business models to become more | | | | To that I ask one question..."When was the last |
| aggressive and today's consumers have altered | | | | time you purchased home improvement items |
| their buying habits accordingly. Industry veterans | | | | from a mom and pop hardware store?" Or |
| suggest that 10,000 privately held stores could | | | | "When was the last time you purchased |
| close over the next 7-10 years. | | | | electronics from a mom and pop electronics |
| Simply put, the jewelry business isn't the same as | | | | store?" These stores existed until the |
| it was 10 years ago and independently owned | | | | consolidation of their industries occurred. It simply |
| jewelry store owners need to respond quickly. | | | | took longer to happen in the jewelry business, but |
| With this article, I hope to offer advice on how to | | | | I assure you that it will continue to happen. The |
| overcome the many challenges that independents | | | | future for independents seems bleak but there |
| will encounter. | | | | are things that can be done to assure their |
| Today's consumers can be categorized as value | | | | healthy existence in the industry. |
| or experience driven. The value driven consumer | | | | Taking back market share is going to be a very |
| rarely cares about the image of the store, the | | | | important part of the process and this should |
| brand name of the products, or the service after | | | | start with the internet. Most independents have |
| the sale. He/she is concerned about one thing and | | | | done nothing to create a presence on the |
| one thing only and that is "the lowest price | | | | internet; I'm amazed to hear that some jewelers |
| possible". The internet is best equipped for this | | | | don't even have a website. I think this is largely |
| type of customer and has done a great job of | | | | due to their reluctance to embrace a business |
| servicing them. The attraction for potential | | | | practice that has taken so much from them. |
| internet consumers may be the value and the | | | | An example of a well-done internet jewelry |
| anonymity of comparing products and prices | | | | website is design your engagement ring |
| without human interaction. | | | | The internet retailers have grown quickly because |
| Some people have told me that they feel | | | | they haven't been challenged, it's time for the |
| obligated to purchase after spending time with | | | | independents to step up and create a much more |
| salespeople at brick and mortar stores, this adds | | | | competitive environment for internet retailers. The |
| undue pressure to make a quick decision. Spend | | | | area most needing improvement is the sale of |
| thrifty consumers can also be methodical decision | | | | online diamonds and engagement rings. Margins of |
| makers and require time to feel good about their | | | | course, have dropped considerably on loose |
| decisions; the internet offers this while brick and | | | | diamonds because of the availability of |
| mortar stores do not. Generally speaking, a retail | | | | aggressively priced goods. |
| store's operating expenses represent a high | | | | Independents have a real problem accepting the |
| percentage of their overall revenues. They simply | | | | notation of selling diamonds for much less than |
| have to sell their diamond and jewelry for more - | | | | they have in the past. In order to succeed, they'll |
| competing with internet retailers on price and | | | | need to understand that diamonds can be sold for |
| shopping leisure becomes a difficult task. | | | | more in a store and less online. Why not do |
| So in turn, independently owned stores have lost | | | | business with both types of customers and take |
| market share every year for the last 9 years. In | | | | back some of the market share previously lost to |
| fact, the retail independents have shown only | | | | competitors. Putting together an effective website |
| modest growth of 2%-5% per year while | | | | involves more than listing jewelry on web pages. |
| internet retailers have grown 25%. | | | | Content is very important as well as search |
| The experience driven consumer is largely | | | | engine optimization, I recommend hiring an SEO |
| concerned about selection, convenience, brand | | | | specialist before hiring web programmers. They'll |
| image, availability, and service. Recognizing this are | | | | give valuable insight on how to create a |
| the national superstore chains, including Jared | | | | successful website. |
| Jewelers, Helzberg, Bailey Banks & Biddle, and | | | | Dealing with the superstores takes a different |
| others like them. These companies are building | | | | approach and a lot of courage. Most independents |
| bigger and better stores with millions of dollars in | | | | will never have the funds needed to compete on |
| inventory bursting out of the showcases. Every | | | | the same level as the superstores. That's not to |
| possible jewelry choice is available and their | | | | say that they can't hold their own and carve out |
| customers don't have to shop anywhere else. | | | | a good living. It will require choosing a jewelry |
| In addition, they are placing a greater emphasis on | | | | category that is possible to dominate or own a |
| training their employees than they have in the | | | | large piece of. Dealing with the chain store |
| past. The days of receiving second rate advice | | | | advertising budgets, inventory, prime locations, |
| and service at national chain stores are becoming | | | | and trying to be all things to all customers will be |
| a thing of the past. This is something that | | | | next to impossible. I think the store owners that'll |
| independent retailers have always hung their hats | | | | be successful will leverage their passion and |
| on: they can no longer say that you'll only get | | | | strengths in certain product categories and |
| great service at privately owned stores. All of this | | | | attempt to own that market. |
| is made possible by an aggressive plan to take | | | | I've owned a retail jewelry store for 13 years and |
| over a market previously controlled by mom and | | | | witnessed the deterioration of the market for |
| pop stores, and then investing in that plan. The | | | | privately held stores. I'm also experiencing |
| independent jewelry store can't offer the same | | | | first-hand the problems faced by my |
| size product selection because they don't have | | | | counterparts and vacillated over the proper |
| the finances. The chain stores have better real | | | | course of action. I've decided to stay true to my |
| estate, better product selection, and more money | | | | passion and continued to promote my bridal and |
| for advertising. | | | | diamond business. I know in the end that it'll be |
| You could say that the internet retailers have | | | | the right decision because I have a good chance |
| opened the door for the chain stores by | | | | of creating a strong presence in one product |
| fragmenting the marketplace and putting | | | | category. This presence will be hard to take away |
| independents on the ropes. Recent growth by | | | | from me and I should always be able make a |
| chain stores and internet retailers has placed | | | | good living. I hope that all independents can do the |
| independents in a bad place. They can't sell their | | | | same, but it's obvious at this point that it will take |
| jewelry at the same price as the internet retailers | | | | courage and commitment. |
| and can't afford to offer the same product | | | | |