06292017Thu
Last updateWed, 28 Jun 2017 10pm

Retailer Roundtable: What are the biggest challenges facing today’s independent retail jeweler?

Q: What are the biggest challenges facing today’s independent retail jeweler?

“As an independent retail jeweler we are constantly facing many challenges ranging from competing big box stores, other independent jewelers, a declining consumer interest in purchasing higher end jewelry beyond bridal, as well as internal challenges such as finding young men and women who desire to make a career commitment to our industry. But for me personally, I feel the biggest challenge we face is embracing the technological revolution impacting our industry today. Custom CAD design with 3D printing and manufacturing, barely a consideration for us a few years ago, is becoming a major component of our business model. Transitioning from traditional bench design to using CAD requires us to make hard decisions on what (and whom) we will invest in as we plot our future. With this new technology, we must not become complacent and recognize that the next several years will require us to become more educated on these advancements. As new innovations evolve, we must be very nimble and quick to adapt to changing markets and consumer dynamics. Our success depends solely on our willingness to learn and embrace the changes unfolding around us. There are great opportunities for the taking, but independent jewelers must both embrace the changes and see them as the revolutionary opportunities they are, or fall victim to someone who will.”

RR TomK

Tom Koosed, general manager
Thurber’s Jewelers
Wadsworth, OH

 

“There are two sets of challenges that independent jewelers face today, both behind the counter and in front of it. Behind the scenes, there are challenges in hiring people that truly understand and want to be committed to the gem and jewelry industry and retail. There is a lot of product information and product appreciation people must know and value, but not everyone has that passion or commitment. And, retail can be very demanding time wise. Younger people want more time for themselves. So hiring today is a big challenge for independent jewelers. I’ve been very fortunate to have my niece Stacey with me for 15 years now. She’s very dedicated to the store and the industry and will help determine the future of our store and the direction of the industry with her roles in industry groups. In front of the counter are the Millennials. Typical young bridal customers want to know everything about diamonds when they enter the store. And, they’ve been doing a lot of research online. We have to always be prepared to answer any and all questions, as we’re the authority on what we sell. This has become increasingly challenging with lab-created diamonds becoming more prevalent. Interestingly, this age group also wants to feel a connection with the person helping them. Ethics are very important to Millennials as are one-on-one relationships.”

RR Pope

Carolyn Pope, president
Crews Jewelry
Grandview, MO 

 

“What’s challenging for us, and I think a lot of jewelers, is keeping up with the manner and speed at which things change. From trends to technology, as business owners we have to be current to achieve market differentiation. Part of that is the willingness to take risks, a quality my mother taught: ‘don’t be afraid to try new things.’ Taking risks and trying new ways of doing things makes us different to our customers and innovative within the industry, whether it’s new tools from Stuller or the latest tech. Being part of a Plexus group and buying groups helps us gauge just how current we are. One risk that has paid off for us is the slow process of increasing our bridal jewelry and loose diamonds. We offered both in the past, but for the last three years we’ve been slowly building a better cross section of rings and a stronger range of loose diamonds. Increasing these two products takes time and they’re both a huge financial commitment, but it is paying off. We can be scared to try new things. Sometimes things just aren’t going to work and you are going to have to move on to the next thing. For example, we just tried a 60-month financing offer that wasn’t very successful. But on to the next venture.”

RR Jeff G

Jeff Guntzviller, General Manager
Miner’s North Jewelers
Traverse City, MI

 

“For us the biggest challenge we face is competing with the internet on diamond sales - that and Big Box retailers and national chain stores. Gone are the days when jewelers made a decent profit on diamonds. It seems those days have been gone for about 25 to 30 years now. To counter the thin margins we are pricing diamonds as competitively as we can and making up for it on repairs and custom work. For our store, repairs make up about 70 percent of revenues and custom work about 30 percent. So far it has been working very well for us. This has been a banner year for us: we’re rocking and rolling in 2016! We’ve also made some adjustments to our advertising as well to help cut costs. Now we’re reaching our primary market, outlying communities and neighboring towns through social media. Leading with Facebook we have about 2,800 fans, which is pretty good for a small town jeweler. We’re doing paid ads there. Twitter and Google Ads are most likely tied for second place. With Instagram and Pinterest there’s definitely room for improvement, which is another challenge for us this year and next, but we’re confident we’ll get there with Facebook leading the way. Contests and giveaways for liking our Facebook page has really helped increase our fan base and followers on social media websites. For the summer months we’re tamping down a bit, but in the fall and into the holiday season we’ll get things going again as people really like the giveaways and contests.”

RR Steve

Steve and Rosemary McQuerry, owners
The Jewelry Doctors
Pikeville, KY

 

“Millennials. Millennials. Millennials. Why do you think that at every trade show there’s always a seminar on selling to or marketing to Millennials? This is a group of people that think they know everything after 30 minutes of research on the internet, combined with consulting their friends, who also know nothing. I had one young lady who wanted me to sell a diamond for less than my cost. They think they know everything there is to know about diamonds, think they have completely informed themselves, and are totally unwilling to learn anything from an expert.  The store owner and his staff are viewed as adversaries to be taken down or beaten into submission by the weapons of arrogance and ignorance. Ultimately, the Millennials know they want to buy from you so as to avoid being ripped off from an online merchant. Internet sales aren’t stealing business away from retail stores as many retailers think. Instead, what diamond sales on websites do is provide an unrealistic and  inaccurate value of the actual price of quality diamonds of certain weights, usually 1-carat and up, as well as giving the young shoppers an unrealistic expectation that they might shop almost exclusively on color and clarity alone. They are completely ignorant of the absolute fact that make (cut quality) can reduce the price of a diamond by as much as 40 to 50 percent in some cases. And, are completely ignorant of the fact that the online retailer may not even have the stone in stock. The fact is that 65 percent of Millennial customers are introduced to businesses by smart phones. But in 10 years, internet sales have only doubled to 7 percent of sales. And retail sales are 93 percent of the business. Shockingly, only 1.3 percent of the retail diamond business is done by the internet. The remainder is done through brick-and-mortar stores. And best of all, 85 percent of customers prefer brick-and-mortar stores over the internet! Sadly, the Millennials don’t seem to be able to comprehend the vast advantage they would have over combining their internet knowledge with the complete knowledge of an older, but perhaps genuine, expert. This is the problem all of us face when attempting to provide a service to those who are already convinced they really don’t need your service and that they have far more knowledge than they actually possess.” 

RR Mills

“Diamond Jim” Mills, president
Pineforest Jewelry
Houston, TX

 


Columnist


×