RAPAPORT... Most jewelry retailers are optimistic about the holiday season, although, as always, they’re holding their breath because of consumers’ penchant for waiting until the last minute to buy holiday gifts.
Retailers’ holiday marketing is emotional. Tiffany & Co.’s marketing has always had emotional content, according to Mark Aaron, a spokesman for the company. The emphasis is on quality, beauty and value and how it can mark or celebrate an important occasion.
Other companies are doing the same. Carlyle & Co.’s marketing tactics are aimed at moving consumers’ emotions, rather than appealing to their pocketbooks.
“The ads are certainly not price-driven,” said Russ Cohen, chairman and chief executive officer (CEO) of Carlyle. The company has 33 stores on the East Coast, running from Florida to Philadelphia, and three brands — J.E. Caldwell in Philadelphia, which has been in business since 1939, Park Promenade Jewelers in Central Florida and Carlyle itself, which is in the Southeastern U.S. Cohen expects the holiday season to do well.
Summer MomentumCarlyle’s high-end business has been particularly strong this summer and fall. Cohen said the fact that the stock market is doing well and gas prices are dipping is making consumers feel positive about the holiday season — not that gas prices really affect his customers, but he feels they have a psychological impact. Strong designer lines such as David Yurman do well. Diamonds keep getting bigger; his customers seem drawn to larger diamond solitaire earrings that range from 2 to 4 carats and rings whose center diamonds are 1 to 3 carats.
Carlyle stores are able to get the stones they want, but it is taking a bit longer to get them. Cohen said he is working with some new vendors in order to get what the company needs.
Colored diamonds such as fancy yellows do well with his customers, mainly among those who are collectors. “It’s not a huge part of our business, but it’s significant,” he said. The company has some customers who collect natural fancy color diamonds.
Targeted Direct MarketingCarlyle does a lot of direct marketing to its existing database of customers and some prospecting by placing large inserts in zoned editions of newspapers in zip codes where its current customers live.
Cohen said his stores use gift cards and sell more than they used to but they are not a significant part of the company’s business. “I think in part it’s because we make it so easy for someone to bring a gift back and exchange and return it,” he said.
The stores offer incentives to customers to encourage them to buy early, such as getting a gift with a purchase. However, since Christmas is on a Monday this year, Cohen expects that final weekend before Christmas to be an extremely busy one. “People do wait until the last minute,” he said.
The Countdown Begins
Judd Rottenberg, principal of Long’s Jewelers, which has four stores in Massachusetts, with a fifth under construction, and two in New Hampshire, was enthusiastic about the approach of the holiday season. “Forty-six days until Christmas,” he said on the day he was interviewed in November. “We are in the throes of the season.” He didn’t expect the actual buying to happen until after Thanksgiving. He believes that political commercials dominated the airwaves in the pre-election season, meaning jewelry retailers had to compete with those commercials for the public’s attention. Post-election, he sees an ever more intensive marketing push.
Rottenberg said his company’s customers are going for more unusual, larger and rare pieces. “People like to define their success by doing certain things and one way to do that is through a unique purchase,” he said. He also feels the strong stock market is putting consumers in a spending mood.
Charles Zerbe, owner of Zerbe Jewelers, Inc., in Colorado Springs, Colorado, didn’t expect to see traffic pick up in his store — except for occasional spurts — until the first week to ten days of December. However, he was holding events, such as a Ladies’ Night in November, to get customers thinking about the holiday. And Zerbe began beefing up its advertising in November and will continue to do so throughout the holidays. Downtown Colorado Springs was already putting up holiday decorations in November, but Zerbe Jewelers waits until Thanksgiving to decorate its store.
Buddy Simon, owner of Karat Patch Jewelry in Charlotte, North Carolina, is expecting a good year, although not a spectacular one. His marketing is usually focused on one or two dramatic pieces. This year’s piece is a 4-carat yellow diamond flanked with 1-carat diamonds on either side. These special pieces are what bring customers into the store, although they often end up buying something else.
Simon and Cohen were both concerned about the impact of the conflict diamonds movie, “Blood Diamond.” Even though it’s set in the late 1990s and the diamond industry is tackling the issues addressed in the movie, Cohen is not sure that moviegoers will understand that what the movie depicts is not the reality of today.
The Marketplace• Bridal jewelry is the holiday best seller.
• Yellow gold is expected to do well.
• Chain-link necklaces continue to be popular.
• Button earrings are strong in the East.
• Cocktail rings should do well.
• Jewelers are finding the stones they need — but it can take time.
Article from the Rapaport Magazine - December 2006. To subscribe click here.