There’s optimism again at independent jewelry stores. As the holiday season approaches, cheerfulness and hope are slowly coming back, as are the customers. Although much of 2010 has been a roller-coaster ride of ups and downs, the mood overall is decidedly chipper, and most retailers are looking ahead to 2011 with great expectations.
Sales Improving
“The main difference between 2010 and 2009 is that consumer confidence seems to be higher,” said Hermann Bredemeier, owner of H & H Jewels in Coconut Grove, Florida. “That’s evident in our sales and traffic flow in the store.”
Consumer confidence also has improved, according to Daniel Gordon, president of Samuel Gordon Jewelers in Oklahoma City. “We have seen a gradual increased optimism with consumers and, as a result, more people are walking in the door,” said Gordon. “They are still spending their money cautiously, but the dollars are coming back steadily but surely. 2009 was more like a culture shock, and 2010 is more like a realization.”
For some retailers, the increase in sales is the result of new opportunities to do business. “We opened our new store in September 2009, and the new location has given new traffic,” said Curtis Bennett, vice president of retail operations at O.C. Tanner, with two stores in Utah. “2010 has also been a better year than 2009. We’ve seen a 25 percent increase in sales for the fiscal year.”
In New York City, the bottom line also is improving, though there’s still some hesitation left over from the mood-crushing recession. “The second quarter of 2010 was much better than in 2009,” said Evans P. Siskel, co-owner of DVVS Fine Jewelry in New York City. “Many of our most loyal, returning customers have admitted to setting lower budgets for certain gifts. It seems the discussion always comes back to being able to retire one day and saving money.”
While a positive outlook is pervasive throughout the industry, it comes with a tinge of caution. Most retailers agreed that there is still a lot of hard work to do. “2010 has been a very exciting year for us,” said Steven Tapper, vice president of Tapper’s, with three stores in Michigan. “It’s been a challenge, but we’re doing a lot to build the true quality of our brand. It’s about the merchandise, but it’s also about the quality of the experience that someone has when they come to our stores.”
Employee Confidence
One of the biggest issues facing stores now is keeping the sales staff happy and enthusiastic about doing business. “In this day and age, you must empower your employees to be able to make decisions themselves,” said Gordon. “Having a purpose is greater than making a paycheck in the new age of hypercommunication and digital information. Take care of your employees as if they were your customer and you will have the best team you could ever imagine — and hold on to them, too.”
According to Bennett, keeping his employees happy is as important as keeping his customers happy. “My clients’ mood is getting much better, but my employees are tired,” he said. “It’s hard, day in and day out, to wade through the recession, and continue to drive sales and get your clients to make purchases when we’ve been in a recession for two years. But we try to do everything we can by giving employees additional money opportunities. And we’re also trying to recognize them for their hard work, and give them a great working environment that they can rely on.”
Holiday Outlook
If customer confidence and employee moods hold, and if the economy continues to limp out of the recession, most retailers agreed that the holidays should bring a good end to the year. “We believe that this Christmas, consumers are tired of not spending,” said Bredemeier. “Therefore, they have saved and have realized they deserve to reward themselves with fine jewelry purchases.”
Gordon also is looking for a good holiday season, but recognized it won’t come without hard work. “Due to the tone and sentiment that we have seen improving, I think this year will improve, but I think that success will depend on having a well-thought-out strategy,” he said. “It’s more crucial than ever to have the right selection and mix for your particular store niche. We haven’t taken on anything new this year, we have laser-focused our strategy on what’s working for us with our existing vendor relationships and doing the very best in our market.”
As for 2011, those with crystal balls are staying silent. But everyone’s fingers are crossed. “We’re planning for a great holiday,” said Tapper. “And I think next year will be even better than this year. We’re on our way back.”
The Marketplace
• Round is the best-selling shape, followed by princess.
• 1-carat to 1.25-carat stones are in the highest demand.
• SI1 is the top clarity.
• G-H is the most popular color range.
• In settings, platinum has returned as the metal of choice.
• The average price for an engagement ring, including stone and setting, is $6,600.
Article from the Rapaport Magazine - October 2010. To subscribe click here.