Rapaport Magazine

Upswing Continues

U.S. June Retail Market Report

By Lara Ewen


The economy may be moving ever so slightly toward an upswing, but retailers are not breaking out the bubbly just yet. After an unusually warm winter came to an end, stores saw 2012’s first quarter filled with the ups and downs that have come to define the current economic climate. That said, business owners who have fully embraced trends in social media have overwhelmingly seen more ups, whether through their connections with existing customers or their ability to rally new clients. The rest of 2012 will be played out as much online as in the stores, even for companies whose bread and butter is brick and mortar.

A GOOD START

The year is almost half over, and so far, sales are at or above 2011 numbers in most areas, year on year. “2012 is going steady, and we’re keeping up with last year,” said Keith Hurdle, owner of Hurdle’s Jewelry in Boulder, Colorado. “It looks like we’re on par with 2011. It feels good, and we’re hitting the numbers that we want to hit.”

For Amy Nogai, creative director at Arthur’s Jewelers in St. Paul, Minnesota, the reason is simple. “Our events have been bigger, and we have had more sales, because the economy is getting better. It’s nothing that we’re doing differently.”

Of course, the economy hasn’t been consistent, and neither have sales. Even at stores where numbers are good, it’s been nerve-racking. Richard Hegeman, owner of Hegeman & Co. in Providence, Rhode Island, has only just recently started to see his business pick up. “The first quarter of 2012 was a bit quiet,” he said. “April started to pick up toward the end of the month, and the first two weeks of May were busy. Now we’re swamped with work and projects. But my experience is that over the past few years, there’s been no consistency and no rhythm.”

WHAT'S SELLING HAS CHANGED

In stores where sales have shown steady increases, it’s the type of sales that has changed. “2012 is actually going better than 2011,” said Kathy Cary, diamond buyer at Skeie’s Jewelers in Eugene, Oregon. “Our numbers are better, but they’re different. We are seeing a huge increase in Rolex, but a decrease in our large diamond business. Is it that people are perceiving more value in the luxury of a Rolex versus the commodity of a diamond? We don’t know.”

As always, growth is the result of hard work and, most importantly, constant community interaction and outreach. “2011 was our best year ever,” said Steve Samaras, owner of Zachary’s Jewelers, with two stores in Maryland. “We really engaged the community, more so in 2011 than ever before. And so far, 2012 is 10 percent better than 2011, year to year.”

SOCIAL CUES

One of the most important ways jewelers have been engaging their communities has been through the savvy use of online tools. “Social media is huge,” said Cary. “We use Facebook and Pinterest, and we get a lot of repins and we have people who are following us. This is really our strongest advertising at the moment. The only other advertising we do that’s as effective is billboards, and Pinterest and Facebook don’t cost anything, except someone’s time.”

Cary feels that without engaging in social media, many stores are missing an important opportunity. “The reality is that if you want to communicate with the 30-year-old and under age group, you have to be on social media,” she said. “And if you’re not communicating with that age group, then where will you be in 30 years? And also, the demographic that really hasn’t recovered from the recession is the older boomers, and they’re not spending money, which is probably why we’re not making so many of those $5,000 to $10,000 sales.”

According to Nogai, however, just dabbling in social media won’t work. “Social media is helping businesses, but it could hurt you if you don’t have a goal and you’re just throwing things out there,” she said. Nogai’s company uses Pinterest and Facebook, as well as Twitter, Blogger and YouTube, and her store, Arthur’s Jewelers, also has its own app, available in the iTunes App Store. “It helps get your name to people you wouldn’t normally have contact with, like the friends of your top clients,” Nogai said of her store’s social media strategy. “On Pinterest, all your clients’ friends are seeing their pins.”

Samaras, whose store is on Facebook and Pinterest, agreed that working hard at using social media tools is the only way to make them work. “Social media is broadening the gap between the business that can afford to put someone to work on this, and the ones who can’t,” he said. “I have someone who spends eight hours a day on social media, but a smaller store can’t afford that. If you’re not focused on it, you’re wasting your time. If you want it to pay off — if you want to get out of it what it is possible to get out of it — then you need to put time and energy into it.”

 

THE MARKETPLACE

  • Round, princess and cushion cuts sell best, with rounds at the top.
  • Customers are trending toward just under or just over 1-carat stones, depending on their preference for spending on size versus color or clarity.
  • SI1 and SI2 are the best-selling clarities, though VS1 will sell if the stone is smaller.
  • H-I is the top color range.
  • Platinum and 18-karat white gold are both selling equally well, because there’s less of a price disparity between the two.
  • The average price for an engagement ring, including stone and setting, is $6,350.

Article from the Rapaport Magazine - June 2012. To subscribe click here.

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