Wrapping up

Holiday traditions run deep among independent jewelry retailers. Stores get decked out in Christmas ornaments; mailers go out to customers; inventory gets polished and display cases get shined. And store owners hope that the brief holiday sales period will bring in as much as 20% to 30% of the year’s total haul. But for an industry that’s been impacted by online sales, smaller margins, an increase in labor-intensive custom orders, and a trend of shoppers spending less on traditional diamond pieces, December might be less dependable than it used to be.

Still, it’s not all bad news. A MasterCard SpendingPulse survey from early this year found that holiday jewelry sales in the US were up 5.9% in 2017, buoyed by a last-minute surge the week before Christmas. That growth is cautiously predicted to continue for the overall retail sector through the 2018 holidays, according to an August report from the National Retail Federation. This bodes well for the stores that are still counting on a big end-of-year boost.

The bulk of business
Most jewelry stores still lean heavily on holiday sales, says Bill Boyajian, founder and CEO of consulting and coaching company Bill Boyajian and Associates, which specializes in working with the jewelry industry.

“Christmas is still the most important time for most independent retailers, but there has been a little bit of a shift in the last number of years, mainly because a lot of stores are doing more bridal and custom work,” says Boyajian, who has also served as president of the Gemological Institute of America (GIA).

Many jewelers run a loss for much of the year and depend on Christmas sales to give their bottom lines a boost, he adds. “It’s a difficult way to run a business, but it’s very typical. On average, jewelers do about 10% of their annual revenue in November, and 22% in December. And that’s not only jewelry. It’s most retail.”

But the landscape is changing. “Christmas is still a magical time of the year for our stores,” says Steve Quick, owner of Steve Quick Jeweler, which has three Chicago-area stores. “[But] we don’t post the amazing numbers we used to every year now. What’s changed is that the other industries we compete with have gotten great at marketing, and our industry has not kept pace.”

The jewelry category is up against phones and electronics when it comes to attracting holiday dollars, he points out. “Jewelry is still in the dark ages in terms of creating that kind of retail hysteria.”

Yet businesses depend on the extra income the holiday period brings in. “Christmas is still an important time of the year,” says Kevin Gorkofsky, owner of Kevin Edward Jewelers in Avon, Connecticut. “You get the bulk of your traffic, and it’s condensed into four weeks. We’re doing about 20% of our business at Christmas these days. It was more than that years ago, but today, people buy all year long. If they see something in June, they buy it in June.”

Being smart about stock
Many stores make the bulk of their holiday buys at shows such as JCK. But filling up on inventory so far in advance can be challenging.

“When you go to the jewelry shows, you have to be a very smart buyer,” says Gorkofsky. “Try to pick up on what the trend is going to be, and watch your inventory. You don’t want to be stuck with a lot of product in January.”

Being over-inventoried is an avoidable problem, though. If store owners can take a hard look at their past Christmases, they should be able to assess their needs moving forward. “I’ve been at this for 30 years, and it seems like so many Christmases, after it’s all over, I have so much merchandise,” says Doug Jones, owner of Dale’s Jewelers in Idaho Falls, Idaho. “It’s hard not to overbuy, but look at the volume you’re doing. Don’t go too crazy buying. You don’t need to have a ton of merchandise in today’s world, and people will wait a day or two to get the diamond they want.”

What to sell?
The merchandise mix for the holidays should take into account both current trends and customer budgets, jewelers suggest. “People want to buy jewelry they can wear every day,” says Gorkofsky. “Layering pieces, wearable jewelry. Naturally, you need the bigger pieces, too, but for Christmas, you want to stock the everyday gift.”

He says the sweet spot for his holiday customers is usually in the $300 to $600 range. “[That price point] is easier for disposable income,” he explains. “You’re gonna get those $10,000 and $20,000 sales, too, especially if you sell engagement rings, which add up fast. But you still need product at a good price point so you don’t scare people away.” For Jones, color is an important part of holiday sales as well. “Color is trending,” he observes. “Last year before Christmas, we spent so much time stocking our diamond wallet, but color sold. Even pearls.”

Last year was the first time he sold more color than diamonds at Christmas, he adds. “A lot of jewelers have become addicted to the bridal department and have forsaken the fashion and color areas. But you have to know how to sell fashion, and also tell a story. And custom work has been a big change, and that’ll hit at Christmas, too.”

Fortunately, as long as the economy remains strong and stable, the outlook for the holidays is positive.

“I think Christmas this year will be okay,” says Boyajian. “The economy is okay right now.” Still, he admits it’s difficult to make across-the-board predictions. “I have some jewelers [among my consulting clients] who are struggling month to month, and some who are having their best year ever.”

Sparkle all year round
Moving forward, the best plan for stores may be to eliminate the stress of managing holiday sales expectations by striving for more balanced annual sales numbers. “The key,” says Gorkofsky, “is to do business all year long, so you don’t have to count on Christmas to make your year.”

Jones agrees. “I think it’s a mistake to count on Christmas,” he says. “It’d be nice to bounce along with stable inventory levels and have a customer that’s been cultivated all year round, and then consider that extra 12% or 15% as gravy.”

Quick points to bridal as a good path to making that work. “Fortunately, love happens in all the seasons,” he says. “Strengthening the bridal department is the easiest and most dependable way to ensure year-round clientele.”

Tips for a successful Christmas

How to bring cheer to your sales figures

Make your attitude match the season. “Be present, nice and happy,” says Quick. “Your clients can read you better than you think they can.”

Reach out to your clients. Don’t wait for them to contact you. “Pick up the phone and call,” says Boyajian. “Say you have a new piece in, and remind people that they should be buying jewelry.” It doesn’t even have to be a phone call, he continues, but it has to be personal. “You can email. You can use social media. You can use Facebook. But contact them.”

Make your store shine. “Have your staff ready, and have your inventory clean and your showcases clean,” advises Gorkofsky. “It’s all about first impressions.... Being clean and being organized goes a long way.”

Promote yourself every chance you get. “Get involved in your community,” says Quick. “Establish a presence on social media. Send out a catalog, because people are looking for ideas. Even those who never look at mailings look during the holidays.” Creating special in-store events is also important, he adds. “Host trunk shows and pop-up collaborations with designers. Partner with a newer designer to host during Christmas.”

Don’t criticize; compliment. “When it gets busy, go into your ‘rah rah’ mode,” says Jones. “You have to show your staff you have confidence, so give high fives all around. Christmas is not the time to critique.” Most importantly, he says, cut yourself some slack and enjoy yourself. “It’s easier said than done, and sometimes you get in a grumpy mood. But it’s the holidays. Have fun.”

Image: Shutterstock

Article from the Rapaport Magazine - October 2018. To subscribe click here.