RAPAPORT...
By the time fall rolls around, most jewelers have begun
planning for their holiday sales push. Part of the plan is determining the
right marketing strategies, both online and offline, but the lion’s share of
the work involves figuring out what kind of merchandise mix will excite
customers. Stores that have had a good year so far in 2011 are cautiously
optimistic, as they have been for the past few years, that this holiday will
turn out slightly better than flat. Stores that have been struggling are hoping
that with a wide range of price points and a good attitude, holiday will bring
a hopeful end to a stressful year.
Holiday Expectations
Most retailers are expecting 2011 holiday sales to be at or
above 2010 numbers. “We don’t have goals in terms of what we need to do for
holiday,” said Gail Friedman, owner of Sarah Leonard Fine Jewelers in Los
Angeles. “Black Friday has never been a big shopping day for us, but then,
we’re not in a mall, so it’s never affected us. But this year, we’re going to
try things. I have no idea how this is going to go. Hopefully, we have two huge
weekends and our Christmas will be as big as I think it’s going to be.
Otherwise, we’ll have a Christmas like we had in 2010, and we’ll be happy with
that, too.”
Most retailers seem to think that 2011 holiday sales will be
more or less in keeping with the rest of the year’s numbers. “Our retail
merchants’ association predicts a pretty flat season, but we’re actually being
more aggressive with our marketing,” said Chris Coleman, part owner of Nelson
Coleman, located in Towson, Maryland, and serving the Greater Baltimore
Metropolitan Area. “We are up in sales 9 percent for the year, and we’re
thinking we’re going to be up maybe just under 10 percent for the holidays.
We’re nervous, but hopeful.”
Sales are also holding steady in the Northeast, and the hope
is that holiday will continue that trend. “I think holiday will be slightly
better than last year, based on what we’re seeing,” said Perry Sporn, owner of
Perrywinkle’s Fine Jewelry, with one store in Vermont and three stores in
upstate New York, plus seven Pandora stores. “I don’t know that we’ll see the
economy get worse. It won’t be a banner holiday, but I think it will be
decent.”
For stores that have seen significant improvement this year,
the expectation is that the improvement will hold through Christmas. “We’re
running 20 percent above goal so far this year,” said Bill Jones, president of
Sissy’s Log Cabin, with two stores in Arkansas, “and we’re hoping to continue
that for holiday. It’s all about our mix of merchandise — we’ve stayed very
traditional with inventory — and our associates. They’re salespeople. People
come in to shop, and they want to be entertained. I say, if you’re clerking,
they’re lurking, but if you’re selling, they’re buying.”
Bolstered by Bridal
In areas that have been harder hit by a faltering economy,
sales have been tougher to come by. “It’s tough, because we’re out here where
people don’t make a lot of money,” said Don Hamann, president of Sartor Hamann,
with three stores in Nebraska. “We have 50,000 kids at the University of
Nebraska, and they have so much money borrowed, and all of a sudden, you’re
talking about $6,000 engagement rings, and they can’t get the money. We’ll do
holiday promotions like we always do, but we won’t do much different, because
we don’t have any new ideas that could sell $6,000 diamonds.”
Much of 2011 has been spent trying to figure out what works,
and what doesn’t work, in terms of merchandise. For some stores, engagement
sales have been a lifeline. “Bridal has been keeping us going,” said Friedman.
“We worked with The Knot and we learned that the designers that were in the
news were the ones that pulled in customers. Brides in Los Angeles are all
brand-driven. If it’s not popular, then they’re not interested.”
Going for Gold
For others, buying gold has kept them afloat. “There are a
lot of jewelers today who wouldn’t be in business if they weren’t buying gold
off the street,” said Hamann. “We’ve bought a lot of gold off the street.”
Buying gold isn’t right for everyone, though. “We never got
into the gold buying,” said Jones. “We were always concerned that gold buying
would tarnish our reputation.”
Coleman agreed, sort of. “Some of our competitors have
pushed so strongly on gold buying,” he said. “For some of them, it’s been like
crack cocaine. But we believe it’s also a warning. If you don’t get the message
right, you can damage your brand, and people begin to associate you with pawn.
So we call it ‘free jewelry box consultations.’”
Ultimately, said Coleman, it’s about buying what moves. “My
father’s favorite saying was, ‘It’s not a museum,’” he said. “No matter how
much you love a piece, you have to be able to sell it.”
The Marketplace
- Round sells best. Cushion or princess, depending on the
market, come in second.
- Stones under 1 carat, from .75 to .90, are moving fast, as
are 1-carat stones.
- SI1 is the most popular clarity.
- G-I is the best-selling color range.
- Platinum sales are about even with 14-karat gold in
settings, though some lower-end customers are turning to silver and palladium
is gaining some ground.
- The average price for an engagement ring, including stone
and setting, is $6,200.
Article from the Rapaport Magazine - November 2011. To subscribe click here.