The first-quarter results have been tallied, and the consensus is spotty. While most retailers seem to think the economy is heading toward a slow upswing, sales are not consistently reflecting a positive outlook. In addition to the consistency issue, customers are still a little nervous about spending, even when they have the money to spend. That said, better weather makes everyone feel cheerier, and the show season gives retailers at least a few diversions to look forward to.
Quarterly results
“Actually and surprisingly, 2010 has been slightly worse than 2009, even though the mood is better,” said Eve Alfillé, owner of Eve J. Alfillé Gallery and Studio in Evanston, Illinois, a Chicago suburb. “Economic insecurity is the main problem, even if our clients are not affected directly. They ask anxiously how we are doing; they are trying to take the economy’s temperature at every turn.”
Well-heeled clientele out West are similarly skittish. “So far, 2010 has been sporadic,” said John Nichols, sales manager at Huntington Jewelers in Las Vegas, Nevada. “Some months, it seems like we’ve turned a corner, and other months, it bottoms out. The people who’ve been buying from us for years are very cautious, even though they haven’t been affected dramatically by the economy.”
Not all customers are playing it safe, though. In Eugene, Oregon, Kathy Cary, diamond buyer at Skeie’s Jewelers, has seen her customers start to spend again, and thinks some of that is just because it’s been too long since anyone went shopping. “The first few months in 2010 were very soft for us, but the past two months have been 20 percent higher, year on year, and our foot traffic is way up,” she said, noting that it appears that “people have become bored with not spending money.”
In Rhode Island, business also has been good, although finding consistency is still a nagging issue. “The first quarter of 2010 has been better than average, and holiday 2009 was also better than expected,” said Richard Hegeman, owner of Hegeman & Co. in Providence. “I believe that people with good-paying jobs still have those jobs and are feeling secure. And you can only hold off on getting married or buying something nice for so long. I had a very good March. But I don’t think you can look at one month and use that as a bellwether for the quarter. It’s nice to have a couple of big sales, but if you don’t have those consistently, it’s still an aberration.”
Moving forward
In order to better understand where their sales are coming from, and where they’re going, retailers are taking a closer look at their demographics. Alfillé is finding that her client base is getting older. “My customers have aged,” she said. Many of them are Boomers, she added, who “are moving to their Western ranch properties, where the lifestyle does not include jewelry. Others have left their highly paid corporate life to become artists themselves, embracing the simple, monastic life.”
The gap in the market left by aging clients no longer interested in buying jewelry might be filled by the children of the Boomer generation, who Cary calls “boomerangs.” They’re becoming an increasingly important target market for stores. “Our main focus is bringing the younger client in,” she said. “We are aggressively courting this new demographic. We’ve added some cutting-edge silver, as opposed to old-lady silver, and we’ve become active on social networks, like Facebook and Twitter.”
Hegeman is also finding that his online presence is an important part of his marketing plan. “My website and Google have worked really well,” he said. “I’ve been surprised in the past six or eight months. I’ve had the site for ten years, but we redid it, with new imaging and new photos, eight months ago and it’s been working. People Google ‘jeweler Providence’ and it brings them here.”
For Richard Lee Mathis, owner of Symmetry Jewelers in New Orleans, Louisiana, communicating with his younger clients is about covering all his bases. “With our concentration on the wedding business, my demographic’s average age has been lowered,” he said. “With this tech-savvy generation, jewelers must keep up with all forms of communication. That means not only having an effective website, but maintaining a Facebook page, a Twitter presence and more.” Taking a broad approach is what’s helped him keep his existing clients and bring in new ones. “We do quite a bit of second and third wedding business,” he said. “I have been in the business long enough now that I am selling to my original clients’ children and, in some cases, their children’s children.”
The Marketplace
• Round is still the best-selling shape, followed by princess and cushion.
• 1-carat to 1.5-carat stones are the most in demand.
• SI1 is the top clarity, followed by VS2.
• G-H is the top color range.
• In settings, palladium and 18-karat alloys are gaining ground, though 18-karat white gold is still the best seller. Platinum is a close second.
• The average price for an engagement ring, including stone and setting, is $6,400.
Article from the Rapaport Magazine - June 2010. To subscribe click here.