It’s beginning to look a lot like the holidays at independent jewelers across the country, and though it may feel as if the decorations are going up earlier and earlier each year, the shoppers are buying later and later. Stores are prepared to make a hard push at the end of the year, but most retailers are optimistic that last-minute purchases will come through and pad the margins sufficiently, bringing a thin line of black back to the books.
Last-Minute Shopping
“I think this year, holiday shopping may go down to the wire,” said Don Hamann, president of Sartor Hamann, with three stores in Nebraska. “We do a lot of our big business in the last few days. But it also matters when Christmas falls. So we have to get them into the store that week before.” Hamann says people are more likely to put off their shopping when they think they have time to shop around.
On the East Coast, late shoppers are also a fact of life. “We see a steady increase starting in October and then a huge rush during the last two weeks before Christmas Eve,” said Amanda Coleman, assistant general manager at Nelson Coleman, located in Towson, Maryland, and serving the Greater Baltimore Metropolitan Area. “We have many customers who wait until the last week to do all their shopping.”
According to Russ Varon, co-owner of Morgan’s Jewelers, with two stores in Southern California, most of the late shopping for jewelry comes from the fact that the lion’s share of those purchases are being made by men. “Guys don’t shop in advance,” he said. “If a guy is in our store, it’s because the event is today or tomorrow. So most of our holiday business is done December 22nd through the 24th.”
Other store owners think that the reason shoppers come in so late in the year is because they know what they want. “Our customers start late,” said Perry Sporn, owner of Perrywinkle’s, with one store in Vermont and three stores in upstate New York, plus seven Pandora stores. “We’re an established business, so our shoppers are late shoppers because they know they’ll come here. People are more influenced by promotions if they don’t know where they’re going to go.”
The desire to lure holiday shoppers in with big discounts and special promotions may be tempting to some stores, but, according to Bill Jones, president of Sissy’s Log Cabin, with two stores in Arkansas, those kinds of sales are not a good move. “You can already see some panic in retail,” he said. “There’s even a pre-Black Friday. You’re seeing everything moved up and the discounts coming out faster, because there’s so much pressure to perform at this time of year, and some retailers think the only way to get the results is to have sales. But I don’t think that works, so we’re not having any sales Thanksgiving weekend. Discounting is not the way to go.” And, although Jones sees his customers buying later each year, he’s not concerned about that. “Sometimes they all come in the last two weeks,” he said. “But people are going to buy something for Christmas, unless it’s a real Depression.”
Determining Factors
It’s not uncommon to hear store owners and managers talk about how the internet has affected their holidays sales, and not always by stealing customers away, but sometimes simply by making salespeople fight harder for the sale. “I think a lot of people would rather buy jewelry from a brick-and-mortar store than online, but they seem to be using the internet to set the price,” said Varon. “They bring in their iPhone, and show me a price and say, ‘What can you sell it for?’ You need the right price to make the sale.”
Hamann agrees that online competition is making things tough. “My biggest problem now is that people can buy engagement rings on the internet,” he said. “I see all these people getting an education online, instead of in the store.”
Looking Ahead
But even with the competition, most are happy to be putting the year behind them and look forward to the coming year. Predictions range from enthusiastic, full-blown optimism to more cautious finger crossing. “I think the U.S. economy will be a little better in 2011 than it was in 2010,” said Sporn. “No boom, but a slow slugging it out. For my business, it’ll be a little better than the overall U.S. economy, because of what we’re working on and what we’re doing. We’re a small business. Smaller companies should be able to do better than the overall economy.”
Jones is much more positive. “I think 2011 will be very bright, and better than 2010,” he said. “I think we’re seeing the light at the end of the tunnel.”
The Marketplace
• Round is the top-selling shape, followed by princess.
• 0.75-carat stones are selling well, as are stones over 1.5 carats.
• SI1 is the most popular clarity.
• F-G is the top color range.
• In settings, 18-karat white gold does better than platinum.
• The average price for an engagement ring, including stone and setting, is $6,200.
Article from the Rapaport Magazine - December 2010. To subscribe click here.