Will the holiday season bring joy to wholesalers and manufacturers? Traditionally, the industry looks to the fourth quarter to turn a profit, but some are taking a longer view in hopes of making the holidays part of a 12-month business.
“All barometers point to a strong holiday season,” says Ronnie VanderLinden, president of New York-based diamond manufacturer Diamex, as well as of the Diamond Manufacturers & Importers Association of America (DMIA).
“We had fantastic results at the summer shows that speak to the optimism about the impending season,” agrees Andrew Rickard, vice president of operations at RDI Diamonds, a wholesaler in Rochester, New York. Even the recent talk of US tariff wars has had no impact on the diamond business, nor has it dampened wholesaler confidence; most are adopting a wait-and-see attitude on the subject.
Meanwhile, holiday order-writing has followed a predictable pattern so far.
“Companies that forecast larger volume placed their orders in August,” explains Arch Kitsinian, president of manufacturer SA Kitsinian in Van Nuys, California. However, the independent stores are “typically later in the game,” placing orders in September and October, he says.
Rickard, for his part, has already been delivering a “good portion” of orders, with the remaining ones set to go out by the end of this month.
360-degree viewWhile gift-giving increases during the fourth quarter, many wholesalers rely on bridal as the foundation of their year-round sales. But the jewelry product itself is just part of the equation; wholesalers are increasingly recognizing the need to take broader economic, marketing and industry trends into account.
“There is no question that we still count on the holidays,” says VanderLinden, “but quite frankly, our biggest challenge is to bring the customer back to the retail store. We are successfully dealing with compliance issues [regarding jewelry-industry regulations], but that will mean little to nothing if we don’t get the consumer into the stores to buy our products.”
The multitude of buying options available has transformed the retail landscape.
“We have seen a lot of people going direct and brands selling online. It is the nature of business now,” explains Kitsinian, whose company owns bridal and fashion jewelry brand Vanna K. “But I don’t think the fundamental challenges have changed all that much. The core of our business revolves around the fact that we have to provide an extraordinary level of service and exceptional quality on a timely basis throughout the year.” For him, that translates into understanding the mind-set of the retailer.
“At our headquarters, we tell each other that we want to act like the jeweler’s back office,” he explains. “Our service has to include customer follow-up, delivery, product mix and pricing — as well as the ability to come up with new and exciting product. It is crucial to respond quickly, especially during the holiday period.”
Forging loyaltyOf course, developing and strengthening retail partnerships entails dedicated, ongoing efforts. “You have to forge the relationship all [the other] 11 months of the year — not just the 12th,” says Rickard. “You can’t call someone in November and expect them to buy from you. The reason you get holiday business is because you’ve been there for them in March and in August.”
He cites an “evolutionary” process that has changed the wholesaler-client relationship. “In my world, you can’t just sell a diamond,” he says, noting that offering value-added services has become more of a necessity over the last four to five years. RDI hosts an in-house buying event several times a year, where it holds information roundtables to educate its clients. The company also gives jewelers pre-written postcards to send to their customers, containing the jewelers’ store addresses and asking what type of diamonds the recipients would like to buy.
“You have to be creative in the services you provide your clients. It is a way of building trust and loyalty that is beneficial to both partners,” Rickard points out.
Finger on the consumer pulseKnowing consumer preferences is also helpful to the wholesaler-client relationship, since it keeps suppliers attuned to what retailers are likely to order.
“You have to understand your retailers’ needs, much in the same way they need to understand their customers,” says VanderLinden. “There will always be differences in jewelry preferences from region to region and even from city to city. None of that is wrong. But you’re only right when you are giving them what they want.”
Kitsinian is taking those efforts to a new level: In several months, he plans to open a flagship retail store of his own, which will give him firsthand insight into what consumers are buying. “We want to have a pulse on what’s going on. We want to see for ourselves what people like and not wait for our jewelry store clients to tell us.”
Partnering with designers on new collections is another tactic, one that VanderLinden says holds “great creative opportunities.” It helps that the Diamond Producers Association (DPA) is “advertising and marketing diamonds again the way De Beers did years ago, before they stopped,” he adds. He also believes the ability to customize jewelry will help encourage sales: “Jewelry is very personal — and personal is what it is all about.”
Image: KitsinianArticle from the Rapaport Magazine - October 2018. To subscribe click here.