A pre-holiday government shutdown in late 2018 meant some jewelry retailers saw disappointing Christmas sales and a slow start to 2019. Online sales also continued to challenge traditional brick-and-mortar shops, but the consensus was that even the smallest stores could compete in 2019 as long as they worked hard on their social media presence.
The New York perspective
The 2018 holidays were challenging for Catherine Angiel, who owns the New York fine-jewelry retailer of the same name. “I knew it was really not smart to make this announcement [about the government shutdown] a week before Christmas,” she said. “It’s the most important week for retail.” Although her store still ended the year 5% to 7% up from 2017, it wasn’t easy. “The shutdown came, and it was crickets.”
Angiel said online stores had also impacted her business model. “People want their product shipped free, fast, and returned free,” she commented. “They think they’re gemologists, so some of the challenge is to undo what they’ve read.”
Looking ahead to 2019, Angiel said she was heartened to see more customers leaning toward unusual jewelry, and more women self-purchasing. “They wanted black diamonds and grey diamonds. And we’re seeing a lot less ‘I have to talk to my husband’ and a lot more ‘I love it, I’m buying it.’ Independent women want unique things that express their individuality, and stores need to stop carrying mass-produced pieces. They need to appreciate new designs and new ways of doing things. If they don’t, they’re going to be in dire straits.”
‘Not so strong’
“November was strong, but December was not so strong,” reported Michael Han, owner and president of The Wedding Ring Shop in Honolulu, Hawaii. “It was not the December we were hoping to have. The most affluent customers felt more conservative this year, and we had fewer upgrades and larger diamond sales. When you miss three or four larger sales that you normally rely on, it’s a problem.”
Han said the impetus for the holiday slowdown had been the news from Wall Street and the White House. “When something negative is happening, like the government shutdown and the stock market [slump], there’s a collective apprehension about what’s going on.”
Bangles and colored stones like ruby, sapphire and emerald were big sellers during the holidays, Han related, as were non-traditional engagement rings. “We sold a 3-carat black diamond as a center stone,” he said. “I think the millennials are different, and they’re a little bit more price-conscious.”
He still faced challenges getting foot traffic, but found that increased online engagement helped. “Your sales team has to be engaged in social media, and we have to focus on our local market,” he said. “And that also means online referrals and reviews, and more ways for customers to contact you.”
Opportunity to learn
The shutdown was less impactful elsewhere. Ted Koester, owner of Herzog Jewelers in Fort Mitchell, Kentucky, said self-purchases and yellow-gold products were hot for the holidays, and that overall, the season had gone well. Calling 2018 “a good year,” he reported that “December was great, and had people spending more on the average ticket.”
Yet he also warned that the stock market and politics would impact 2019 moving forward. “We just have to focus on our strengths, watch our expenses, and see where the year takes us. It should be an interesting year. I’m not sure what will happen in 2019. I don’t think it will be a great year like 2018, but I think it can be a year to focus and gain market share.”
Han was upbeat about 2019 despite his store’s tough December. But beyond that, he was unsure, “because you can’t have an endless bull market.” He predicted the year would be “an opportunity to learn to market better, and get more hands-on with digital marketing. Things are changing so rapidly, and I think it’s really exciting that we can learn from each other.”
Article from the Rapaport Magazine - February 2019. To subscribe click here.