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Create buzz around the cash register

One idea that popped into my head during Tuesday's eco-luxe event (other than ‘I am a wasteful human being who needs to recycle more’) is that it's probably not a bad time to invest in some socially conscious, lower-price-point pieces to stick by the cash register.

Case in point: a new line called "Let it Bee." 

This line of bee-themed jewelry is attempting to create buzz around an issue that maybe doesn't get as much play as larger environmental issues, such as the plight of the polar bears, but is a big problem just the same: Colony Collapse Disorder, or CCD.

Not to be confused with the awful Catholic version of Sunday school I was forced to attend every Sunday of my young life (thanks, Mom), CCD refers to the unexplained phenomenon of workers bees abandoning their hives, leaving the other bees behind. Without the workers, the hive collapses and the majority of its occupants die off.

What this means, in the long run, is fewer busy bees to pollinate crops, which, in turn, has an effect on the food chain.

Feel like the only thing we'll be missing if honeybees disappear is, well, honey? Consider a 2008 report from Congress that shows that honeybees are the most valuable economic pollinators of crops worldwide, contributing to the production of many fruits, vegetables, tree nuts, forage crops (plants eaten by grazing livestock) and some field crops (plants we eat).

I don't want to turn this jewelry blog into a biology lesson, so if you want more information on CCD, click here, or to download a PDF of the report just mentioned, click here.

In any case, “Let it Bee,” which consists of two distinct collections, features unique designs and is priced very well.

Pieces in the basic “Honey Bee Line” start at $15.99, while the more upscale pieces in the “Colony Culture Collection,” will run customers a max of $160.

(The “Apiary” bracelet pictured here is part of the Colony Culture Collection.)

Of course this isn’t fine jewelry (though the line's creator Meg Bryson wouldn't object to crafting a few high-end pieces), but it's cute, the designs are great and I could see the line having mass appeal to a number of age groups, from grandmas to young girls.

So would it be such a crime to place it by the cash register and sell it as an add-on?

It's for a good cause, as 5 percent of the proceeds from each sale goes to the CCD Research Team at Penn State.

Carrying the jewelry helps spread the word about CCD, giving life to the old adage "you learn something new everyday," and conveys a message of being socially responsible to your customers.

This is a line you can carry in good conscience, even if you hate bees because you've been stung too many times.

Do shoppers enjoy coming to your store?

Last week, I attended the Rapaport Diamond Conference, which concluded with an interesting discussion on the Kimberley Process.

While my original article focused on that--journalists are suckers for a good debate--I felt I'd be remiss not to mention another topic that caught my attention during this all-day extravaganza: Other retailers leave jewelry stores in the dust when it comes to providing a relaxing and enjoyable shopping experience for consumers.

This is especially detrimental in an industry that's asking consumers to drop at least hundreds--more normally thousands--of dollars per purchase.

And while I hate to beat a dead horse, as this is a topic this magazine has covered time and again, it's probably worth mentioning at least one more time.

Just ask Chris and C.K.

--Chris Ellis, president of Consensus Advisors, talked about how jewelry stores are unnecessarily filled to the brim with product.

Ellis is definitely a man who understands where jewelry stores go awry. His Boston-based investment banking and financial advisory firm has been front and center for some of the industry’s most high-profile meltdowns in recent years, including L.I.D. Ltd. and Friedman’s Jewelers.

What he said, essentially, is that retailers need to quit worrying about filling every square inch of their showrooms with display cases--which are then, of course, packed with goods they don't actually own and have no motivation to sell--and put something different in their store, like a bar or children's play area.

Don't think anybody will sit at the bar and it'll be a waste of your time and money?

Talk to Cathy Calhoun at Calhoun Jewelers in Pennsylvania or Jeff Weiss at Glennpeter Jewelers in upstate New York.

Their bars are a hit and, according to both Calhoun and the folks at Glennpeter Jewelers, so were the articles we did on both of their stores.

Cathy Calhoun told me she's been getting tons of calls about how she set up her bar (pictured here), whether or ot people use it, etc., since the article on her space ran in our September issue.

(Sorry I can't provide you with a link; that story's not up on our site yet, but the Glennpeter story was an online exclusive you can check out here.) 

--C.K. Venkatraman, of Indian retailer Tanishq, questioned whether or not jewelry stores both in India and the United States were doing enough to keep up with the increasingly interactive world that revolves around things such as iPods and "e-books," a reference to the new Amazon Kindle.

Diamonds might be a girl's best friend today, but will that still be the case 15 years from now?

"Are the jewelry stores in the U.S. sanctuaries?" he said. "Are the jewelry stores in India designed for the women of 2025?"

Venkatraman also notes that in almost every retail store, people can interact independently with the products, citing in particular the experience people have when they go to an Apple store.

People probably get sick of hearing experts heap worship on Apple like it's a retail demigod--the product of a retail store that's mated with a super-hip hangout--but it's pretty obvious they know what they're doing.

This is not the case in the vast majority of jewelry stores where the high-priced merchandise is locked up, though it is worth pointing out that Tiffany & Co. now has two stores that offer lower price-point merchandise that's displayed so customers can try it on without assistance. It opened the first earlier this year in California and followed recently with a second store in Seattle.

Venkatraman said jewelry stores need to figure out how to make the shopping experience more fun for customers, citing his company's now-shuttered Tanishq boutiques as a good example of how jewelry shopping can be a "stress-buster,” a calming, relaxing experience, for women.

Can the same be said about your store?

For the Wii ones

When I first set out to write a story about the new Glennpeter Jewelers Diamond Centre in Albany, N.Y., I was really focused on the bar-in-store angle.

But as I interviewed Chief Executive Officer Jeff Weiss, it became apparent that there was another interesting story about innovation to be told: In crafting the store design, the owners kept customers' children in mind.

Located off the 7,000-square-foot store's main showroom—yet within the field of vision for watchful parents—is a "Wii room," named for the interactive Nintendo game system it is equipped with. It's a place where children can literally "go play" while their parents shop.

Perhaps even more interesting is the children's birthday party room, a room designed for just that: celebrations for little girls, as well as those ages 7-14.

Weiss says he added the playroom feature as a nod to his now 12-year-old daughter who asked, simply, what was in it for her when her dad was pouring all of his time into the new store.

For a cost of $25 per head, little girls can enjoy an afternoon of pizza and beaded-bracelet making with local designer Donna Bates.

The birthday girl, tapped as the "little princess" for the afternoon, also gets to don a $25,000 diamond tiara, a bauble she also can let her mother try on but, Weiss says, usually doesn't.

"We do know every one of those little girls will be buying jewelry 20 years later," Weiss said with a laugh, when asked about the business angle behind the party room.

Moreover, though, the room is just another way the Glennpeter Jewelers Diamond Centre makes its name in the community and gets people in the doors to at least see what the store has to offer.

"I think we're the only jewelry store in the whole country to do this," he says.

If not, then Weiss' store is definitely in the minority. And note to Chuck E. Cheese: Look out.

Cost of Doing Business dissected

This week, Jewelers of America (JA) released the results of its annual industry benchmarking survey, the “Cost of Doing Business.”
We received the results mid-day on Tuesday and posted a story immediately.
To be honest, I'm a little surprised at how little interest the survey story has generated on our Web site.
It was neither one of the “Most Popular” or “Most E-mailed” stories and, if it made an appearance on either of those lists since being posted on Tuesday, it was a brief one.
In times like this, I thought retailers would have been clicking in droves to have a look at the results and see where their jewelry stores stand.
I was wrong; looks like the Cost of Doing Business just can't compete with Heidi Klum.
In any case, the survey found a median sales decrease of 3.5 percent.
Breaking it down by store type, sales for chain stores fell 13.2 percent, followed by independent mid-range stores (5.5 percent), independent high-end stores (1.3 percent), and designer/artist/custom shops (0.8 percent).
JA pointed out that the 3.5 percent drop marked the first time sales “declined materially” in the survey’s 18-year history.
But a 3.5 percent drop doesn’t seem to jive with what we see happening around us in the jewelry industry today, does it?
A 35 percent drop seems more fitting.
And, based on the remarks posted in the online Comments box accompanying the story (which, oddly enough, turned into a mini-forum for a debate on healthcare...I guess any platform will do for a debate on that issue these days), some of our readers seem to agree.
So what could have caused such relatively sunny results?
I turned to JA for some answers.
As Lauren Thompson with JA so kindly explained, there are a couple of reasons the figures in the report might not be an exact reflection of industry averages.
To begin with, the report focuses on the median for each jewelry category.
The median is a mid-point for a data set, with one-half of the firms reporting figures above it and one-half below it - and is NOT an average.
The median is used, she tells me, because when taking a sample, as JA does for this report, there are wide swings in data and that can throw off an average.
Lauren also noted that while 687 stores took the survey this year, up from 384 last year, it is still just a sampling of the industry as a whole, intended to be used as a benchmarking tool, not just a data reference point for the industry.
It’s also worth mentioning that the numbers included in the report are pretty close to the data provided by the Department of Commerce’s Bureau of Economic Analysis regarding jewelry and watch sales, as documented here by industry analyst Ken Gasssman.
One last thought that occurred to me when reading through the e-mail from JA: those figures are for all of 2008, eight months of which were spent in pre-recessionary state.
I know jewelry sales weren’t exactly stellar for the first eight months of 2008, but I think everybody can agree that it wasn’t until September that the economy really took a nosedive.
Still want to read more about the Cost of Doing Business?
Look for an in-depth analysis on the survey in upcoming issue of National Jeweler.

Change, jewelers, change

Reflecting back on what I saw and heard at the Vegas shows, one week later, my overriding sense is that jewelers were on the receiving end of a lot more finger wagging than I’ve seen in the past

Nearly every seminar felt like an intervention. Admonished for essentially being the retail equivalents of a 1980s hair band, jewelers were warned that they will be hurtling towards extinction if they can’t learn some new tunes.

Jewelers were told they have messed up their inventory because they lack computerized systems and that their poorly chosen merchandise is draining profits. Furthermore, jewelers were advised that if they are not Facebooking, Tweeting, blogging or, at least, ramping up their Web presence, they can rule out any customers who aren’t wobbling into their stores on canes.

Many of the observations were on target and warranted, but where was the tough love before the fourth-quarter 2008?

One thing that seemed lost, to me, was the notion that being a bit older is not necessarily a bad thing for a business. It should be recognized that jewelers aren’t Apple store hipsters showing off an armful of tattoos as they demonstrate features of the latest iPod—nor should they be. They are selling merchandise meant to last a lifetime, and being able to tout a long history, a well-honed reputation and industry credibility while doing so is not a liability.

Customers—young and old—can appreciate a business with some age spots. Consider how many people flock to the candle-lit Lafitte’s Blacksmith Bar in New Orleans, which claims it is the city’s oldest bar, or how hard it is to get tickets to see the Boston Red Sox at Fenway Park, which opened in 1912. Brooks Brothers, the oldest men’s clothier in the United States, has been around since 1818, and Macy’s opened its doors in 1858. 

The key for longtime retailers may be to pair their old-fashioned vibe with new technology and fresh business practices. Show off the antique showcases and chandeliers inside your store and pay tribute to your great-grandparents who opened the business, but make sure you do so with high-resolution photographs on your up-to-date Web site.

Tell your best customers about your cigar party through the usual phone calls or mailers, but post it on Facebook too. Setting up a page is free. So is a Twitter account, which will help you send out quick same-day reminders. Research has shown that jewelry stores are considered intimidating. Putting your store on one of these social networking sites with fun photos and some snappy text about store happenings can prove otherwise. 

Those using dusty ledgers to track inventory versus a computerized inventory management system that can pinpoint fast-selling merchandise should at least look into the latter. After getting over the initial hump of figuring out how the system works, it could save money and time. 

Even the oldest of retailers must, in the end, reflect today’s consumers. Younger consumers might appreciate your store’s history, but if they can’t find you on Google, you might as well not exist.

If there’s one thing I learned in Vegas, it’s this: Reflecting who your customers are now is a tradition worth starting, and keeping.

Buffett: A quarter of all jewelry companies will be gone within year

Warren Buffet is forecasting that 25 percent of all fine jewelry companies, across the distribution pipeline, will be out of business within 12 months. I received this information on deep background from a very trustworthy source.

As you're probably aware, Buffett's Berkshire Hathaway has been buying up both supply and retail fine jewelry companies over recent years. And to state the obvious, this is not a man who makes statements like this lightly. He is fully aware of how much impact his opinions can have on a marketplace.

I dislike being the bearer of bad news as much as anyone, but I believe I wouldn't be living up to my responsibility if I didn't bring this to your attention.

Here at Las Vegas trade show market week, there's an eery feeling of disorientation the likes of which I've never experienced since I started coming here in 1991 when the shows were first established. There's both more traffic than I expected, to be honest, and there are exhibitors reporting that they're writing business.

Conversely, there are way too many industry members missing from the mix this year who, until this year, I could not have fathomed a Las Vegas show week without. 

 

The biggest question, as always at a trade show, but far more important this year, is that of inventory. As retailers live off existing stock to help maintain feasible cash flow, ordering from the supply chain has essentially been at a standstill. Many just can't imagine how suppliers are managing to pay their own bills, especially when you consider the difficulty of obtaining financing thrown in.

There was a panel here yesterday on the "evolution of the business." Unfortunately, and not surprisingly, there wasn't a heck of a lot of visionary insight provided. Nobody knows. Except Buffet, I guess. I really hope he's wrong.

Jewelers taking to social networking

Yesterday, Friday morning, was the first in our series of four breakfast educational sessions at the 2009 Couture show. Held at the opulent Wynn Hotel, the breakfasts are part of our America's Best Jewelers program, which not only recognizes top-performing companies but also brings them together to work toward solutions to common challenges.

Yesterday's topic was social networking, and it was the first time I witnessed live the extent to which forward-thinking jewelers are embracing these newly available tools. Four panelists joined me, as moderator, and interacted with a room of a hundred or so jewelers in covering topics from Facebook to the even newer phenomenon of Twitter.

The model for successful jewelry retailing is changing so rapidly that it's hard to see how companies that don't embrace--and excel--in social networking will really be able to survive profitably in the new marketplace. It would be as if a traditional jeweler had never learned the basics of advertising and marketing. You just can't run a business without the standard tools of operation, and today, this includes social networking to build relationships with customers and stay connected.

The thing is, it's not difficult to get started on it. And some of the amazing success stories I heard yesterday confirmed my belief that this is truly the wave of the future.

There's a lot more to be said on the topic, obviously, but I need to get downstairs to this morning's session, which will focus on employee training and compensation. It's being led by our educational sponsor, Jewelers of America. 

If you're here in Las Vegas, join us for today, tomorrow, or Monday's sessions. I'll be back moderating tomorrow, when we'll share and discuss in-store events. We'll finish up on Monday with inventory management. These are great sessions, and everyone always walks away wiser.

You can also join the America's Best Jewelers Network online at ABJNetwork.com. To become a member, you must be a JBT-listed North American fine jewelry retailer. I'll approve you, and you can join in discussions with 500 of your peers on our industry's only jeweler-to-jeweler social network.

Are diamonds ready for their close-up?

I spent the bulk of Tuesday afternoon getting my schedule together for the big trip next week out to Las Vegas for the jewelry shows.  

While there’s a lot to be excited about, one of the appointments that’s most intriguing to me is my Saturday sit-down with the folks from diamond technology company Gemory LLC.

The topic at hand: their DiamondPure nano-photograph technology for diamonds.

Awhile back I wrote this cleverly headlined story about DiamondPure. But I still have a lot of questions about the technology, the main one being, will people actually be willing to pay for this service?  

From what I gather, the basic idea behind DiamondPure is to make diamonds--which are heavily marketed as the perfect gifts to mark special events such as an engagement, an anniversary or a new baby--even more remarkable.

Buying your wife a 3-carat diamond pendant as a push present? Well, why not take it up a notch by putting a super-small picture of the new baby in the diamond.

The catch is that the picture, obviously, isn’t big enough to be seen by the naked eye and must be viewed using GemmaView, a portable viewing device from Gemory.  

While the concept is cool, I just can’t picture diamond lovers parading around town with their own personal loupes, asking people to take a look at their wedding portrait shrunken onto a diamond.

But maybe I’m wrong.

Guess we’ll find out how many photo-enhanced diamonds have been sold so far when I meet with the Gemory people in Las Vegas.

Zale stock rockets 28 percent Friday

Not to get our expectations out of proportion, but the indicators keep lining up in suggestion of an improving market.

After good news recently from Signet--parent of the Kay and Jared chains--and an upgrade by analysts of its stock from hold to buy, Zale followed suit last week. 

Analysts said the surge predicts that Zale will demonstrate similar strength to that shown by Signet when it reports earnings in coming weeks. Bank of America raised its outlook for Zale from neutral to buy and increased its target price for Zale shares to $5.

Citi upgrades Signet to "buy"

I've been writing about growing momentum in the good news category of late--finally. Today, more to add. 

Signet, parent of Sterling Jewelers, the largest U.S. jewelry-specific retailer and operator of the Kay Jewelers and Jared chains, has had its stock upgraded by Citigroup from "hold" to "buy."

Speaking of improving market conditions in the UK, Citi analysts said earnings now "look to have an upside forecast risk."

"Until now, with macro conditions progressively deteriorating, we have argued that weak comparatives will have little traction with a heavily indebted consumer, a declining housing market and rising unemployment. However, there is growing evidence to change this stance," they said.

In the United States, they added, while the timing of a full-scale recovery for the fine jewelry market remains uncertain, a relatively strong first quarter, amid other factors, makes the company more attractive as an investment.

This is more good news for all of us, as the stock market crash last fall saw even the blue chips of our industry tumble. This onset of renewed interest is grounds for good cheer, signaling that the very bleakest times may be behind us.

Hats off to Signet Group Chief Executive Terry Burman, Sterling President and CEO Mark Light and the rest of the team in the Akron headquarters and the 1,401 stores across the country.