Gemvara keeps on flourishing!

Gemvara, the online consumer driven jewelry design website just announced a third round of venture capital investment. This time for 15 million! In the current environment, this represents that venture companies see something very big for Gemvara! Read More

The future of shopping

So think about this relates to the jewelry industry…. Think Boucheron.

Swagger Wagon

Social media takes some creativity. I think this is brilliant!

Ready for the Gen Y tsunami, jewelers?

This article is reposted from the July 21, 2010 edition of National Jeweler and is written by Jan Brassem.

Prepare yourself, jewelers. Here comes Generation Y (aka Gen Y), 74 million big-spending consumers, born between 1978 and 1995, who inspired a recent Gen Y Forum purported to be “the largest gathering of prestige marketers in North America.”

The forum’s official goal was to discuss the “characteristics, influence and brand affinities of tomorrow’s affluent consumers.”

In other words, the aim was to determine how Gen Y consumers make buying decisions–an ambitious task indeed.

In case you didn’t know, the 74 million Gen Y members purchase, directly or indirectly, $200 billion worth of goods or services a year, five times more than their parents did at the same age.

There are now more Gen Y members than there are baby boomers, and this demographic will represent 50 percent of the total U.S. workforce by 2015. Oh, did I mention that within the next five years, the Gen Y consumer will provide the biggest revenue source for any industry you can name?

The forum consisted of 22 thought-leaders from diverse fields, including a bureau chief for The Economist, the publisher of Teen Vogue, the chief of digital marketing for Microsoft and a member of the U.S. State Department, among others.

All of these “rainmakers” agreed that Gen Y members are technologically sophisticated shoppers who were probably using computers before their first day of school.

The computer became the “training wheels” for this group, which is often called the “Internet Generation.” It was also clear among the forum leaders that the technologically adept Gen Y consumer would make purchasing decisions using high-tech tools.

In a nutshell, here’s a rundown of some of the important points discussed. (The college marketing students I teach will wrestle with the rest.) Much of the information discussed at the event is the result of extensive U.S. and international market research.

Speedy decision-making: “Business will be as usual, but much faster,” was a common theme at the meeting. Simply put, the shopping process goes something like this: They click, they browse, they buy. It will be the retailer’s responsibility to keep up.

Design trends: Product design can no longer be developed by committees, research teams or in staff meetings. Such groups take too long to reach consensus, and styles change too fast. What a company should do is develop a network of blogs and tweets to inform styling decisions. Besides being inexpensive, these interactive forums allow for speed and dexterity.

An investment: Gen Y consumers see luxury products as investments, not as indulgences. They do not have an appreciation for “trendy” styling, and favor more “classic” designs. When they purchase an item, they generally use it. (It will not be placed in a drawer.) They expect exceptional quality.

Parents as reference: These young consumers consider themselves to be “equal opportunity buyers,” with an unspoken motto that “We buy the same as our parents, except … we want more.” Heritage plays no part in design, styling or reference decisions. While their parents considered luxury to be something special, Gen Y consumers understand luxury as something that they deserve.

Bling is blung: Ostentation is clearly out, and subtlety is in. Gen Y jewelry consumers seek simple designs that are cool, hip and “in the know.” Some visual expression is important, but it is not key.

Purchase rationale: Gen Y consumers have a need to add an emotional rationale to their buying decisions. For example, when purchasing a pendant, the shopper requires–as a rule–an additional use for the piece. She wants to be able to wear it to work, and to a party.

Reference groups: Positive feedback, (real or imagined) from their reference group is arguably Gen Y’s most important decision criteria. Whomever their peer group is–be it colleagues, friends, or fellow club-goers–acceptance by that group will close the sale.

Sale vs. deal: Beware of putting items on “sale.” Gen Y consumers consider that word to be the radioactive kiss of death. They strongly prefer the word “deal” as a way to communicate bargains or price reductions. Getting a great deal sounds–to their ears, anyway–better than getting something on sale.

Blogs and more blogs: The new–and hopefully permanent–Internet-based marketing vehicle is the blog. The blog is inexpensive to set up and maintain and its uses are abundant. Almost in unison, the thought-leaders at the forum expressed the conviction that blogs were the marketing tool of tomorrow–if not today. To be a successful Internet “player,” your store or site should be called out on a minimum of 25 blogs today and at least 250 in the future.

For those who are not Gen Y members, your knowledge of technology may be strained. Mine was. It is our job to become current in this technology and understand the negative marketing implications if we don’t. Let’s face it, we could end up in the same category as hand-held calculators and in-store flyers.

Major advancement in online jewelry sales

This idea is a major move forward in the world of online jewelry sales. A  step in overcoming the anxiety of not being able to see and feel what you are buying on the internet. If this company can make these “samples” nice enough to really do the selling once received, this company has hit a homerun! If you are a brick and mortar only operation, it is time to take the internet seriously or buy some stock in Eternity Diamonds .

Alloy Samples – A Good Strategy?

Ostbye Signature Display

Ostbye Signature Display

Following article was published by Abe Sherman of the “BIG” group.

Link to Website

An increasing number of bridal manufacturers are selling alloy and CZ rings as samples to augment the jeweler’s bridal selection. Is this an idea whose time has come? There have been articles and blogs written about what has become known euphemistically as Brass & Glass addressing this issue. Some contend that this is a strategy that will undermine what a ‘fine’ jewelry store is supposed to be. Those speaking against the concept believe the potential damage that could be done to our industry would include allowing non-industry interlopers to swoop in and take over your bridal business. If they had ever worked behind the counter and walked a couple through the myriad issues concerning her perfect ring, I think they would realize there is little chance that the corner grocery store will be setting up a bridal department anytime soon…After the third or fourth messed up special order, they would ship the whole thing back and stick with selling melons.
Not too long ago, I would have thought this to be a bad idea myself. A ‘real jeweler’ should have an assortment of ‘real inventory’. But studying the realities of our industry for the past decade and getting down to what our issues are today, I have rethought this idea and believe that it is right for many, although not all, retailers.
As we all know, our industry has a cash flow as well as an inventory problem. Manufacturers, even more than retailers are being hit on several fronts:
1. Very slow payments
2. Few stock orders are being placed
3. Fewer still opening orders
4. Retailers reluctance to re-order fast selling inventory
Retailers are loath to introduce a new line, especially in a capital intensive area like bridal today. We must consider that much of their investment does not sell out of the showcases. Instead it needs to be special ordered for metal, color, head size or finger size. What we have is, in effect, a showcase of samples. They just happen to be “live” samples at a much higher price. The fact that these are ‘real’ samples, instead of alloy samples is the point of contention. I completely understand the arguments, especially from the sales reps and manufacturers who historically have walked out of an account with a $50,000 stock order: they believe this will kill their business.
Add to this that more JBT ratings are declining every week (3 is the new 2), and know the manufacturers are being pressured by their banks not to ship. Everyone is very nervous about making new sales, but they are more nervous about getting paid.
While I agree that in the short term, this will take a bite out of the potential incoming cash from the larger stock orders, the reality is very few jewelers are placing large stock orders anyway and the retailers are sitting on merchandise that continues to age. Having inventory isn’t the issue, jeweler’s showcases are chock full of inventory. But that inventory must remain relevant and ‘stock-balancing’ our way out of it isn’t a likely scenario.
Expanding your bridal selection by introducing alloy samples as a portion of your inventory needs to be done with a plan. It won’t be adequate to merely put these rings in trays to fill your showcases. You need to have separate displays, preferably that stand apart from your regular inventory, and have a well rehearsed script for your staff to use.
Some of the key points of using alloy samples are:
1. Significantly expands your bridal department selection
2. Investment in new styles costs pennies on the dollar
3. Immediate return on your investment (sell one ring, pay for 100)
4. Constant replenishment of relevant styles
5. Every ring is custom made for that client – a huge selling feature
6. Eliminates the Exit Strategy issues with branded lines that no longer fit your store
7. Customers can borrow samples to show “Mom”
8. Duplicate rings can be provided in alloy for travel
9. Cuts down on the need to increase inventory and therefore costly insurance
10. Makes outside Bridal shows far less risky
Johanna had some additional thoughts, so I’m adding these separately:
1) Alloy samples, particularly of styles that should not be sized, keep the jeweler from being tempted to do the sizing and mess up the ring. They force the jeweler to do the right thing and special order to fit.
2) Some categories such as eternity bands, really only make sense as alloy samples since they cannot be sized. If you stock live product you could never have the selection of styles you could with alloy.
3) If I were the retailer I would stock my sizable best sellers and have the rest in alloy. I think it can easily be explained to customers that for structural reasons, it is better to special order from the alloy samples.
Our sense of who we are as merchants, that the jewelry we carry defines us, will turn some people off to carrying alloy samples, and we understand this. But for those of you who are looking to expand your positions within the bridal department while keeping your investment low, this is a strategy that you might want to seriously consider. I believe this will be a part of most jewelers’ bridal inventory and if positioned correctly within your store, should significantly add to your bridal sales. Give us a call if you’d like to discuss which suppliers to use for this project.

More wisdom from Seth Godin

Risk and reward chartThe following is some wisdom from Seth Godin, who always makes sense to me. Seth Godin’s blog

It’s easy to to adopt the policy of avoiding risk at all costs, that whenever possible, the products you launch or the engagements you have should be flawless and without downside.
Here’s the problem: in most endeavors, a small increase in risk can double the reward. It’s the second doubling of reward that brings serious risk with it. But the first leap is relatively painless.
In the chart above, notice that going from point A to point B brings almost no incremental risk. It might feel scary, but rationally, it’s not. Doubling reward again from B to C, though, brings significant incremental risk. It’s this second doubling that gets you through the Dip, that leads to a breakthrough, that makes you remarkable.
But I’m not even talking about that. I’m just hoping you’ll warm up by making the tiny leap of avoiding all risk. Riskless is hardly worth your effort.