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.

Stuller diamonds? There’s an app for that

The following is reprinted from National Jeweler

By Teresa Novellino

June 15, 2009

Stuller's "Live Diamond Try-On (brought to you by Red Box Diamonds)" iPhone application allows users to pick out a diamond engagement ring, try it out for size using an image of their own hand, share the image with friends and find a jeweler to buy the ring from.

Stuller's "Live Diamond Try-On (brought to you by Red Box Diamonds)" iPhone application allows users to pick out a diamond engagement ring, try it out for size using an image of their own hand, share the image with friends and find a jeweler to buy the ring from.

Las Vegas–Stuller has partnered with Gemvision Corp. on an iPhone application that allows users to pick out a diamond engagement ring, try it out for size using an image of their own hand, share the image with friends and find a jeweler to buy the ring from.

IPhone users can choose from among thousands of downloadable applications that allow them to use their phones while on the go to do everything from play video games to manage their money to get workout tips.

Soon to be added to the list is the diamond ring application unveiled by Stuller during the Las Vegas jewelry shows, which is called “Live Diamond Try-On (brought to you by Red Box Diamonds).” The application will be offered for free to iPhone users beginning in late summer via the iPhone store, said Kerry Hand, Stuller’s executive director of marketing services and public relations.

Hand and Ryan Koning, director of advertising, communications and events for Gemvision, demonstrated how the program will work.

The first step is to use the iPhone’s touch screen to go to the application, which then prompts a user to choose a diamond by carat size and shape, and then a mounting by precious-metal color, either white or yellow. There are a limited number of ring styles currently available through the application, but these include classic styles and additional choices that feature side stones.

After the user has made a diamond and precious-metal color selection, it’s time for the try on. The user then takes a picture of her hand using the iPhone camera. Then, using the iPhone’s touch screen, the user can position the ring onto the picture of the hand, adjusting for a perfect fit. The iPhone can also be held directly on the hand with the image tilted to enjoy the “sparkle” of the diamond image.

The image of the person’s hand, with the chosen ring, can now be e-mailed to friends and family, posted on Facebook, Twitter, etc.

At this point, the iPhone user can also track down where to find the ring through the “find a jeweler” function of the Live Diamond Try-On application, which uses the phone’s GPS function to pull up Google maps and place virtual pins on the nearest Red Box Diamond Jewelers, ranking each one selected based on proximity, Hand says.

“This is the beauty of the application. It drives consumers to dream big and them pushes them to spend big with Red Box Diamond retailers,” Hand says.

The new application is one of a number of new programs Stuller is offering that are designed to let jewelers take advantage of digital technologies to give consumers expanded options. During the JCK Las Vegas show, Stuller also unveiled the Virtual Diamond Selector program, which allows retail jewelers to go online with customers to choose from 10,000 diamonds by size, shape or color, and the Customized Earring Program, which provides retail jewelers with the chance to customize a pair of diamond earrings exactly the way the customer wants them.

Another new option, Stuller’s 3D Ring Engraver, allows retail jewelers to personalize a wedding band while sitting in the store with their customer, who can choose a unique message and a particular font, and then get a dynamic 3D preview of what the ring will look like once it is inscribed.

Jewelers who are interested in being part of the iPhone application must be Red Box Diamond jewelers. For details, contact Stuller via e-mail at info@stuller.com or by calling (800) 877-7777.

Boyajian: Jewelers must change to survive

Bill BoyajianThe following article is a reprint of an article in the National Jeweler written By Teresa Novellino June 03, 2009

Las Vegas–The economic downturn, which has sent jewelry sales skidding downward for the last few quarters, will leave permanent marks on consumer behavior and the retail jewelry business going forward, an industry veteran told attendees of the JCK Las Vegas show.

“If you’re going to continue to do retail the way you’ve always done retail, you’re going to fail,” said Bill Boyajian, industry consultant and former Gemological Institute of America president, speaking at a breakfast keynote session on Saturday. “No one is going to emerge from this recession unchanged.”

Boyajian said he often hears jewelers say they wish things would get back to “normal,” but the reality is, they will have to adjust to a new normal. Late last week, developers placed the project he himself had spearheaded–the 2 million-square-foot World Jewelry Center in Las Vegas–on ice because of economic conditions, serving as yet another example of how the recession has cut across the industry, hurting both mom-and-pop operations and large-scale projects alike.

On the retail level, the economy has only intensified industry consolidation: Over the last several years, 500 to 700 jewelers have gone out of business annually. Last year, some 1,400 retailers closed their doors, and there are predictions that the figure will rise to 2,200 this year, Boyajian said.

Meanwhile, manufacturers are losing business because retailers aren’t buying, and a growing number might turn to retailing themselves to stay afloat.

“I predict the next wave of jewelry retailers will be designers and manufacturers,” Boyajian said.

Echoing a theme that emerged in numerous other seminars held during Jewelry Market Week in Las Vegas, Boyajian said retailers need to get a better handle on their stock through some type of inventory management system that will allow them to make smarter merchandise decisions and ramp up sales.

During the current economic downturn–and afterwards–jewelers should promote their custom and repair services, as well as the bridal category, deemed one of the most recession-resistant categories in tough times.

And although many more jewelers have created Web sites for their stores– evidenced by Boyajian’s informal polling of the audience–they also need to make sure their Web sites are up-to-date and reflective of the type of image they want for their stores, he said.

“The Internet has changed the way people think about purchasing,” Boyajian said, pointing out that younger people, especially, go online to do research before they buy anything.

Jewelers also need to provide leadership for their staffs and hold staff members up to higher standards. In a tough job market, there’s “never been a better time to hold people accountable,” he said.

Another way to distinguish your business is simply to keep a positive attitude.

“The number one hindrance to growth is a self-limiting mindset,” Boyajian said. “Never limit what you can be personally. You need a unique angle to succeed today. Differentiate yourself and your business.”

He also suggests taking advantage of this slower business period to do some networking at the local Rotary Club or Kiwanis Club.

Above all, the one thing that jewelers need to remember is that their product differs from other retail categories because it is often a symbol of celebration, and love.

“We’re selling happy things to happy people,” he said.

Pop Culture: Turn Trends into Transactions

gossip girlThe economic downturn has meant jewelers must buy smarter and better than ever before. At her JCK Las Vegas session, “JCK Style: What’s Hot and Why You Should Care,” Jewelry Information Center spokesperson Helena Krodel will provide much needed insight on how to turn hot trends into transactions for your store.

To prepare to buy right, and for the right trends, Krodel says to consider key fashion influencers, such as:

* Pop Culture: Television shows like Gossip Girl, which follows the lives of privileged young Manhattanites, are gospel to fashionistas.
* Top Influencers: New First Lady Michelle Obama has brought fashion back into the White House, influencing what people wear (and where they buy it).
* The Eco/Green Movement: Consumers with a conscience continue to push for more environmentally-friendly and organic products, including jewelry in an effort to Recycle, Reduce, Reuse!
* Technology and the Internet: Even if you’re not ready to jump on sites like Facebook, you need to be aware of how the latest web technologies are influencing consumers — and enabling both positive and negative information — to travel instantly. As a challenge, check out how to Twitter!
* Fashion Sources: Traditional media like bridal and fashion magazines continue to influence consumers and have been joined by fashion-focused Internet sites like Style.com.

Take The Tip:

* Attend Helena Krodel’s presentation: “JCK Style: What’s Hot and Why You Should Care” at 11:00 a.m., Thursday, May 28.
* Visit www.jic.org for more insight on trends.

Pantone’s color seers say earth tones for fall

This is a reprint of an article in National Jeweler May 14th, 2009 written by Catherine Dayrit

Just Like You Design citrene ringNew York–Each season, the world-renowned color experts at Pantone release a report detailing the palette of hues that fashion designers expect to be indicative of the season. And for fall, designers are placing their bets on a rainbow of earth tones, from true red and deep orange to vibrant blue.

“The fall 2009 palette is more unique and thoughtful than the typical autumnal hues of years past,” Pantone Color Institute Executive Director Leatrice Eiseman said in the report. “Designers recognize the desire for fundamental basics that speak to the current economic conditions, but also understand the need to incorporate vibrant color to grab the consumers’ eyes and entice them to buy.”

Among the top 10 colors designers identified as the most directional hues for fall are: “American Beauty,” a balanced, true red; “Purple Heart,” a jewel-tone purple; “Honey Yellow,” a warm, more subdued version of the sunny “Mimosa Yellow,” Pantone’s 2009 Color of the Year; “Burnt Sienna,” an earthy shade of orange; “Rapture Rose,” combining the vibrancy of fuchsia and the softness of pink; “Warm Olive,” a rich yellow-green; and finally “Majolica Blue,” a deep teal.

Helena Krodel, spokeswoman for the Jewelry Information Center, says that what these trends mean for jewelry is a proliferation of large gemstones in earth tones or rich deep colors. The stones will be combined with chain-links or charms in precious metals, making for oversized statement necklaces.

As for basic colors for the season, designers surveyed by Pantone selected “Creme Brulee,” a grayed-down beige; “Iron,” a grounding color somewhere between brown and gray that coordinates well with all colors in the palette; and “Nomad,” which serves as a bridge between the beige and light gray.

Such tones serve as an ideal canvas for jewelry, whether that means sticking to the monotone look with one of the all-metal statement necklaces that will be big for fall, or selecting colored gemstones with intense hues that pop.

Leatrice says that of the 10 colors, the neutral Iron received the highest rating from designers, a choice that points to practicality.

“Designers are very aware that consumers are conscious of how they’re spending their money,” she says. “They want something very consistent.”

She also adds that over the last few seasons there has been more of a trend toward “trans-seasonal” dressing, in which apparel and accessories can be used from one season and into the next, so trends linger and aren’t thrown out the door quite so quickly.

“If you love something, it’s a shame to hang it in the closet,” she says.

And that goes for jewelry too. While precious stones tend to be pricey, perhaps making for an initial barrier at the sales counter, their classic nature helps to make them pieces worth investing in, items that can be worn time and again.

A great article from Abe Sherman of “Big”

Evolution of our Industry

by Abe Sherman

A crisis requires an immediate action plan.  You work through a crisis: you rebuild the house after a fire; you rebuild the city after a serious earthquake.  We approach the crisis as having a beginning, a middle and an end-the light at the end of the tunnel, and we push through to emerge on the other side, knowing that we can rebuild it, we will rebuild it.  In our industry, we have been addressing our current “issues” by applying crisis management.  We cut our expenses, lowered our inventory and we are looking to introduce new merchandise that might address otherwise missed selling opportunities by attracting a new customer base.  By taking these steps, all necessary by the way, we feel as if we are doing what we need to be doing to work through this crisis.

There are two things we cannot know at the beginning of any crisis:  How long will this last and what does it look like on the other side.  While our industry is indeed at some point on the timeline of the crises (actually, more than one in my opinion), we can only guess about how long they will last and what our industry will look like on the other side.   That said, I don’t believe that we are merely dealing with a series of crises-I believe our industry will continue to shake for many months and perhaps years to come, just as the aftershocks of a serious earthquake.  I believe this will be the time we will look back upon as the beginning of significant evolution.

Expect business as usual to look very different in 5 years.  Banking related issues such as terms, memo and stock balancing may all be endangered species as our industry evolves.  Marketing and advertising will have to consider enormous changes in demographics as the boomers retire and Millennials emerge (an even larger mass of humanity than the boomers). And this new group doesn’t read the newspaper or listen to the radio, they Tweet. They text. They post on Facebook. Every one of them has an IPod with 12,000 songs that they downloaded for free. They are connected 24/7 in ways that we, as an industry don’t even understand yet, let alone have addressed. I am not talking about advertising differences here; I’m talking about life style, life stage and two huge consumer bases.  The former defined us for the past 50 years and the later will define us for the next 50.  I’m talking about evolution.

I believe the changes that emerge will require a level of cooperation and transparency unlike anything our industry has ever experienced.  Retailers will have to open up and communicate with their suppliers and suppliers will actually have to listen.  Merchandising (an art form largely undervalued in our industry for the past two decades) will have to have a new found respect and merchandisers will emerge once again as having value.  Brands, whatever that really means in our industry, will have to work cooperatively with their retail-partners or they will go extinct.  The entire industry will have to learn how to manage their inventory and stop thinking of it as an asset!

These are the times when the earth moves, when mountains are formed, when there is a fundamental shift in the landscape-and it never goes back to the way it was.  The JCK panel discussion “The Evolution of Our Industry” was conceived around the notion that the jewelry industry must evolve, like it or not.  Ready or not.  Many stakeholders in our industry are feeling the pain of the early rumblings of these changes, but like all other evolutionary cycles, what emerges should be more efficient.  While we work through our own crises, let’s keep in mind that these issues are not likely to be short lived and that while one eye is working in the present, let’s keep the other focused on the future.  After all, there are 86 million Millennials who would like you to be their jeweler.

If you will be in Vegas, please join us to hear the views of some of our industries forward-looking stakeholders as we address these issues.   Ken Gassman, president and founder of the Jewelry Industry Research Institute, whose research is published by IDEX Online, will be the moderator of this panel.   Panel includes:  Phyllis Bergman, CEO of Mercury Ring, Kathy Corey, VP Merchandising at Day’s Jewelers, Richard Fields, Chief Strategic Officer at Unique Settings, Mark Michaels, Secretary and Treasurer of Michaels Jewelry, Nehal Modi, CEO of Gitanjali USA,  Abe Sherman, CEO of BIG and Ron Spurga, Vice President of ANB Amro.

Trend Blitz: Affordable Jewelry

Costume jewelryOne of the best effects of the current costume jewelry craze is its impact—or lack thereof—on the wallet. Designers are eschewing precious metals and gemstones for non-traditional materials like textiles and wood, driving prices down in the process. In fact, some of our favorite jewelry labels at the moment are some of the most affordable we’ve found in a long time, proving that you don’t need to spend a lot to make a statement.

Maria Lau
Since graduating from London’s Royal College of Art in 2003, Maria Lau has gained a following for her intricate pieces made from materials normally found in clothing. Her most recent collection, “A Skin Less Ordinary,” takes root in the aesthetics of Masai jewelry but has an effect that’s far more ethereal than you’d expect. Nude stockings are braided, twisted and knotted with strands of semi-precious stones to create regal neckpieces and headbands, while magnetic hematine minerals are used to create long, layered chain necklaces. Select pieces from the collection are available at kabiri.co.uk , starting at $75.

Sabrina Dehoff
Sabrina Dehoff is best known for her knotted cord pieces, which are reminiscent of the drawstrings on a hooded nylon parka. This season, she’s taken her collection’s urban wilderness theme even further, adding natural materials like spruce, perch, oak and plum woods. The rough, outdoorsy feel of the collection is balanced out with 23k gold plating and Swarovski crystal accents, which glam up a series of pyramid stud earrings, floral-shaped brooches and tiny pendants in the shapes of woodland creatures. The collection can be found at Opening Ceremony, where most prices are less than $250.

Johanne Mills
A former creative director for Donna Karan and consultant for everyone from Matthew Williamson to Bulgari and W magazine, it’s no wonder that Johanne Mills’ eponymous jewelry line is as eclectic as her résumé. Her collections combine graphic shapes, unusual raw materials and an arts and crafts sensibility, with most pieces hovering around the $300 mark. A pair of sleek drop earrings is made from onyx discs and brass tubes, while a cheerful bib necklace is crafted from looped silk cord, dotted with triangular studs in calcite, adventurine and metal. Yoox.com and Kabiri.co.uk carry a diverse range of Mills’ creations.

—Erin Magner

Reprinted from the JC report. An excellent source of information on the fashion world. http://jcreport.com/