The 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.