Despite major “headwinds,” independent jewelers’ sales have largely held up, if only slightly below pandemic levels, says the American Gemological Society (AGS) conference’s “360-degree outlook for 2023” panel. Participants agreed. Louisville, Kentucky, moderated by this author.
Sherry Smith, director of business development at Edge Retail Academy, said her stats show that while small and large independent store sales increased in the first quarter of 2023, $3 million to $600 million Midsize retailers, defined as $10,000, said they were hit. . Overall, independent jewelry store sales fell 3%, average order prices fell, and unit sales remained flat, she said.
“The good news is [during COVID] Jewelers showed very strong growth, but our company is still growing within the single digits,” she said. “And it’s something to celebrate.”
Gem Trade Commission chairman Eric Jacobs largely agreed, but said his statistics showed growing anxiety from the vendor community.
“As long as people maintain the discipline of inventory and innovation, they’ll be fine,” says Jacobs. But he warned: “The ability to raise capital is tight. The number of SME financiers who say they are tightening standards has increased by 30%.”
Holly Weche, owner of Weche Jewelers in Melbourne, Florida, said:
“2021 and 2022 were the glory days,” she said. “Now we have to get back to customer service and do some really hard work. Even some of my own sales team will admit that 2021 was a lot easier. Just sit back and take the money. People couldn’t travel, they couldn’t do anything else, and now we have to get serious about it.”
The challenge, he added, is “not to settle for the status quo and fall back into the old ways.” “The coronavirus has forced us to be creative and to step out of the box, and we don’t want to lose that.
“It’s easy to worry that people are reluctant to buy, or that consumers are looking at their stock portfolios. , we have a great story and there are a lot of people who still have the ability to buy it.
Smith agreed that the jewelery business has traditionally been slow to evolve, but the pandemic has awakened many. “Jewelers have become even more powerful with their online presence and digital identity. has become huge, and we hear from retailers all the time that they don’t have time, but when the economy is good, they have to do it, because even when the economy is good, the potential This is because you are paying a large amount of money to acquire customers while neglecting your sales.”
Wesche noted that her sales team does a fair amount of text sales. “They customize the video and we add music to it. We create videos for specific customers and send them with music, not just on social media. I am a little shocked.”
Weche’s new mantra is “client ring, client ring, client ring”.
She explained: “It’s about reaching out to customers, creating a reason to buy, and getting them excited about new products. For us, that was key to keeping pace.”
Recently, sales at in-store events have been very strong. “At a special event, people don’t think about gas prices or anything else. If they’re at the party and having a good time, sales go up. We are always looking to raise the bar for our events, figuring out how to do it.”
She also recommended that retailers leverage digital tools such as Podium, Apple Pay and Venmo. “It should be easy to send videos and get customers to pay,” she said. “They don’t have to call you with a credit card and then come to the store. We want a frictionless retail sales experience and easy payments are one of the ways she does it.”
As far as online is concerned, most luxury jewelry purchases are still made in brick-and-mortar stores, Smith said. Online sales of fine jewelery will decline in 2022 and now account for about 10% of the fine jewelery market, he said.
“When buying luxury goods, people want to touch it, try it on, and get instant gratification. Even the best jewelers have only 4% of their business online.”
Web searches for jewelry peaked in December, but declined on Valentine’s Day and Mother’s Day this year, Jacobs said.
“There are a lot of Shopify-level jewelry online stores popping up,” he said. “A lot of it is low-end stuff, but experience in other industries shows that when something like that happens, the potential for fraud increases rapidly. Fraud will be a problem because online stores are the vehicle for that.”
Smith said sales of lab-grown diamonds surged 63% in the first quarter, with unit sales up 107% and average retail sales down 23%. Sales of natural diamonds increased he 7% in the first quarter. Unit sales increased by 55%, but average retail sales decreased by 33%.
Ms Weshe said her store sells lab-grown produce, even though it doesn’t advertise it. “We had a lot of conversations with our staff about how they feel about this, conceptually, emotionally. bottom.”
She said most of her lab-grown customers tend to stay within their budget and opt for larger stones.
“Many consumers still don’t understand what lab-grown diamonds are,” she added. “Some people think it’s not real, it’s like a Louis Vuitton knockoff. And on the other side of the coin are consumers who think it’s great to get a two carat diamond.” .”
Her store has seen increased sales of lab-made fashion jewelry, she said. “In our store, the lab-grown and the natural coexist peacefully,” she said. “We have a lot of very wealthy female consumers who do their own shopping. They might buy lab stud earrings or tennis bracelets. So her ensemble mixes both. She sees it as a fashion item, which coexists in the collection in her mind.”
Smith agreed that lab-grown “isn’t going away,” and said manufacturers were bearing the brunt of recent price declines, and retail profit margins remained high.
she said: “Gen Z and millennials aren’t the only ones coming in for lab-grown stuff. Baby boomers are buying lab-grown stuff. They coexist, just as they exist.”
Jacobs said JBT has seen many recovery situations where “someone took a ton of lab-grown diamonds and didn’t sell them. . get them back. Vendors say ‘No, it’s depreciating’ and won’t accept returns. ”
Smith said diamonds tend to be the focus, but colored stones and watches are also doing well.
(Photo: Getty Images)
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