Lifting Heavy Metal in 2011 - Freshley Digital

The biggest challenge in 2011 for most of our stores is how do I stay lean and still attract higher ticket consumers. The US economy is clearly on the mend. We have stores meeting and in several cases exceeding 2005-06 sales levels to all time highs. Rolex sales in leading cities across the country are coming back strong. We are also seeing larger diamonds back in play with 2, 3 and 4 carat diamonds starting to see more activity. On the lean side, three years of retail struggle has shrunk store inventories, especially on the high end and redirected cash flow to lower priced inventory and gold buying. Brands like Pandora have exploded, putting consumers in stores, but lowering the average sale. Now these are not bad things, in fact we will look back at Pandora years from now and say it was a watershed brand, bringing customers into jewelers when almost nothing else was. We’ll take it. But man does not live on beads alone. We live on rocks, big, beautiful, shiny rocks….diamonds. The bigger the better.

Listen, the lessons of the last three years must not be forgotten, and most of you still need to do a much better job of price pointing your stock, restocking fast sellers and actually acting like smart retailers. Look, if you are not turning your inventory you’re not turning a profit. The key to that is buying smart and at defined price points consumers can actually afford. This process must continue and yes improve.

Now there is the dark side of that business model however. If inventory turn is all you are after than inevitably it leads to a store full of predictable, safe, boring inventory all priced between $199 and $1295….and thats….”thats Jared!” Is that your role in your marketplace or are you the store for the good stuff? As higher end consumers continue to grow more active this year, what do you have to get them excited about? Frankly, many of the stores I’ve been in in the last month or so are looking pretty boring. How do you sell a 3 to 5 carat diamond if you don’t even have one to show? Believe me that guy is going to come in your store, maybe next week, and he’s going to walk back out and not say a word.

Up Market and Down Market simultaneously

So what’s a jeweler to do? Do what Tiffany, Smyth and every other jeweler who has reached Super Store status has done. You must go up market and down market…at the same time! You must own every price point, offering the best possible product at every price level. It seems like a contradiction, but you are in a constant battle against threshold resistance. Most people just assume everything in your store is too expensive. When they see you offering a compelling price point, they have to question their own assumptions. Conversely, the affluent client assumes that you have that $20,000+ piece and his concerns are selection , cachet and value ( could he get a better deal in NY for example). My big concern as we go into 2011 is that many of you are way too thin in higher end goods, and that mean lost sales and lower average tickets.

The Right Partner

You need a couple of strong partners on the high end. Even one vendor, the right vendor, can have explosive results. In late 2009, in the bottom of the recession, Steve Williams, of Williams Jewelers in Denver, partnered with Hollywood designer Michael Barin. They started with some memo and a private trunk show and what started as a trickle turned into a flood. In the last twelve months alone Michael Barin has added almost one million to Williams volume!

Legendary brands can have the same effect. During the last couple of years, both McCaskill & Co in Destin, FL and Thom Duma in Warren, OH added David Yurman.

In both cases the brand increased store traffic and volume significantly. While Yurman isn’t technically what I call heavy metal, it is America’s leading luxury brand and is attracting the right, affluent consumers. The added benefit is that scaled and price pointed from $200 to $20,000.

Here are some other “heavy metal” partners for you to consider:

Julius Klein
Henry Barr
Norman Silverman
Henry Daussi
Kwiat
John Buechner

Every store in our group is different, and each will work and fit differently with any one vendor. As we all know, that relationship is like alchemy. But if you can find a heavy metal supplier and build a solid working relationship, you won’t have to own your high end pieces. Almost none of the larger stores do. Its all memo. These suppliers all want well rated jewelers they can build a relationship with. They want stores that will make their line the focal point of their high end efforts. You need one of these firms behind you or you will never grow beyond neighborhood jeweler status. You won’t build your high end client base. You will never grow your average ticket. You won’t make those big sales that make you the talk of the town and THE store to shop.

This could be a great year. Well run stores in our group could see 15-20% growth again this year. But it won’t happen if we’re not building ALL our business categories. As you continue to fight for customers on the low end, don’t forget the high end. Start lifting some Heavy Metal. Have a plan and a partner, and this will be your biggest year ever!