||Rebound Continues for Jewelry Sales
For the third year in a row, retailers who took National Jeweler's year-end survey said they had a strong year that ended with a solid holiday, with 64 percent of respondents reporting year-over-year gains in same-store sales in 2012.
While the numbers show business is definitely improving, it is not getting any easier. Retailers say they have to work harder -- and smarter -- every year to continue to post even modest gain in sales.
"The good years, the happy years, are gone, the years of people coming in and saying 'I'll take this and this and this,'" says Udi Sandalon, who co-owns Sue Sandalon Jewelry Design in Atlanta with his wife. "We have to work for a living now, and we have to work for every sale."
The difficulties of the business today, coupled with ongoing economic uncertainty and instability, make retailers wary about the future: They are not pessimistic, exactly, but they aren't overly enthusiastic either.
When asked about their outlook for this year, 66 percent of the 188 survey-takers said they were "optimistic" about 2013, though the greatest percentage of those, 46 percent, fell into the "somewhat optimistic" category.
More retailers checked the "uncertain" box (27 percent) than the "very optimistic" box (20 percent).
Marie-Helene Morrow, owner of Reinhold Jewelers in Puerto Rico, said she would count herself among the optimists in 2013, but that's more due to her self-reliant attitude than any faith in the economy.
Morrow was in New York City on Monday, making the trip from her island home to generate ideas for her business by checking out some of the city's high-end retailers and meeting with industry colleagues.
"There are a lot of people that are not (optimistic). I find that when that happens, I go deep into myself for more innovative thinking to make things better in case the economy goes south," she says. "I know I am doing my due diligence and I am working harder because I hear a lot around me that is not optimistic, and I can't let it affect me or my business or the 110 people who work for me."
Only 7 percent of those polled described themselves as "somewhat" (5 percent) or "very" (2 percent) pessimistic. Billy Hammock, owner of Creative Jewelers in Florence, Ala., falls into this category, mostly because his store is in a town where the federal government is the main employer.
He's nervous about the impact spending cuts will have on his customers' budgets. As of early April, the store had one engagement and two anniversary rings on hold while their potential owners determined how much of a pay cut they were poised to take at work.
"That'll make a small difference," Hammock says facetiously. "We are keeping our fingers crossed."
Strong holiday season, year
While current political and economic realities make it difficult for business owners to be overly optimistic, 2012 was a strong year as compared with 2011. The majority of retailers reported the same or greater same-store sales for both the holiday season and the full year.
During the holiday season, defined as the months of November and December, the greatest percentage of those surveyed, 18 percent, reported that their same-store sales were up by more than 20 percent.
Fifteen percent reported a sales increase of greater than 10 percent while 14 percent saw a sales increase in the 1 to 5 percent range.
Retailers also experienced better margins during the holiday season, with 39 percent reporting that margins were up. And 41 percent said they either didn't have to discount quite as much this holiday season in order to move merchandise (22 percent) or that they don't discount at all (19 percent).
All told, 70 percent of those surveyed said their holiday season 2012 results were the same as, or an improvement over, the previous year.
For the full year, 74 percent of jewelers reported that sales were flat or up as compared with 2011.
The greatest percentage of survey-takers, 21 percent, said their sales increase for the year was between 1 and 5 percent. Seventeen percent said sales rose more than 10 percent and 13 percent reported sales gains of more than 20 percent and of 6 to 10 percent.
In the town of Bellevue, Wash., Steve Goldfarb, of Alvin Goldfarb Jeweler, says he did solid business up until September when suddenly, and rather inexplicably, sales dried up.
"We had a good year in 2012, just a very steady year, basically all the way through August and then September was weirdly bad, like ghost-town bad," he says.
The store then went on to have a solid October and November and a "tremendous" December, Goldfarb says. He says that he is somewhat optimistic about this year, knowing that 2012 was good for his store and he'll have to work very hard to have a modest increase over last year.
He adds that for the last couple of years he has stuck to his budget religiously when attending the large industry trade shows such as Baselworld and the shows in Las Vegas, often spending even less than he allotted himself.
"I've just been a little bit more careful," Goldfarb says. "If I don't love it, I don't buy it."
Silver, custom, diamonds shine
Product categories in which retailers reported the greatest sales gains during the holiday season were silver jewelry (66 percent reported slight or significant sales increases), in-store, custom-designed benchwork jewelry (65 percent) and loose diamonds and diamond jewelry (48 percent).
This held true at TJ's Fine Jewelry in Carbondale, Ill., where owner T.J. Martin reported strong sales in all three of these categories. "We do quite a bit of silver as far as the gift-giving goes," he says. The average ticket for a silver piece at his store is $200 to $300.
Custom does well, as does bridal. Martin says that the average ticket for an engagement ring at his store is $5,000 to $6,000. The majority of rings they sell feature round or princess-cut center stones with pavé bands in white gold.
The categories that posted weaker year-over-year sales gains for the holiday season were karat gold jewelry, with only 26 percent of those surveyed reporting that sales increased, pearl jewelry (22 percent) and platinum jewelry (18 percent).
Retailers interviewed commented on the mercurial nature of pearl jewelry.
Glenn Hoover, owner of Hoover Jewelers in Clay Center, Kansas, says in his area, people's attitude toward the gemstones change from year to year. When former first lady Barbara Bush wore pearls, everybody in the small, conservative Kansas farming town wanted them. Other years, there's no interest.
"Pearls, they come and they go. One year, you'll have a run on them and then the next year, nothing," he says.
"But, then again, I am in a small town. So if I sell two of anything, I just flooded the market," he laughs.
Eddie Guerboian, a fifth-generation jeweler and president of Readers Fine Jewelers in Santa Monica, Calif., said pearl sales at his store have been on the decline for the past five years, except for the occasional sale of a pair of pearl stud earrings.
Goldfarb says pearl jewelry sales were down year-over-year at his store, a drop that was disappointing. "I really like pearl jewelry," he says. "(But) I think it's jewelers; we always go to what's easier to sell."
Trying out Pinterest, Instagram
The survey shows that many jewelers spent the same amount on marketing during holiday season 2012 as compared with 2011. The results also show that retailers began branching out into relatively new spheres of social networking.
When asked about their marketing spending as compared to the previous year, 39 percent of those surveyed reported that it remained unchanged while 26 percent said they spent more and 17 percent, less.
A store's website remains the No. 1 marketing tool for retailers, cited by 75 percent of respondents, down slightly from 80 percent last year.
Facebook came in at No. 2 at 71 percent, down from 77 percent last year, while email marketing was No. 3, chosen by 57 percent of respondents, up from 54 percent last year.
Two new social media tools included in the 2012 survey -- the photo-centric sites Pinterest and Instagram -- accounted for a total of 27 percent of responses, used by 21 percent and 6 percent of survey-takers, respectively.
Interest in other, now older -- a relative term in the social media world -- sites declined year-over-year. Use of Twitter was down from 27 percent last year to 17 percent this year. YouTube use for marketing purposes fell from 13 percent to 7 percent.
At Reinhold Jewelers, Morrow says they use all of the above-mentioned tools and find social media to be a very effective way of communicating with customers, provided retailers don't try to turn it into a constant advertisement for their business and the jewelry they sell.
"It is not just a merchandise page. It's a personal page of what the company stands for, what the brand stands for," she says. "Every day I open my eyes and I have a quote of the day. I try to inspire people."
At Readers, Guerboian says his son is part of the business now and handles the store's social media, which he admits is effective.
Recently, though, he says there have been an increasing number of young men who purchased engagement rings and then returned after purchase to introduce the staff to their fiancées. It's a sign that, perhaps, people are finding themselves missing the person-to-person contact that social media simply can't provide.
"Younger people are going back toward wanting relationships, toward wanting to talk to people face to face," he says. "They come in just to say 'hi.' That's something I noticed that say, three years ago, (wasn't happening). It's turning around."
(Source: National Jeweler, 04/09/13)
Click here to email to client
Back to Radio Sales Today
Click here to view Job Postings.
Upcoming Webinar: Digital Dimes Develop Decent Dollars -- Opportunities Beyond Banner Ads
Digital dimes are adding up to significant dollars for media that focus on one simple concept: Good marketing reflects shopping patterns. In this timely webinar, Brian Foster, Vice President of NextMedia 360, will present a different look at selling digital that has created success for NextMedia.
Focusing heavily on solutions, Brian will walk you through the process of creating a digital division that not only creates exclusive digital revenue, but helps drive more radio sales. Joining Brian will be RAB's John Potter.
This webinar will be offered on Tuesday, April 16 at 10 AM, and again on Thursday, April 18 at 3 PM. For registration information, click here.