Changing market share in the new economy?

Jewelry Discussion
1

I see that online sales of jewelry and watches fell a whopping 22%
for the first five days of December as compared to last year, while
overall online sales were up 9%. The market got bigger but jewelry’s
slice of it fell on its face.

I think this is something everyone has to consider even if one
doesn’t sell online. You know the old saw about making lemonade, it
might benefit us if we look for the opportunity here. I’m not sure
what it is but I could put forth some speculations.

As David Geller so rightly assesses, merchandise is price based,
service is trust based. But don’t many consumers believe stuff is
cheaper online? If that’s so, what happened here? Is
trust(confidence, this is a crisis of confidence recession after all)
coming to the forefront in buyers’ minds? If that is the case what
can we do to foster trust on the part of buyers towards OUR
particular businesses/products?

Is jewelry suddenly a black sheep? Do shoppers have the emotional
response that jewelry is expensive so they won’t even consider it?
But online sales of music and movies fared even worse than jewelry
and that stuff’s not really pricey. Electronics went up 24% since
last year. This discrepancy really puzzles me. Does this mean they
will buy expensive but they have a changing set of requirements to do
so? Diamond earrings are now extravagantly frivolous but plasma TVs
have utility? That’s hard to argue with, but we should find a counter
to it. Maybe, “Buy it because you can”?

Stats on bricks and mortar sales will be really interesting to look
at when they are available. Will they see a similar pattern? I’m of
the belief that if someone makes the effort to come into your store
you have a much better chance of closing a sale because you can
interact with them in a way online sellers simply cannot. You’re face
to face, eyeball to eyeball…your chance to foster that trust, cut a
deal if that’s what it takes. Make it a personal transaction.

But how do we get them in the door? I’ll go back to the trust thing.
Repairs/service. Its not glamorous, its not sexy. But it is a
definite traffic builder and a revenue stream. If you take it in you
have TWO times at bat with every repair. Or do it while they wait if
you have a sales associate to ‘chat’ with them(and show merchandise).

There are price shoppers and quality shoppers. I’d say for now
accommodate the price shopper where you can but seek out the quality
buyer. Since most consumers don’t ‘know’ jewelry they have to base
their buying decision on their trust in YOU. So would it follow that
YOU are the critical factor?

These are just my off the cuff reactions, maybe somebody has some
other thoughts?

2 
Is jewelry suddenly a black sheep? Do shoppers have the emotional
response that jewelry is expensive so they won't even consider it?

I am afraid that one of the reasons that people buy jewelry is to
celebrate their prosperity. It is certainly not the only reason, but
it is a big one. I would suspect that this factor is going to hurt
the high end good stuff, but then, even cheaper things can be a
celebration of success to people who have lower expectations.

Electronics went up 24% since last year. This discrepancy really
puzzles me. Does this mean they will buy expensive but they have a
changing set of requirements to do so? Diamond earrings are now
extravagantly frivolous but plasma TVs have utility?

One thing about the big TV is that you enjoy it at home, while you
are NOT out doing something more expensive. Watching the big game on
TV costs a lot less than making a day of it and going to the stadium.
Staying home and watching a movie costs a lot less than going out.
Jewelry is much more conspicuous. What you do at home is much more
private. I have heard it suggested that loading up a better
electronics is a good way to make the most of a hunkered down life
style.

That's hard to argue with, but we should find a counter to it.
Maybe, "Buy it because you can"?

Absolutely! I am afraid that you are right that some people are
considering it poor taste to buy expensive displays of wealth, even
if they can, in a bad economy. It does not show much empathy for your
suffering friends and bankrupt neighbors to go flaunting some showy
new jewel. But things are only going to get worse if we just take it
for granted that we are in for a long, sorry, depressing period of
hard times. “Buy it because you can” might work for some people. I am
thinking more along the lines of “Refusing to participate in the
recession.” This makes it seem less selfish. So when they ask, “How
is business?” answer, “I am refusing to participate in the
recession.” You can say this even if business truley is bad, because
it expresses your intentions, which are good.

Meanwhile, even if the harvest is lean, it is harvest time. Back to
work!

Stephen Walker

3 
One thing about the big TV is that you enjoy it at home, while you
are NOT out doing something more expensive.

There will be always work for jewelers and electronics should be
looked at as opportunity. I just finished order for gold ipod case,
monogrammed and everything. Technology changes but people remain the
same. The desire to distinguish themselves from others, that’s what
will keep jewelers in business forever.

Leonid Surpin

4

I just returned from what was usually my biggest show each year for
the last several years. It certainly was not this time.

I seemed that products that are perceived as “traditional” fared
quite well - such as soaps, wood, weaving, pottery, toys, etc. and
those percieved as “modern” had lower sales - most of the jewelers,
photographers, contemporary painters, etc. Even the fudge maker had
to take inventory home.

Attendance was down 8% and this was with the heaviest advertising
the show has ever done.

A show the week previous had an attendance drop over 50%.

Any other recent show experiences/observations?

L.J.

5

Hello L. J.

Attendance was down 8% and this was with the heaviest advertising
the show has ever done. A show the week previous had an attendance
drop over 50%. Any other recent show experiences/observations?

This is very consistent with my personal experience. Early Christmas
season sales were way down, despite extra advertising. Now sales are
closer to their normal levels for the past week compared to previous
years, but still somewhat lower. Buying patterns, so far, are most
similar to 2001.

I am trying my best to not participate in the recession. Take it one
customer at a time and one opportunity at a time. We are in the
midst of a huge shake up. Along with the loss and pain there are
going to be new opportunities, as there always are. Just be open to
new possibilities and try to relax enough that your decisions are not
driven by panic.

6 
I am refusing to participate in the recession.

You know, for a few days after I read this I thought it made a lot
of sense, don’t knuckle under to a sour state of mind, project a
positive vibe and all that.

But as time comes and goes and the customers pretty much don’t, I’m
feeling more that this new state of things(how’s that for
non-negativity? I coulda said recession) is very real and may be
unfortunately the way its going to be for a while. How long? Don’t
ask me, I only work here. I’m told its worst here in the northeast.
But these things roll around the country so other regions may feel it
more acutely soon.

So, what to do, what to do?

My biz motto is to always serve your customers’ best interests.
Obviously their interests are changing. They may change several times
before things settle down. I think styles may move to more sedate and
classic, showy stuff will be much harder to move, at any price. But
some clients will swoop up the wild buy on glitz. At the moment I’m
sitting on too much glitz, mostly paid for glitz. It needs to become
cash. I’m thinking maybe divest myself of fancy styles and restock in
a softer look. Sentimental pieces may become more important as we
look to soothe truly battered consumer confidence. That means things
like add-a-pearls, birthstone jewelry, engraved goods, basic but
stylish chains. Things that are very personal in a positive way.
Keepsakes that don’t bust the budget. If someone knows how to
research popular styles from the depression it might give us all a
clue. Modernize the basic parameters.

I’ve already heard my share of local horror stories, people losing
their savings, their jobs, their pensions. It seems to cut a wide
swath through the classes. There are probably some bright spots,
niches that will still be healthy. The trouble with being overly
niched is that it only takes a shock to that group to cause you big
trouble because you have no alternate sources of customers. Being
diversified is good. Look at all those victims in the Maddoff thing.
Smart people went against conventional wisdom and put all their eggs
in one basket for the promise of maximized returns. Maybe the way to
maximize is to diversify.

The challenge as I see it, is to figure out what specifically is
going to work as far as goods and services go. Resetting and
redesigning allow the customer to invest in something they hopefully
still have some faith in…themselves. Lowering price points on new
goods while still maintaining some respectable level of quality is a
challenge worth pursuing. Difficult though.

Another lesson buried in the maelstrom is that of debt. Who’s in the
most precarious position? Those who are burdened with debt and
suddenly face a downsizing of their income. Personal or commercial.
Cashflow problems give you ulcers. I know that feeling very well.
What I refuse to participate in is ulcers.

I dunno though, I’m just wondering aloud. I’m no business maven. If
I was I’d have been retired by now.

7

My philosophy is to keep working and take care of those in front of
me. In practical terms I am not going to spend unless I have an
order, I am discounting to make a sale more attractive and keep some
cash flow, and at the same time listen to my market more closely and
still not loose my point of view for my art.

I get nervous but that is an internal problem of mine and not
necessarily reflective of reality. Besides, what the hell else would
I do? I have to make jewelry. I have to eat and dream, those two
things are sometimes at odds but that’s not new.

Sam Patania

8 
So, what to do, what to do?

Sometimes it’s the littlest things that really can build a business.
Build a relationship, go the extra mile, show that you care about
them as people and don’t just see them as customers. The attached is
worth watching.

http://www.simpletruths.com/simpletruths/a.aspx?af=219&mo=stsr

Mark