Pompano Beach, FL—To paraphrase Mark Twain, are reports of the death of brick-and-mortar retail greatly exaggerated? (Left: G. Thrapp Jewelers in Indianapolis closed, but was reborn as Petite G after buyer Dana Friedman bought the business from retiring jeweler Gary Thrapp.)
In 2018, the jewelry industry did experience some growth across the board, and a fair number of new businesses opened for the first time. But overall, the number of manufacturers, wholesalers, and retailers still declined by about 4%, according to the Jewelers Board of Trade. A decline in brick and mortar stores in particular isn’t new news, but there are a number of interesting things to consider as one looks at the industry landscape. Let’s look at a few of them:
1) Choice, not necessity. People aren’t going out of business for the same reasons they did during the Great Recession of 2008-2009. Most of the retailers we speak to are choosing to retire because they have reached that age and have family members who have chosen a different career and do not wish to take over the family jewelry business.
2) E-tailers and online sales are certainly increasing, but healthy brick and mortar stores are also doing well. I believe the future of the retail jewelry industry will be in the hands of those jewelers who have strong family businesses, manage their inventory well, adapt to today’s consumer, bring a great experience to the public, and continue to maintain and even enhance the trust factor in their community.
3) Jewelers going out of business leave an opportunity for those that remain. Look around your own town and count the number of jewelry retailers, both large and small, that have closed their doors. People who frequented these stores are going somewhere else to buy their jewelry. Market share is there to take if you are innovative, market savvy, and truly focus on your customers.
4) Options exist for those who want to stay in the game. Some jewelers are going in a new direction, sometimes with a store move because of a declining location or population. Some are becoming “by appointment only” jewelers. Others are doing online sales and working social media. Many have minimized inventory levels to retain capital.
Bottom line, there are plenty of options to consider, and it certainly challenges the jewelry industry’s almost-ubiquitous belief that the growth of e-tailing is killing traditional retail. While online searching, shopping, and pricing has certainly impacted some areas of mainstream retail, the death of it is highly overrated.
What is certain, however, is that e-tailers have shined a light on poorly orchestrated, traditional retailing, and this should be enough to get every jeweler’s immediate attention. Brick and mortar stores in general are not a liability—but tired and boring brick and mortar stores are not attractive to Millennials, Gen Xers, or even Baby Boomers today. Stores that look old, feel old, and lack innovation in both design and product are going to struggle.
I visit a lot of retail jewelers in my work and in my travels. I see very few stores that are exciting, inviting, and truly appeal to the senses. After all, we are social beings who crave physical beauty in both nature and man-made structures. It’s why we still go out to great restaurants, luxury movie theatres, hip concerts, and attractive sports venues. We want to soak up the experiences that have become almost the norm today. Am I preaching to the choir here?
So this begs the question, “What should we do with our jewelry stores?” We don’t have to spend a fortune to make them look nice, smell good, display product well, and appeal to customer senses to make them want to own and wear fine jewelry. Your staff is also a big part of that attractiveness. Some luxury experiences online actually are better than what many experience in a store because of the variables that exist and the inconsistency of salespeople.
Your store says a lot about you as an owner. Take a look around and see if you would buy in your own store, and see if there is any jewelry you would want to own and wear. Better yet, hire someone to come in and critique your store, lest you become one of those who are in business today, but out of business tomorrow.
The Gordon Co.’s extensive experience provides a wide range of services to maximize our clients’ return on investment of underperforming assets. We tailor our services to meet specific needs and achieve your goals. Our goal is to be your strategic partner to accomplish your stated objectives. Some of the primary services we provide and events we conduct for upscale retail jewelers include inventory reduction events, cash raising, retirement sales, store relocation events, strategic store closing, store consolidations, ownership transition events, going out of business, and more. For information, visit www.gordonco.com or call (800) USA-GEMS.