Diamonds

What's ahead for the year:

Jewelry Stores Anticipating Brighter Days Ahead

Radio Still Occupies a Key Role in Marketing Plans

With the 2009 holiday season now behind them, jewelers who have survived the year will find a weeded-out playing field and a consumer whose confidence will grow as the year progresses -- which means this year will be a time to look forward and not back.

Industry analyst Ken Gassman says there is "zero question" that 2010 is going to be better than 2009.

After hitting $61.6 billion in 2007 and then dipping to $60 billion in 2008, U.S. fine jewelry sales were anticipated to slide further, to an estimated $57.3 billion in 2009, according to U.S. Department of Commerce data.

Sales are expected to rebound to $60.7 billion in 2010, with the spoils of a slowly improving economic outlook going to a downsized group of industry survivors, according to the latest statistics.

As of October 2009, the number of retailers, manufacturers and wholesalers that ceased operations, consolidated or filed for bankruptcy was up 53 percent as compared to 2008, figures from the Jewelers Board of Trade show.

Jay Holtorf of I.W. Marks Jewelers in Houston understands consolidation firsthand: The faltering economy prompted the jeweler to shutter its Sugar Land, Texas, location back in May.

But Holtorf is also aware that he's heading into 2010 with a scaled-back list of competitors.

The three Bailey Banks & Biddle stores in the Houston area were all scheduled to close by the end of 2009, following the bankruptcy of parent company Finlay Enterprises Inc., which also operated the Carlyle & Co. and Congress Jewelers chains.

"I'm sure there will be some other independents that will not be around in 2010," he says.

Going forward, Holtorf plans to keep a close eye on expenses and to only stock best-sellers -- bridal, loose diamonds and watches.

"We're going to stay with the status quo and make our investment more in very traditional goods," he says.

One cutback that will be carrying over from 2009 is the store's advertising budget. Holtorf says the company has hired an outside advertising agency to help evaluate its ad spend, a move that has saved the jeweler 30 percent.

As part of the cost-saving plan, I.W. Marks reduced its print advertising budget and shifted its Radio advertising into more effective time slots.

David Peters, director of member services for Jewelers of America, says 2010 will be a year in which retailers will want to rely on updates of classic styles, and he says retailers shouldn't be shy about scooping up customers who may be seeking a new jeweler in the wake of the recession.

He says retailers should call fellow jewelers who are exiting the industry and ask how they can service their customers.

"Maybe it's a little bold to do that, but what are you going to do, hope those people accidentally stumble across you?" Peters asks. "Those days are long gone."

He also recommends retailers increase their outreach and broaden their scope, a strategy that Michael Zibman, general manager of Windsor Fine Jewelers in Augusta, Ga., employed in 2009.

The store upped its marketing budget to reach consumers in the small towns between Augusta and the larger cities of Charlotte, N.C., and Atlanta via print, Radio and TV advertising.

"Most people would think of Charlotte first, but we are as big or bigger than any jewelry store in Charlotte," Zibman says.

Windsor will continue this profitable strategy in 2010 and will also retain its identity as a store where the display cases are fully stocked.

"We've always been a store that has a lot of merchandise," Zibman says. "It's not so much a special-order business."

Windsor customers like being able to find the merchandise they are looking for on the spot.

At Baker & Baker Jewelers in Marietta, Ohio, owner Larry Hall says he survived 2009 through omnipresent marketing: The name of his 91-year-old store was everywhere, including in TV ads, at the town Christmas parade, where the jeweler handed out favors, and on a local Radio show, where Hall appeared as a guest.

In 2010, Hall's store will be delving into social networking by launching a page on Facebook and getting into Twitter. In addition, with the help of a newly hired Web expert, Baker & Baker will add e-commerce to its information-only Web site.

"We're excited about the electronic world," Hall says. "Social networking, that shows people you're connected."

Another plan for 2010, now that all of Hall's employees have an e-mail address, is to buy iPhones to keep employees in constant contact.

"I want them to be a little more connected than just at the store," Hall says. "They can get (e-mails) and respond immediately."


Tips for Jewelers in Tackling 2010
* Focus on personal contact and customer service, but use modern tools, such as e-mail and e-newsletters.
* Stock up on updated versions of proven sellers.
* Combine community outreach with environmental or social causes. Why not sponsor a park clean-up day or donate to the local soup kitchen or homeless shelter?
* Reach out to area jewelers who are retiring or going out of business to see how you can serve their former customers.
* Broaden the scope of your marketing. There may be consumers out there looking for a new jeweler just a few towns over.

(Source: National Jeweler, 02/23/10)

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