The JA Report: News, Tips & Trends from Jewelers of America

Check Your Business Temperature

Attitudes, including those of consumers, have definitely improved since the start of 2010. But while things appear to be improving, but there are also indicators (like the jobs and housing markets) that we’re not quite out of the woods yet. That’s why it’s important to check the temperature of your business, especially as you look ahead to the second half of the year and the critical holiday season.

Some things to keep in mind as you look at your business today:

How To Sell Colored Gemstones: Part One

Color is hot (and provides good margins), but are you doing enough to capitalize? In “Color: Price Points, Margin and Profitability,” a session held during the JCK Show in Las Vegas, Doug Hucker, CEO of the American Gem Trade Association (AGTA), shared strategies to help jewelers get the most out of their colored gemstone inventory.

Tips shared by Hucker included:

Plan For the Las Vegas Jewelry Shows

The Las Vegas jewelry trade shows are right around the corner. Are you prepared to make the most of your product purchasing and networking time this year? With more than 2,500 exhibitors at the JCK Show and over 200 exhibitors at Couture, planning your visit to Las Vegas is more than essential.

Amanda Gizzi, Jewelers of America Director of Consumer Communications, offers smart planning tips so you can maximize every dollar and minute of your Las Vegas trip:

Boost Your Jewelry Profits

As the economy starts its slow recovery, businesses still need to be cautious when it comes to spending. However, there are opportunities out there to grow.

David Peters, Jewelers of America’s resident education and management expert, offers the following action items to increase your profitability:

Anaylze Your Store's Strengths & Weaknesses

In order to ensure your business not only survives, but thrives today and tomorrow, it is important to take a close look at your S.W.O.T.S. (Strengths, Weaknesses, Opportunities and Threats). David Peters, Jewelers of America’s resident education and management expert, says that a thorough evaluation of all four positions should be done at least annually, or when a major shift (such as the current economy) occurs.

Peters offers the following guidelines for analyzing your business's SWOTS:

Increase Profitability Through Benchmarking

Comparing your store’s financial performance to industry averages and/or standards can have a profound impact on your business. Jewelers of America’s Cost of Doing Business Report, published each summer, helps you find out where your store measures up across multiple operating-performance areas. That knowledge is a powerful tool, since even small adjustments can lead to better profits.

Jewelers of America is currently conducting its 2010 Cost of Doing Business survey, make sure you participate to benefit from the benchmarking analysis it reveals (click here for more information).

When you take the survey online, you’ll get an immediate calculation of your financial data and operating ratios. David Peters, Jewelers of America’s resident education and management expert, says that once you have this information you can increase profitability by:

Protect Your Jewelry Vault

Protecting your store from “smash, grab and run” burglaries is just one step in securing your business. According to Jewelers Mutual Insurance Company, more sophisticated burglars will attempt to disable alarm systems and break into safes or vaults.

Some tips from Jewelers Mutual on preventing safe or vault burglaries:

Price Merchandise Strategically

When it comes to pricing your merchandise, there are a number of factors to consider before reaching that final number. That’s why the price may seem right to you, but without careful consideration, you could end up being over -- or under.

David Peters, Jewelers of America’s resident education and management expert, offers the following advice to help you properly price jewelry product:

Be Aware When Buying Scrap Metals

If you are buying scrap items from consumers, such as gold jewelry, be sure to comply with local, state and federal requirements. For example, many localities require a second-hand dealer’s license. And, if you purchase more than $50,000 from the public in one year, you will need to comply with the USA Patriot Act’s anti-money laundering program.

There's more to consider, however, according to Jewelers Mutual Insurance Company. The organization suggests that you ask important questions of your insurance agent to assure you are fully covered by insurance for scrap metals kept at your store and when shipping to a refiner.

These five important questions to ask when purchasing, storing or shipping scrap metals are:

Use Simple Steps To Improve Inventory Management

Keep Merchandise Safe from Burglaries

Tonight, after you’ve removed merchandise from showcases and stored it in the safe or vault, walk outside your store and look back inside from a fresh perspective: Pretend you are a thief. What do you see? Is there any merchandise in view that might be tempting? Remember, a thief can’t tell if it is platinum or silver, Rolex or Seiko.

Jewelers Mutual Insurance Company recommends that merchandise should be in the safe/vault or out of sight. Jewelers Mutual shares these other important measures to take in order to protect your store at night:

Use Analytics To Improve Business

For companies trying to get a handle on where their business is and where it’s going (everything from customer shifts to trends), analytics can be a powerful tool.

Rachel Ryan, director of finance for the National Retail Federation (NRF), shared ideas from a session on analytics held at NRF’s Annual Convention, which took place from January 10-13, in New York City. The session featured speakers Chris McCann, president of 1-800-Flowers.com, and analytics expert Tom Davenport, a professor of Information Technology and Management at Babson College.

Use the following tips from the NRF session to get started with analytics:

Be Smart About Sourcing Inventory

According to National Retail Federation’s “Challenges of the Future” report, building an inventory of “differentiated products in appropriate quantities, at competitive prices, is an increasing challenge for many small independent retailers.” According to the report, one solution is for smaller jewelers to source from up-and-coming designers, manufacturers and suppliers who are looking to establish themselves with new jewelry products.

The NRF report offers additional tips to stay competitive and build an effective inventory in 2010:

Forget the Holidays, Spring (Fashion) Forward!

‘Tis the season to be jolly!  Why?  Because holiday preparations are over and spring will soon be on the horizon. Helena Krodel, of Jewelery Information Center, helps you prepare to showcase jewelry product in tune with current fashion trends with her seasonal trends forecasting.

Krodel offers this sneak peak at the trends for spring 2010:

Boost Online Sales This Holiday: Online Inventory

Great news for retailers who sell online: Forrester Research predicts online retail sales in the U.S. will reach $44.7 billion -- an 8% increase over the 2008 holiday shopping season. Is your website ready for the holiday shopping rush? Larry Chasin, President & CEO of Ideal Diamond Solutions, an online technology platform provider, says that how you display and organize your online inventory is just as important as how you treat your in-store merchandise.

Use these online inventory tips to help your website thrive in holiday sales:

Boost Online Sales This Holiday: “Virtual” Customer Service

According to Forrester Research, online retail sales will increase 8% over the 2008 holiday shopping season. Retailers, who feature e-commerce or have product directory at their website, cannot overlook the importance of their web presence to increase their holiday sales. Larry Chasin, President & CEO of Ideal Diamond Solutions, an online technology platform provider, says that your “virtual” customer service is key to closing sales online.

Use these tips to enhance your website’s customer experience and thrive with online sales:

Price Proactively

One of the keys to profitability is being able to buy and price merchandise effectively. David Peters, Jewelers of America’s resident education and management expert, notes that passive pricing -- with little or no strategy -- is the norm for many independent retailers. But by treating all your merchandise with the same exact formula (such as, buy it, keystone it, put it in the case), you could miss out on opportunities for increased profits. Instead, he says jewelers should use proactive pricing to maximize the profit contribution of your inventory.

He shares the following proactive pricing strategies:

Increase Your Diamond Inventory, Not Your Overhead

In this tough economic climate, retailers have found that offering customers a “virtual" inventory of diamonds and finished goods is becoming a key component in keeping their doors open. It’s especially important as suppliers set stricter and stricter terms -- dictated to them by the banks – which force retailers to come up with new ways of doing business. This often means having fewer diamonds and diamond-heavy memo products on hand  -- which can mean less sales.

The good news is that technology can offer inventory alternatives to retailers.  For example, retailers now have the ability to include the endless diamond inventory available on the Internet on their own websites. Consumers can view these diamonds at their leisure -- or in your store with the assistance of sales staff. This new technology offers you a complete diamond business without the overhead of carrying a sizable diamond inventory.

Larry Chasin, President & CEO of Ideal Diamond Solutions, offers the following tips on selling diamonds the “virtual” way, without sacrificing personal relationships:

JIC’s Marketing 101: Go for the Gold

In the final installment of “JIC’s Marketing 101” Tips Series, JIC’s Amanda Gizzi says retailers should consider buying back gold jewelry, as a way to entice customers to buy from their stores. “Everywhere you turn, consumers are faced with companies offering to buy their gold.  We always tell consumers to only deal with reputable jewelers and that is YOU!,” explains Gizzi. “Offering to buy their old, broken or pair-less earrings can be a great way to bring new customers into your store.” 

When buying back gold jewelry, Gizzi advises retailers to:

Use a Consistent Pricing Strategy

While there are plenty of practical reasons people buy things, the emotional component is the every constant “x” factor. That’s why your pricing strategy is critical to your success, as it  sends subtle messages and psychology to reach potential customers.

Consider the time-tested price strategies, reviewed by Ivana Taylor at Small Business Trends, as you are creating your price points:

You’re Never Too Small to Strategize

For many small, independent businesses, thinking strategically about the future -- particularly during times when you’re caught up in the day-to-day -- can be tough. For those smaller business owners asking, “Do I really need to go through all the trouble of strategic planning?” Jewelers of America’s David Peters says it is imperative “if you want to keep your doors open and prosper.”

Peters’ says small business owners should consider the following factors, and start creating a business strategy now:

Write Effective Job Cards

Diamonds may be a jewelers’ best friend, but the unsung category of repairs can help get you through the downturn. As many customers now choose to upgrade their jewelry, versus buying new pieces, these jobs are critical to your bottom-line. In order to capitalize on your bench jewelry services, you need to make sure your sales associates recognize the importance of repairs and can write effective job cards. 

David Peters, Jewelers of America’s resident education and management expert, offers the following tips for sales associates:

Benchmark to Success (and Survive)

Knowledge of your strengths and weaknesses is important in any economy, but in the current downturn it can be the difference between advertising your product or advertising your “going out of business” sale.

The 2009 Jewelers of America Cost of Doing Business Report proves this point. The Report found that despite the fact that jewelers of all size and type saw declines in 2008, those who controlled costs were able to lessen the impact of the downturn. On average, high-profit firms grew by 3.1%, while their low-profit counterparts were down -12.6%.

David Peters, Jewelers of America’s resident education and management expert, says using the Report can help jewelry retailers see how their business compares to industry averages, so you have the tools you need to shore up strengths and eliminate weaknesses.

Use the 2009 CODBS Report for strategic planning and benchmarking, and you will be able to:

Protect Yourself When Buying Gold

Buying and selling gold and other precious metals has become a significant part of today’s jewelry business. (The just-released 2009 Jewelers of AMerica Cost of Doing Business Report revealed that karat gold jewelry is the fourth highest product category for retail jewelers in 2008.) But will your policy cover you -- and at what value -- if scrap gold is lost in a robbery or during shipment?

To protect your business, take Jewelers Mutual Insurance Company advice and comply with local, state and federal requirements, which may include:

Get Rid of “Toxic” Inventory: Dispose of the Duds

 According to The Gordon Company’s Retail Jewelry Insights, as much as 25% of many jewelers’ inventory was unproductive last year. Given the downturn an even a higher percentage of this “toxic inventory” won’t be what customers want this holiday season.

Today, we offer tips on how to dispose of hard to sell inventory. The following suggestions can be found in “Toxic Inventory Threatens Jewelers”:

Prepare for Recovery

The worst appears to be over, according to a recent article in INSTORE Magazine. In “Signs of a Recovery: 3 Things You Should Be Doing Now,” David Brown, of the Edge Retail Academy, says jewelers still have a long road ahead, but the signs are starting to look positive.

While it will take time to rebuild store sales to pre-downturn levels, now is the time to start. Use these tips from INSTORE  to do it right:

Rethink Retail Practices

The current recession has many retailers, especially big chains and brands, shifting their strategy to match changes in the consumer mindset. “The impact will mean both sweeping changes in the merchandise on their shelves and subtler alterations, like how many pantyhose to keep in stock,” writes Stephanie Rosenbloom in the New York Times.

With economists and analysts predicting that it will take up to a decade to return to 2007 levels of consumer spending, Rosenbloom notes that now is a good time for retailers to re-imagine the future.

To remain competitive, jewelry companies should note what larger retail firms are doing to thrive:

Reduce Returns

In today’s tough economic climate, getting a sale is great. But before you celebrate, make sure you’re doing enough during the sales process to keep that customer from returning the product. In JCK Magazine’s  “11 Ways to Reduce Product Returns,” consultant Tim Malone shares tips on selling right the first time.

Use these tips to reduce returned sales:

Keep Jewelry Inventory Sparkling with Good Storage

No matter how long you’ve had inventory, you want to make sure that to the customer, it looks brand new. One way to minimize the wear and tear of your jewelry product is through proper storage.

Jewelers of America’s COO Rob Headley, a quality control expert, offers the following tips to ensure that pieces stay in good, sellable condition:

Handle (Jewelry) With Care

The merchandise in your display cases should be enticing to customers -- not dull, tarnished or scratched. But over time, products can get "used" in the retail case and no longer appear brand new.  This is especially true with expensive merchandise that takes longer to turn. 

Jewelers of America's COO Rob Headley, a quality control expert, suggests training sales associates on proper ways to minimize scratches, dents and loose stones while handling merchandise. 

Headley shares the following staff-training tips to keep merchandise in good condition: