(via Gems & Jewellery News, Vol. 8, Number 1, December 1998) Harry Levy writes:
By the time you read this article the Christmas season will be behind us. At the time of writing it is difficult to predict what sort of Christmas our trade will have this year. The patterns of yesteryear have long since left us. In those days, by the end of October most outlets had placed their orders for Christmas and, apart from a few specials at the last minute, we all knew what sort of year we would have. As far as the independent jeweler is concerned today, most of his sales will consist of specials, and he will leave his orders up to the last minute, as will his customers.
So rather than sit and take stock as to what has happened this year let us try to look to the future, to next year and beyond.
Alternative outlets
The jewelry trade has fragmented and the loser has been the traditional high street jewelry shop. He has seen his business go to the multinationals, mail order catalogues, and now mail order shops, TV outlets and soon the Internet, although this is with us already, as well as the auction houses. How much business these new outlets have actually taken away, as opposed to creating new demands and bringing in different sections of the public to buy jewelry items is debatable.
I recall many years ago when I first set up home, I needed some fitted carpets. I had a cousin in the trade who promised me that he would supply me the carpets. I bought from him and it was only several weeks later, when I was in one of the specialist carpet stores with branches everywhere, that I saw my identical carpet at prices above twenty percent below what I had paid my cousin. On complaining to him, he informed me that the groups had a much higher buying power than him and thus could negotiate better prices than he could get.
We have a similar situation in our trade at present. Many jewelers have remarked that they cannot make an article for the price that the same thing can be bought from these outlets. How can they compete?
The simple answer is that they cannot. So in order to survive they must concentrate on selling articles which the outlets cannot make. Put very simply, it means that they must try to sell jewelry which cannot be readily duplicated.
Mass production
The mass market depends on selling numbers of identical units. A piece of jewelry is selected by a buyer or a panel to go into their range. In almost all cases the buyers are not jewelry specialists and in order to ensure that they get and sell pieces that match up to their original samples, they insist on each item being exactly the same for any given line. Thus, if one is selling an amethyst and diamond cluster ring, the diamonds must all be of a similar size and quality and the amethysts, likewise, must all be identical. It is not enough that they be of the same size and shape, but must all be of the same hue in color and purity.
The manufacturer who supplies these articles must set up to produce identical units and periodically to reduce his prices in order to stay in with the buying group. He can do this by improving his manufacturing processes and reducing the price of his components, as well as reducing his profits.
Falling standards
Several years ago, one of the manufacturers who were supplying one of the multiples stopped buying a type of stone for which he had given me regular orders. When I asked him why he had stopped ordering these stones from me and accused him of buying them elsewhere, he remarked that the group was constantly asking him to reduce his price. The article was a pair of earrings, and the only way left for him to reduce the price was to make the gold thinner and thinner, until he reached the situation where there was not enough gold to hold the stones in place so they kept dropping out. In the end he dropped the line.
The manufacturers in this country try to source their components, and eventually find that the article can be produced and purchased much more cheaply abroad. Finally they become importers and put the finishing touches in this country as part of their manufacturing process. With the prospect of hallmarking being no longer mandatory in this country, they will become merely re-packers of such items. They also run the risk that their customers, in turn, will use outlets abroad and cut them out totally. Luckily for us, many of these items produced abroad do not have the quality of those that are made in this country and hopefully the buyers will appreciate this fact and return to rely on home produced goods.
I see little future for those of us who are middle people in our trade. The large groups will find ways of marketing the goods to the public, and sourcing them, cutting out our retailers and manufacturers. Their main criterion will be price and while it remains that way quality will suffer.
The way forward
Quality is the factor on which our own trade will survive, producing jewelry that is good in quality and value for money. Such jewelry must be sold on the rarity of its components and the craftsmanship of its makers. There will always be a place for the High Street Jeweler, even if he has to move into a mall and be right next to his competitors, provided he can sell things which are not easily imitated.
I come across many young and new designers and they are all finding outlets for the unique pieces of jewelry they produce. The mass of cheap jewelry available now is making the public more aware of jewelry: they buy these items to wear a few times and then throw away. Let us hope that this awareness they are getting will make them want something a little better and more lasting for that special occasion, and when they think of buying such an item they will come into a high street jeweler.
I hope you all have an enjoyable Christmas and that some of you will put pen to paper and let us have your views about our trade. It is going through a state of flux, both in marketing, as the movement of goods becomes easier and in the amount and variety of treatments of the natural and synthetic gems that go into the making of a piece of jewelry.
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