As mentioned last week, our involvement in four different jewelry shows in Las Vegas this year gave us a unique vantage point to hear and feel the pulse of the jewelry business first hand. In addition to the very serious need of reducing inventory levels of aged and underperforming product, here is what we heard in Vegas:
• Most vendors reported fewer overall orders, but larger overall purchases. Buyers were very serious, but were also paying much closer attention to inventory levels than in the past.
• Manufacturers were getting more and more requests for trade-ins of old merchandise which can be helpful, but some reported such high trade-back ratios that it didn’t make sense to retailers. Most retailers acknowledged that trade-back ratios that are in excess of 3 or 4 to 1 simply get them in bigger inventory trouble down the line.
• Most retailers were very specific in what they needed to buy. Most were focusing on jewelry lines that produced the turnover they needed rather than those that wouldn’t move with respectable inventory turns.
• Retailers weren’t afraid to spend, but were hesitant to open too many new brands, and focused mainly on those brands with a proven track record.
• Items selected by retailers were based more on perceived value than on specific price points. Given the power of female self-purchase today, styles had to have the right look and feel to match the price on high or even modestly-priced products.
• Diamond basics continued to be strong, especially in earring studs and a surprisingly renewed interest in tennis bracelets.
• Retailers are still battling online competition, but a focus on improving the in-store experience is helping to appeal to today’s jewelry shopper.
• Custom jewelry demand from consumers who want things “their way” has seen tremendous growth and jewelers must adapt quickly to this need. This also leaves many stores with a growing problem of inventory levels that won’t go down without a major sale event.
Overall, business is good, but jewelers must be assertive in capturing consumer demand. Thriving in the jewelry industry today is not for the faint of heart. If you can use some help, please give us a call. We’ll be there for you.