|
|
U.S. Retail
By Lara Ewen
The bulk of 2015 was plagued with slow and unpredictable consumer behavior, which made many retailers uncomfortable. No one seemed to know exactly why sales figures were so unusually erratic. Some blamed the weather. Others pointed to the extended presidential election cycle. Still others pointed their fingers at Millennials. Uncertainty, in any event, seemed to be the only constant and it made the most optimistic storeowners tug uncomfortably at their collars. However, the positive side of the uncertainty is that hope is always around the corner and the holidays may yet bring a bright end to a troubled year.
Retailers rode a roller coaster all year, with up and down sales cycles as unpredictable as the weather. “We had a fairly decent first half of 2015, but the past four months have been terrible,” said Paul Geiss, owner of Paulo Geiss Jewelers in Charleston, South Carolina. “Bad weather, flooding…that keeps people away. And people are not spending like they used to. Millennials don’t spend money on jewelry. They’re buying all these gizmos and going to restaurants, but they don’t think jewelry is worth the money.” Uneven sales and younger clients were causing similar concerns across the country. “It’s been a very unpredictable year,” said Michael Han, owner and president of The Wedding Ring Shop in Honolulu, Hawaii. “For us, it’s mostly been flat in 2015. Not bad, exactly, but flat. That said, we’re coming off of one of our best years ever, so flat is okay. But also, Millennials are different kinds of buyers. They’re not ready to make commitments as quickly or as often as previous generations. Also, Millennials don’t like shopping brick-and-mortar, and they don’t have the same emotional ties to diamonds as previous generations. And our industry has been sleeping on selling the story and too focused on selling the price. I like to talk about the story of a diamond, and not the price. And I think De Beers and Forevermark are also trying to bring the story back.” Of course, some retailers saw flat sales as practically positive in an otherwise shaky year. “I’m even with 2014 and I’m going to count my blessings,” said Doug Jones, owner of Dale’s Jewelers in Idaho Falls, Idaho. “I’ve loaded the shelves for the holiday as always, and I’m ready, and I’ve had some custom orders. Every year, I say it’ll come, and it does. Still, the climate and the vibes I get from suppliers and diamond guys make me nervous. I was in Bangkok in September and they hadn’t beefed up their inventories since February. I got the impression they were real nervous. The big, loose diamond customer is elusive these days.”In San Diego, Jim Jessop, owner of Jessop’s, was similarly grappling with customers’ reluctance to make large investment purchases. “2015 has been good, but not great,” he said. “It started real strong, but the summer was softer than usual. It only started to come back in November. But I think there’s a lot in flux in the market. Buyers’ willingness to invest in fine jewelry has waned. It’s not as socially acceptable to buy jewelry as it used to be.” For some storeowners, however, the 2015 dips and fluctuations in consumer interest in jewelry were not just notable; they were historic. “I had a visit recently from people working for the Federal Reserve in Atlanta,” said Benny McNair, owner of McNair Jewelers in Gadsden, Alabama. “They’re trying to chart the progress of the country, to decide about T-bills and interest rates and all that. And I told them I’ve been doing this just shy of 40 years, and this is probably the most difficult year I’ve ever seen.” McNair said he’s been able to stay steady with custom work, appraisals and a few large single-item sales, but that overall business has become less dependable. Nonetheless, he was feeling bullish about the upcoming holidays. “Right now, I am cautiously optimistic about holiday 2015,” he said. “It’s Christmas season and people will buy things that they wouldn’t otherwise buy.”
For the most part, retailers tried to put a positive spin on the upcoming holidays. “We have some good things in the pipe for holiday and we have some promotions coming up that ought to give us a good season,” said Jessop. “But the pain of the 2016 elections has been dragged back into the 2015 shopping season. Campaigns are about emotions and emotions are what jewelry is about. So that will be an issue.” For McNair, though, it’s all about being prepared. “You don’t make 80 percent of your sales at holiday anymore,” he said. “But you used to have to pad your inventory and add employees, so in the past, if you didn’t make money, you were in bad shape. Now, I don’t have to buy more inventory or hire more staff, so I don’t have to worry about all those extra bills and I don’t have to worry about holiday. When it all shakes down, maybe it’s better to sell existing inventory and kick back a little.”Article from the Rapaport Magazine - December 2015. To subscribe click here.
|
|
|
|