Retail stores are not dying because of e-commerce, as many
in the trade fear, but undergoing a transformation, according to jewelry
industry consultant Peter Smith of Vibhor Retail. And in order to compete, he
argues, jewelers must develop new strategies to engage customers.
Smith was the keynote speaker at the Portland Jewelry
Symposium, where approximately 150 independent retailers, designers and
manufacturers gathered at the beginning of October to discuss the theme of
“Future Think: Innovate, Create, Thrive.” Other speakers addressing retail
concerns included Monica Stephenson of ANZA Gems and Becka Johnson Kibby of the
Edge Retail Academy.
Here are five strategies these professionals recommend to
jewelers trying to navigate the changing retail market:
Independent jewelers have to focus on providing a great
retail experience, according to Smith. “Park the product story for a little bit
and think about experience [differently than] the way we thought about it before,”
he says. This means thinking beyond customer service and reexamining everything
about the store, including the lighting, the architectural details, the music
and even the scent.
Most stores are overloaded with product, and owners need to
trim it to better manage the stories those items tell and focus on what sells,
Smith says. “Be ruthless in shedding [product], turn it into cash as quickly as
you can. Take that limited amount of dollars and put it into feeding your evolved
and condensed stories… then marry them with your great experience.”
E-commerce has to be part of an overall retail strategy,
Smith stresses. The trend is to have an online presence while maintaining the bulk
of one’s business within the store. “Retail is in the midst of a massive
transformation that obviously speaks to the reality of an integration of bricks
and mortar and e-commerce, with bricks and mortar continuing to be the
predominant player.”
The future of the jewelry industry involves knowing the
source of jewelry-making materials, says Stephenson. She acknowledges the
difficulty of this, since it’s commonplace for a gem to pass through multiple
hands before ending up in a display case. But the ANZA Gems founder — who buys
her stones directly from small mining communities in East Africa and ensures
that the communities benefit from their sale — warns that “we live in a world
with people who want to know where their tomato comes from.” Consumers care
about the source of the products they buy, she says, and retailers had better
have an answer for them.
For store owners trying to make a graceful exit from their
businesses, the choices are pretty straightforward, according to Kibby: an
internal or external buyout, business closure, or becoming an absentee owner.
No matter what the choice, business owners must be prepared, she says. Any
succession plan should include:
- Ways to drive net profit. (“Every
dollar of profit is worth $4 to $5 when you sell,” says Kibby.)
- Optimum inventory management.
- Delegation and empowering others
to take over daily operations.
- Conservative risk management
strategies.
- A gradual transition of personal
skills and responsibilities.
Article from the Rapaport Magazine - November 2017. To subscribe click here.