What you need to know?

Five most dangerous trends affecting jewelry and accessories retailers

Retailers in the Gift and Jewelry industry are facing stiff market forces that have forced them to shift strategies or go out of business. Many have gone out of business. We hear lots of stories of second and third generation jewelers that are closing their doors. How to avoid or prevent the worst from happening? Many stores have realized that they can’t think traditionally anymore. The number of independent retail jewelry related establishments has seen as steady decline over the years. In 1985 there were 96,000 registered gift shops in the United States, today its less than 36,000. There used to be 65,000 registered jewelry stores, now its below 28,000. This trend is not reversing, to be an independent owner is like being an endangered species. Key strategies and systems are a must for any owner to make it in todays economy.

Mass merchants and big box retailers market share is on the rise. And of course they are, with slick advertising schemes and endless budges for everything from television, direct mail, radio and on, they are continuing to dominate the marketplace for the consumer’s dollar. Independent retailers account for 40% of the sales in the apparel, and jewelry industry. Down from decades high of 75% back in the 80′s. The independents market share is constantly being squeezed by mall stores, department stores, discount stores, warehouse clubs, mail order catalogs, tv shopping channels, and the internet.
Overall net profits to net sales and going down. Was 6.1% for 2001, compared to 7.3% as reported in 1999. Gross margins also are down to 49.3% as compared to the levels in the 1980′s

The sluggish economy is affecting consumer confidence in this recession, and there is definitely a loss of momentum in growth. The unemployment rate in December of 2007 was 4.9%. Today in many cities, the true unemployment number is easily 10-15%. Everyone’s credit card limits are being reduced and this effects purchasing power.

The average sale or transaction for your typical U.S. jeweler seems to be locked in terminal decline, falling from $214 in April 2008 to a new low of $143 as of February 2010. Believe it or not, $1000 was the typical price point in 2007. Most alarming about this drop in the 12 month rolling average is that it shows no real sign of reversing. Whats driving this precipitous fall? Many believe its a double edged sword where jewelers stopped buying higher priced goods, and sales associates stopped showing them apparently because they were convinced shoppers did not have the money to buy them.

Well whats a retailer to do? Close up shop and start working for a national chain? Hardly. Many folks have focused on the facts of reality and making the best of the situation. Golden Triangle Shows too have evolved with the marketplace and our strategy is to deliver those products and services that will help retailers succeed in todays marketplace.

The consumers tighter and tighter budgets does not mean they are not buying. They are simply buying other items. And plenty of it. The demographics of jewelry gift purchasers shows that people the ages of 25-34 are more likely to purchase gifts of jewelry an any other age groups- primarily due to their life stage. Consumers in this age group are marrying for the first time. This age group spends more than twice the average on gifts of jewelry.

Within the categories of the jewelry industry, colored stones seems to have noticed a serious decline. This area appears unpopular at the moment with little signs of bouncing back. The percentage of sales coming from this product has dropped from 13% in 2008 to 7% for 2010. Diamonds although improving, have not returned to contributing the percentage of sales that they once did. Down to 43% from 47%. And gold jewelry with its price rising as made itself a very limited market. A decline from 14% to 9.5%.

The driving forces of the market have shifted to silver jewelry, beaded jewelry, and fashion jewelry and accessories. These markets have exploded, probably due to the global financial crisis. Silver jewelry product has risen is total U.S. sales from 6.5% in 2008 to over 18% for 2010. Fashion has grown from 5% to 12%. The contrast between big stores and the independent store is negligible for silver sales with average of $53 versus $51. Silver/Beads/Fashion are enjoying a massive increase in total sales albeit with lower and lower price points. The bead and silver market in many stores has seen greater emphasis and more shelf space devoted to it. Of course with volume sales of these items on the rise, the savvy retailer rides that wave to the end. It does seem the public’s interest in bead product is not ending any time soon and if this growth can continue, then we will continue to see an improvement in trading conditions. So even if average silver sales have dropped from $55 to $45 since February, the increase in volume average from 1500 units yearly to now more than 2500 units yearly has made up the difference.

Looking to increase your average silver sale should be a priority at the moment to make the most of this opportunity while it lasts. A number of steps can help here:

Review the average price of your silver inventory. This should be at least 20 percent higher than your current average sale in order to grow this average. If not, make sure the average price of new inventory you bring in is higher than your current average inventory price.

Check your mark-up on this product. Are you getting enough for your efforts? An increase in prices not only increases profit but also average sale.

Set your staff’s (and your own) expectations. Don’t be fooled into believing that everybody wants to spend less. Many of your silver customers will have switched to silver from more expensive products as a means of reducing their spending. There is no reason why that silver spend then needs to be lower than the average. You have to think up before you can sell up!

Historically the ratio between the average price of gold and silver has been 15:1 (gold being 15 times the price). That ratio now stands at over 60:1 (gold being more than 60 times the price of silver). This has contributed to silver’s relative affordability – but it may not last. With inventories of silver at near historic lows we may begin to see a rebalancing of the silver price relative to gold.   It’s time to make hay while the sun shines.

GTS trade shows empower you the retailer to take advantage of these market forces. Our vendors include some of the best importers and wholesalers in the nation that can get you the the right products in silver jewelry, bead jewelry, fashion jewelry, and accessories for greater and greater turnovers. Here you will find vendors that specialize in the cutting edge fashions that will help grow your business in all economic climates. Huge selections within our shows are a trademark of helping the retailer succeed.
Over this past decade, GTS shows are constantly jurying their events which allow for you to feel confident that you are dealing with top vendors in their lines. So to stay ahead of market and actually sell what todays customers are actually purchasing, attend our next event for better accessories, sterling silver, bead jewelry, and handbags.