As we are now “officially” open, I wanted to talk about what a private jeweler is and why our new business model makes a lot of sense for clients.
There’s a trend quietly happening among small jewelry stores: they are closing. Since 1999, over 3,000 main street jewelry stores have closed and the trend is accelerating with this recession. In 2008 alone, 1300 stores closed.
As many clients can tell you, I should know because I have operated a successful jewelry store in the Kansas City area for over 30 years. Similar to other jewelry stores, I closed my retail operation in 2008 and moved away from the retail lifestyle. This change gave me time to rest, recuperate, and reflect. Here are three important reasons for changing business models.
- The Internet’s growth. The Internet has changed the economics of many businesses and jewelry is no different. Websites offer a convenience that is fun and popular. Wholesale diamond houses love selling to these sites in bulk, and clients looking for diamond jewelry love avoiding lines, side-stepping pushy sales people, and driving around town to compare prices.
- Jewelry inventory is expensive to own. Most people have no concept of how expensive it is to run a jewelry store. Or maybe they do once they see the prices In addition to the upfront cost of buying thousands of jewelry items, there are other less obvious expenses like lighting, displays, equipment, security and insurance. Even packing and unpacking the jewelry for daily display becomes an onerous expense.
- Traditional advertising no longer works. When we first started our store advertising was a relatively simple exercise. We worked with an agency to write and place simple, thoughtful radio ads. When we ran ads people came to our store and bought jewelry. What a world it was. Now with the traditional advertising channels like radio, television and newspaper having much less impact, marketing a small jewelry store is a real challenge.
The trend of smaller independent stores closing is likely to continue given our nation’s recent recession and the rationale above. In their place I think you are likely to see more private jewelers like us open up.