While 2014 produced mixed results for jewelry retailers—overall, figures released in early February by the U.S. Commerce Department showed that sales of fine jewelry and watches grew only 1.5 percent year-over-year-—some jewelers reported that it was their best year since the recession hit, and a few even went so far as to say it was their best ever.
For the three profiled below, 2014 proved the perfect year to launch a business, relocate a popular store, and/or refocus a streamlined small-town mainstay.
Here’s how they did it and came out ahead, along with their “A-ha moments,” incidents or decisions that opened their eyes and helped their businesses move forward.
1. Start with a Bang
Cut Fine Jewelers
Baton Rouge, La.
After several years working as the fourth generation of a 70-year-old jewelry store, Matthew Patton struck out on his own in early 2012. He wanted to serve his demographic: 30-something professionals. Millennials shop differently than previous generations, Patton believes, especially when it comes to bridal, the category he’s targeting.
“Jewelers have been selling diamonds based on the four Cs, but that information is available online now. Most people know the basics by the time they start shopping,” Patton says. “And most sell on three Cs, really. Nobody talks about cut because diamonds are usually cut badly.”
So, he decided to build his brand on precisely that: quality-cut diamonds, especially wedding rings, which is generally the first major jewelry purchase for most people his age.
Patton ran Cut Fine Jewelers as appointment-only for two-and-a-half years before opening a newly renovated store last October. “I wanted to test market saturation before I invested in a brick-and-mortar operation,” he says. “We have a lot of independent jewelers around here. I wanted to make sure the demand was there. I found that it was.”
Cut launched in conjunction with a splashy e-commerce site. Inspired by Etsy promos and youth-oriented retailers such as Urban Outfitters, Patton created buzz with edgy videos that emphasized hipster lifestyle over product, then built Cut’s website, advertising and social media around them. The strategy created nice initial buzz and he ended up with a better final (and, in his case, first) quarter than anticipated.
A-ha moment: Engaged himself last year, Patton had unexpected insights while shopping for rings. “It gave me a completely different perspective on what the guy feels on the other side of the counter,” he says. “All the different emotions that come into play, what it’s going to mean to her. It was an awesome experience and it made me more connected with the customer sitting across from us.”
2.Streamline and Focus
Since Bill Longnecker opened his store in small-town Nebraska in 1996, it’s been the only fine jewelry game in town, averaging a 2.74 percent annual increase in sales. “Over the lifespan of my business, my sales chart looks like a heartbeat--one year up, the next year down, but always curving upward,” he says. “The past seven years, we have had a smooth upward bell curve with last year really ticking up, to an 8.66 percent jump.”
It was a good year for local ranchers and the oil industry and as a result customers were buying a lot of jewelry. Upgrading displays a section at a time also helped, adding variety and visual interest to the store. “We kind of emulated the big guys,” he says. “Now we have more of a chain-store designer look.”
It’s not always easy to meet the needs of a customer base that spans ages 24 to 65 but what helps is that Longnecker understands his customer base. “We are hard-working people out here,” he says. “My customers aren’t afraid to get their hands dirty, but they do love bling. That’s why we’re in business.”
Longnecker knows for example, that what constitutes “bling” in McCook is not necessarily the latest fad. “People here couldn’t care less about Pantone’s Color of the Year,” he says. “I don’t buy into trends I see in the magazines until my customers come in and actually ask for something.”
So, what do they like? Rose gold has done surprisingly well and Shimmering Diamonds, Ostbye’s line of diamonds that move, or “shimmer” with the wearer, was a game-changer. “It’s the first thing in 25 years that’s been really ground-shaking as a jewelry trend,” he says.
On a practical level, Longnecker made a simple change a decade ago that dramatically impacted profitability. He set up accounts for sales tax and employee taxes so he can automatically calculate and sweep the necessary funds every time he makes a deposit. “Until I figured that out, I was always over-spending and then getting stuck at tax time,” he says. “That was my weak spot.”
A-ha moment: About five years ago, Longnecker shifted the marketing spotlight from his store to himself. “I finally realized the most important part of my business was me,” he says. “Living in a small town with a small store, I had always strived to keep the focus on the store itself. But it’s the jewelry design that sets me apart from the competition. I am the store and the store is me. I think that helped business quite a bit.”
3.Follow Your Customers
Opening in the hippest mall in Dallas in the mid-1980s, Ylang 23 has long been a favorite of the city’s fashionistas. From this local, independent base, owners Joanne and Charles Teichman built a national and international following for their brand, primarily via web-based marketing.
Long before the stacking trend took off, Joanne Teichman introduced the motto “Stack ‘em up!,” insisted on a fully functional e-commerce site as early as 2000, and jumped on every major social media platform at the outset. Today, Ylang 23 has more than 20,000 Twitter followers, nearly 36,000 Facebook followers and is now hot and heavy on Instagram.
After nearly three decades, the Teichmans decided to ditch their mall location at Galleria Dallas last year to open a new store, nearly double the size, in a University Park shopping center. A few months later, they launched a revamped e-commerce site. No real change was made to their inventory—which includes nearly 50 designer lines including Cathy Waterman, Irene Neuwirth and Jennifer Meyer—only to the site’s shopping experience. The result: nearly 40 percent growth in year-over-year sales for the second half of 2014.
“From the moment the door opened, our gut decision to move was validated,” Joanne Teichman says. “People were walking in that we hadn’t seen in years. They just didn’t want to go to the mall anymore.” Ylang 23 is, once again, the hippest fine jewelry shop in Dallas, and with daughter Alysa working toward her MBA at New York University, the family business is ushering in a new generation.
A-ha moment: Teichman noticed women were shopping for rings differently than other jewelry, so she introduced The Ring Bar with the new store, a freestanding station and central feature of the redesigned website where customers can build their stacks. Each designer still has his or her own section in Ylang 23, but their ring lines are at the bar so customers can mix and match. It’s been a big hit, strengthening an already strong category.
“Ring purchases can be loaded, given the connection to marriage,” Teichman says. “But they’ve also become a strong self-purchase category for women.”