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Jewellery retailer calls for help

We receive a great deal of reader feedback at Jeweller, especially when we publish articles about internet retailing and the state of the jewellery industry. So it was no surprise that last week’s story about the closure of Tuskc generated quite a few calls and emails. 
In particular, one reader’s letter stood out; it was an emotional outpouring about how much the jewellery industry and general retailing had changed in recent years. As the author says, “we struggle to match prices and lose customers to other industries vying for their money.”
We don’t normally make our reader’s letters the subject of a specific story, but in this case we feel the heart-felt explanation about the battle for small business to deal with the enormous change in the digital age is worthy of publication.
It’s sober reading and is both an analysis of the current state of general retailing as well as a jeweller’s call for help – “I need to be re-invented as a person. Just as the industry needs re-invention.”
He says he feels helpless and overwhelmed, so we have published the letter in full and, after verifying the authenticity, we have withheld the author’s identity by request. 
Do you agree with his sentiments? 
Do you find yourself in a simiular situation and do you think an online "forum" would help in talking about the challenges small business face?
The Editor
Jeweller Magazine
South Melbourne, Vic 3205

24 September 2013 

Re - Letter to Editor

Hi Coleby,

Thank you for your weekly newsletter and articles specific to the Australian jewellery industry, it is much appreciated.

I read the story about the closure of the supplier Tuskc, which highlights the fragility of the local industry and I believe, unfortunately, that there are many more companies also likely to close.

Our independent jewellery store has operated for nearly 70 years and spans three generations. I started in the family business more than 40 years ago, but I am increasingly worried if we will remain in business.

I have tried to keep up with all the new trends, hired internet advisors, started an online arm to the existing business, maintained an advertising and marketing budget of 5% of turnover, and invested in staff training and developing new in-house brands.

None of this has worked to the degree that the "experts" thought it should, but still they charged for their services, with little or no embarrassment. Consequently I now only hire outside help on a “payment for success” basis. Needless to say I don’t get many takers.

I adhered to the old mantra of “investing in your business” however I have found that is no longer a suitable hedge against the downturns. For example, I used to say that, “stock does not eat hay and therefore is a safe investment”; well, I now say that, “I can’t eat gold and diamonds.”

Stock is a millstone around my neck; it has no liquidity and I therefore cannot change the course of my business quickly enough to respond to new market conditions. 

Wholesale credit is expensive, when you can easily get 5% to 7.5% discount by paying cash, so I am affected twice. 
I am sure you have heard all these issues many times before and the main reason I am writing to you is not to rehash the problems or highlight my own failures. I am writing to suggest that Jeweller magazine acknowledges the plight of the jewellery industry on a more personal level.

One of the major causes of my own “dark” thoughts is the inability to discuss with others, within MY industry, what is actually happening on a personal level.

I have invested a lifetime to my business and I feel a failure.

Please understand that I’m not facing a threat of immediate closure, but I don’t have a positive feeling about the long-term viability of an industry that has provided millions of Australians with fantastic emotional experiences.

We retail store owners and staff have always delighted in the fact that we contribute to the enjoyment of major milestones in people’s lives. Those feelings are becoming more and more rare as we struggle to match prices and lose customers to other industries vying for their money. 

We are losing the battle and consequently the war for the hearts and minds of the current generation as well as the coming generations about the value of jewellery. It’s this loss of enjoyment and the lack of satisfying people’s hopes and desires, more than the loss of income, which is the most saddening aspect of being in the jewellery industry.

I need to know what others in my situation think and feel. I need to know that I can leave a meaningful business to my heirs.

I need to be re-invented as a person. Just as the industry needs reinvention.
That is the sad truth and I feel overwhelmed by the situation in which I find myself. Talking to other people in the jewellery industry would help immensely and I therefore recommend that you set up a blog, website or some such mechanism, by which we can contribute personal experiences, even if anonymously.

By talking amongst ourselves and by openly discussing the problems and challenges facing retailers, we may recognise we are not alone. That, in itself, would be of great comfort to many of us who feel alone and, in some cases, helpless. 
I read your emails every week and feel that your magazine is the only organisation that can arrange this online service. I would love to hear your thoughts on the matter.


Name withheld by request
Proud jewellery retailer

Editor's Comment

I wasn’t sure what to make of this letter the first time I read it. In fact, it arrived at the very time I was responding to another reader’s comments about the effectiveness of the Jewellers Association of Australia (JAA), so I decided to think about it overnight, rather than dealing with it immediately,
As you can see, it needed a considered response given that the author attempted a self-analysis before contacting me. After calling him the next day and seeking permission to publish his letter, we thought we’d gauge the response from other readers.
We’d love to hear your thoughts and observations and feel free to download the letter here and email to your colleagues.  
You can Login and have "Your Say" or email me directly
Coleby Nicholson - Editor

Update: Thursday 3 October

Jeweller received a great deal of feedback after the publication of this story on Tuesday 1 October. Some readers also have posted their comments below while others chose to call or email me directly.
We asked David Brown, co-founder of Retail Edge Consultants and regular columnist for Jeweller, to review the letter and offer specific advice on the retailer’s predicament. Brown’s detailed analysis and observations make for some excellent reading. Read here
In addition, Bryan Young, managing director of Retail Rescue, contacted me and also offered to provide some insight and solutions on how the retailer could improve his business. As you will read, Young says, “I hear the same thing on a daily basis. I am fascinated by your reader’s story, so much so that I am willing to ‘put my neck out’ and offer to help this person on a ’payment for success‘ basis.” Read here.

It should be noted that neither Brown nor Young are aware of the author’s identity and therefore have no specific knowledge of the store’s location, target market or competitive position. Their advice is provided on a general basis.

David Brown comments

Bryan Young comments


Reader responses - (more below)


Hi Coleby,
I've been out of the industry for about 13 years. Before that I had participated for 20 years and left for practical purposes but also due to the decline in quality of pieces people were buying.
Most of my time was spent restoring and repairing and, may I say, I was pretty handy with torch and solder. Case in point was an occasion where I am working "out the back" of the large chain store when a woman came in with a broken hollow bracelet. Her daughter had it on lay-by for some time. Within a week of wearing it, a link had broken. It had been so work hardened it fractured with little pressure. It was so thin I couldn't solder it. It was left to me to explain to the customer why I couldn't repair it, which wasn't ideal considering where I was at the time.
"But it's new,” said the customer. I'll never forget this and I use it as an example to people when recommending they visit a manufacturing/non-chain store or an "upstairs jeweller". I did my time in a dingy workshop above a menswear store on a main street, hence the term. I thought it time to go and try something else before I got too old. I got into insurance then the railway.
Now here's the thing. I found a large market with keen customers and they asked why I am not still "jewellering"? I thought about that. I am not a practicing jeweller but I have a ready market.
Needless to say, with shift work on the railway wearing thin, I decided to get my jeweler’s bench up and going again which I have done. Interest is growing for my work. How did I manage this? 
As it happens I am training to referee in a very large women’s sport. My league has over sixty women alone. There are at least four of these in S/E Qld. I didn't join this sport to build a customer base, but I quickly learned of the potential. I just had to convince myself to return to the bench. 
The girls want hand made jewellery and they want it made in Australia. Once they know where the chain stores get theirs and the quality of it, they tell their friends. Needless to say, I found a market on the loose.
I agree that the trade has evolved into something new, and I don't like what has happened to it at all, but it only has itself to blame. Blame the major chains for stocking poor quality pieces and dodgy practices. Blame the trade itself for not educating the punters on what "bang for buck" really means. Why going to a "Mum & Dad" store is better for them in the long run and how this will get them jewellery that can be handed down generations and not a box of broken bits and links within six months. 
Why doesn't the trade tell consumers it's better to save and lay-by for a decent piece than spend less on pieces that will disappoint in a very short time?
Andrew H - Queensland
Dear Coleby,
I have been in business for 30 years except I’m a manufacturer and I have seen first hand these bleeding heart retailers take all my work away and give it to China and India. Retailers didn’t care as long as they got it cheaper and the only the difference is I didn’t cry about it.
I decided to get even and chase the retail customer as a direct to public wholesaler and offered 50% discount on hand-made Australian jewellery and guess what it worked, 15 years down the track I have a huge client base I deal with the client direct I don’t waste my money on advertising such as Yellow Pages or the internet. 
And the JAA, don’t get me started they must be the most useless association in Australia. I have been a member for over 10 years but now resigned, if you want to save 1000 dollars don’t pay their members fee!
Retailers used to give work to manufacturers and in turn manufacturers would support the retailer now because of their greed that’s all gone and they want to cry about it.
Well I’m not crying I’m now laughing at their misfortune because the more retailers that fail the more business I get. You the retailer began your demise now reap what you sowed.
Christian - Victoria
(Business name withheld by request) 
* Read more responses below. Login and have "Your Say".

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Your Say

Wonderful insight
Hi Coleby -
Thanks for publishing such an eloquent letter. Who ever this retailer is - please let them know I think they have wonderful insight - and a great attitude, asking your help on how to network/support others.

It's definitely needed at the moment - and I betcha you're the team to get it going :-)
posted by Rita Williams on October 01, 2013 13:36

New and scary life
It appears the writer is one of the older generations and he might not be aware that online forums like ANZ Progressive Jewellers and Young Jewellers Group - where you can often get instant gratification - already exist as a social/support network for we jewellers.

The truth of the matter however is we, as humans, are now required to be conversant in many areas of business be it technology, marketing, e-commerce, whatever - without this there is absolutely no way anyone can hope to compete without first-hand knowledge in key areas.

I am also less worried about the shrinking industry because I know that technology is making huge changes to EVERY industry and the most personal parts of our lives, I have it on good, expert authority that there will be a 'natural' progression of human behavior that will ultimately dictate what the market will do, there will be a gradual decline, a stabilisation then a surge - but not in the area expected.

Like any other business - the key lies in anticipating where and when that surge will be and being prepared to ride it. Here's a clue - ethics and evolution of social norms in relation to technological integration with the modern human's life.

There is no denying that we are hurtling towards a new and scary life with all this advanced technology - it will play a huge role in restoring value to the 'old ways', we just need to know how to remain in business until then.
posted by Khayreyah Amani Wahaab on October 01, 2013 13:57

Three thoughts
Thanks for publishing the letter from your retailer member. It is a topic that we have discussed many times of late too, here in New Zealand.

I have three thoughts:
1. The current generation of purchasers has grown up in a very fully consumed society, not wanting for any essentials. Their desire for consumption, beyond the latest electronic gear, is much reduced from that of their parents (us). They will inherit more jewellery than they can ever wear and it is all of a style that they cannot relate to anyway. The only way to capitalise on this is to remake their items in a contemporary look.

2. Take a walk along a jewellery row: this may be Bond Street, Rodeo Drive, Fifth Avenue or your local Mall and really LOOK at the items in the windows. I have long maintained that if I were to switch the name signs overnight, nobody would notice the difference in offer!

When we at last differentiate ourselves and move beyond being commodity traders in diamond values, then we may be able to entice people to our stores. Of course clients will buy over the internet, probably from USA, Thailand or elsewhere, if they can get the SAME item (apparently) at a hefty discount. Only by offering them something DIFFERENT will we have a chance.

The internet doesn't disclose shoddy workmanship or materials unfortunately but the price is too tempting. Interestingly, at the Hong Kong Fair, we found the young Chinese to be presenting themselves strongly as individuals - such a change from their parents.

3. For any surfers out there, the key to success is in the Bottom Turn. Having ridden the wave for a bit, you have to turn up to regain momentum. If you miss this point, the wave scoots away under you and you are left floundering with no momentum to push you. Paddling out the back and finding a new wave to push you along is the only chance: no hardware, theory, concept will help, just hard graft …

Tough times.
posted by David Wheeler on October 01, 2013 14:48

Thoughtful analysis of the trade
It is unfortunately a sad, and all too familiar, story these days. In terms of having somewhere to talk to people, maybe it is worthwhile pointing the writer in the direction of the existing forums on Facebook.

Someone who has that kind of thoughtful analysis of the trade, and that many years of experience would be a truly welcome addition to any of the existing groups/forums. Maybe the groups would offer a sounding board for him to discuss ideas or simply share worries.

In terms of the deeper problems facing our trade I wish I had the answers. Or I wish anyone had the answers if they were willing to share. I am starting to think that maybe the exclusivity and the luxury that for so long were the draw cards of our businesses have become our millstone. With the broadening of the gap between the classes, the upper classes have become a smaller customer base for quality jewellery.

People with lower incomes still want beautiful jewellery but they perceive traditional hand-made jewellery as something they can't afford. They instead turn to the internet where mass produced pieces allow them to afford what they want without being in a position to understand the differences between the two.

Add to that a broader market shift in all retail towards a more disposable attitude to consumerism. Why buy a t-shirt from a designer when I can buy 10 t-shirts from Kmart for the same price? Sure the cheaper t-shirt won't last as long but 10 of them will. I'm sure that cobblers, milliners, tailors and numerous other trades have been through this transition and now jewellery is. The true test of our trade will be to see how we adapt.
posted by Kathryn Grey on October 01, 2013 16:04

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