The U.S. Census Department just released its advanced monthly report on retail sales for August 2009 and the news is particularly grim for jewelers and jewelry marketers. Going into the vital fourth-quarter holiday shopping season, U.S. jewelry retailers are facing year-to-date declines of 11.6 percent, according to the Monthly Retail Trade Survey. This is said in the press release issued by www.diamonds.net.
In more bad news for retailers, consultancy Grant Thornton predicted that more than 10,000 retail establishments will close their doors in 2009. Among those jewelers affected are Zale Corporation, which will shutter nearly 200 stores; Signet Jewelers, which will close 75 stores; and Finlay, which announced 40 stores will be shut, not to mention hundreds of small independent jewelers that can no longer compete effectively.
Jewelry's Luxury Sector Especially Hard Hit
Unique in the current recession is how deeply the luxury sector has been impacted. In the most recent financial update, Tiffany & Co. reported that net sales have declined 19 percent in the first half of 2009. Tiffany's U.S. business has been especially hard hit, with first-half sales declining 30 percent from 2008.
Tiffany is not alone in the pain in the luxury jewelry business. Harry Winston's retail division reported declines of 35 percent in sales for the six months that ended July 31, 2009 compared to the previous year. LVMH's watch and jewelry sales are off 17 percent and Birks & Mayor's are down 25 percent for the first half 2009.
Bulgari's chief executive officer (CEO) Francesco Trapani reported that the U.S. market was a special challenge for the company in a interview with Bloomberg.com this past summer. The company has plans to close 10 to 12 Bulgari-owned stores.
Retailers and producers of fine gold jewelry are facing challenges, as the World Gold Council reported consumer demand for gold jewelry fell 22 percent in the second quarter of 2009. While De Beers diamond business posted positive results in 2008, the company cut diamond output by 91 percent in the first half of 2009 in response to weak demand.
Luxury jewelry marketers and retailers need new ideas and approaches to grow revenues, build deeper connections with existing customers and attract new high-net-worth shoppers with a willingness to spend into stores. Retailers this shopping season need new strategies and tactics to turn lookers into buyers and build momentum for 2010.
"Hard-hit jewelry retailers can't afford to wait another minute. They have to take action now to pull out of this year's sales slump and build momentum for next year," says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience.
"On the plus side, retailers can finally expect to see shoppers in their store as the holiday gift-buying season beings. But this year, more than in any other, they have to make every customer contact count. Just putting a warm body on the retail floor to work the cash register will prove deadly this year. Retailers need to invest in new and improved sales techniques that will generate more sales from of each customer contact," she explained.
To help retailers learn about the "new normal" shopping environment and what they need to do to grow sales and build business, marketing and consumer insights expert Danziger has teamed with Greg Winston, an expert in high-performance sales training and author of Opting for Opulence: 14 Proven Strategies to Master Selling in the Luxury Market, to launch a new kind of sales and marketing training.
Commenting on the critical role of sales training in the new normal economy, Winston says, "The time when luxury and quality items were sold without sales skills has passed. With a reduced number of customers, retailers can't gamble on outdated – or nonexistent – sales skills. Each customer contact is worth easily 50 percent more than it was two years ago. Selling the customer, not just presenting merchandise, is what is needed today."
