Stanley T K Wong’s Post

This post is ostensibly about jewelry, but it's really about #shrinkflation and how a retailer loses years worth of goodwill. My wife, Lisa, is as obsessive about vintage estate jewelry as I am about vintage cars, motorcycles, audio equipment, guitars, amps...well, you get the picture. We don't have a lot of money to toss around on this stuff. We buy quality vintage items and wait patiently for the right deals to come along. Lisa buys this stuff like I buy cars and guitars, looking for good deals and always buying things at a price that won't hurt if the sh*t hits the fan and we need to move something quickly. Long's Jewelers in Boston has run an annual sale now for several years and it's good. In past years, Lisa has paid close attention, built wishlists online, saved up some money and when the time came, pulled the trigger on quality estate jewelry at a deep discount. One of her favorite items is a panther ring pictured here. She purchased it there during one of the sales, and it makes her feel good every time she looks at it, because it's amazing and it came after months of biding her time. So good, in fact, that she called it out as one of her top three favorite items of 2022. She eagerly awaited the annual event first in April, then in May, with her eye on a ring that had been priced at $775 for over a year. Finally, she got an email from an online specialist announcing the dates -- June 5 to 15 -- promising a "huge selection of jewelry and watches up to 60% off retail." Great. She went right to the sale items yesterday and sure enough, her target ring was in the sale. Only the price had been elevated to $975 from just a week before and the "sale" price was $685, just 13% less than what that item has been for a year. This is obviously not the only example of shrinkflation people are talking about right now: 🥣 A "Giant" box of Kellogg Company Raisin Bran is the same price it was a year ago, but went from 2 lbs to 1 lb. 🏃♀️ Boxes of Clif Bars have gone from 12 to 10 for the same price. 🎂 Ding dong Dunkin' ditched its free birthday drink for rewards members, offering instead 3x points that you need to spend money to collect. What we're talking about here isn't a staple like cereal or toilet paper. This is a luxury item that you have to really convince yourself you want, even at a 60% discount. In this case, instead of dropping $500 or $600 on something, Lisa's hanging onto the cash she'd have spent with Long's, and this item will likely be in inventory for another year. We'll spend it instead on tires or brakes or stain for the deck, opting for necessities over luxury. If I'm right about the media, you'll read headlines later this year about lazy, cheapskate American consumers not pulling their weight to keep the economy humming. But people aren't dumb. They know a good deal when it's presented to them.

Which is best? Who gives a better one-two punch? A diamond broker or a retailer? Read our comprehensive guide on why it's best to buy your diamonds and custom jewelry from a diamond broker.

I'm a little surprised the article didn't directly make the connection between the rise of custom jewelry and the lag at Signet and other major chains. Doing custom jewelry manufacturing at that kind of scale consumes significantly more time, labor, and administrative energy than doing stock pieces with higher attendant risk of loss from mistakes. An independent jeweler with in-house shop or a partnership with a custom manufacturing company can handle the workload they receive and more easily absorb the risk level, but for a massive company like signet it's exponentially more complicated. This really sets independent jewelers in a position where they can curate their customer experience to what customers want and adapt for new generations of jewelry consumers. While it's not impossible, it'll take some serious retooling of the chain stores approach to try and capture more of this market

Unlocking Handwritten Elegance in High-End Jewelry: Inspired by Malcolm Gladwell, Kathleen Cutler reveals the power of personal notes. Elevate your brand with strategic insights. #LuxuryStrategy #HandwrittenNotes #jewelryindustry https://lnkd.in/gnYejmEy?

Do you know this bag? The company behind this leveraged its extreme desirability to generate $12.5B in revenue in 2022. Yup, it's a Birkin. If you don't know how The Hermes Game is played, boy are you in for a ride. Hermes is a fascinating company. Founded in 1837 as a saddlery company, today it is one of the largest and most desirable luxury brands in the world. They distribute their products exclusively via their 300+ boutiques. LVMH, the king of luxury, has almost 7x its revenue, but less than 2x its market cap. It has an incredible net margin of ~30% and has grown its revenues almost 2x over the last 5 years. Its success is due to -- in part -- to its masterful use of scarcity to drive desirability of its signature products: the Birkin, the Kelly, and other very limited production handbags. These bags are made by a very limited number of French artisans. They are some of the most high quality bags money can buy. And they don't come cheap. The cheapest models start at ~$6000 and can go into 6 figures. The problem is, unless you're willing to shell out at least 2x to 3x its retail price for a *used* bag, there's no guaranteed way to actually buy one from Hermes. You heard that right. If you dropped into an Hermes store today and told the sales associate that money is no object and that you will pay whatever price they name for a Birkin, you'll simply be shown the door. That's because the privilege to purchase one of these "quota bags" (limited to only 2 bags purchased per person per year) is only gifted upon a lucky shopper once Hermes deems that person worthy. And once you're deemed worthy of one of these bags, you can't choose the style, color, finish, or any other details. You are offered ONE bag of Hermes's choosing. Take it or leave it. And if you decide against purchasing it, you don't know when you'll be offered the next one. If you spend some time on Reddit or TikTok, you'll see lots of women sharing tips and tricks with each other to try to become worthy of purchasing one of these bags. At the end of the day, it comes down to building a strong relationship with a Hermes Sales Associate over months and years. Going into the same Hermes boutique regularly to purchase its other extremely high quality -- and extremely pricey -- luxury goods. Silks, scarves, fashion pieces, perfume, that kind of thing. Making sure that you're always dressed well -- with plenty tasteful uses of Hermes product -- when you walk in to make those purchases. And showing how much you LOVE Hermes. And once you've demonstrated enough love -- and spent enough money -- you may be gifted the chance to buy a (random) quota bag. Maybe. At any one time, there are probably more than 1M women around the world waiting for an Hermes bag. Waiting -- and buying other Hermes products in order to try to increase their chances of being "offered." The chase makes these bags infinitely desirable. And Hermes pockets incredible profits as a result.

Here’s a story on how a gold and jewelry retailer successfully liquidated its inventory The Last Sparkle Sale Kothand had always dreamed of running his own gold and jewelry store. After years of working in his family’s business, he finally opened Golden Glow Jewels, a boutique that specialized in intricate gold designs and custom pieces. For a while, the shop thrived, attracting clients who appreciated the craftsmanship and quality of his jewelry. But as the years went by, Kothand began to notice shifts in the market. Competition was intensifying as online stores and large retailers started offering gold jewelry at lower prices, sometimes with added discounts. Foot traffic in his store decreased, and the shelves filled with unsold inventory. To make matters worse, the price of gold had increased, making it harder to sell the higher-priced pieces. The costs of maintaining the store and paying employees were piling up. Kothand knew that unless he acted quickly, his once-thriving business could be in serious trouble. One evening, sitting at his desk and going over the numbers, Kothand realized that his inventory was a huge burden. The unsold gold jewelry was tying up his cash flow, leaving him unable to reinvest in new designs or marketing. He had to make a decision: liquidate the inventory or risk going out of business. Kothand consulted with his financial advisor, who emphasized the need for swift action. Liquidating his gold inventory wouldn’t be easy, especially since gold jewelry was both valuable and sentimental to many buyers. Kothand had to think of a strategy that would move the inventory quickly without damaging the brand he had worked so hard to build. Pl read the Steps in first comment…

“We’re seeing consumers continue to be value-oriented,” she said. I can think of no other jewellery component which offers greater value than lab-grown diamonds ! Gina Drosos talks about how Signet has better analytics so they were able to predict the slower market and hence trimmed down on overstocking. This may well be a clear cut advantage of being big. However Signet is an aircraft carrier that is harder to maneuver and independents are far more nimble. Signet is clearly much more top heavy running so many different banners. It is it not clear exactly how say Blue Nile and James Allen serve different segment and there may be other overlaps. There must be a very large pipeline inventory. It is also not clear whether Signet has had to write down its diamond inventory natural and LGD and what extent it was insulated from price declines via the memo system. Gina appears to be banking on some form of reversion in natural diamonds demand for bridal. She is not saying there will be any initiatives to invest in LGD fashion jewellery which seems to be a major area of growth. Even Martin Rapaport suggested this. For me Signet and Chow Tai Fook Jewellery Group are both big and powerful in their respective markets. They are not very exciting.

The Engagement Ring Sale - Pick a lane and do what you do best - Part 1 Just a few years ago the average sale on an engagement ring at an independent jeweler was around $,5000.00 or more. It was a 3/4 - 1CT center with a beautiful mounting that made the guy a hero. Then a new product came to market that offered consumers what is called “more for the same” in marketing speak. This was terrific as consumers were spending the same money and getting more and so was the jeweler …in his pocket. This quickly eroded to more for less and now we are faced with declining revenue but arguably higher percent margin. As we all know, you can’t eat margin percent as we all pay our bills in real dollars. So, what happens now? What should we do ? It seems obvious to me that there is a finite number of engagements a year and if the price points drop even further, then this beautiful cultural imperative that launched millions of happy engagements and happy jewelers is being challenged. I am sure I am late to party on this but here is a thought or two. I am a father with two married children. One is a woman, and one is a man. In both cases they married wonderful spouses, and, in both cases, they purchased a natural diamond. It meant a lot and it cost a lot. That was the thing. You appreciated me enough to spend that much to say I love you. Lab created diamonds are beautiful and have a real and sustainable place in the jewelry business. That being said can your store sustain a business if $2,000.00 engagement rings are your new norm? Here is my initial suggestion with more to come. First, pick a lane. Who do you want to be as a retailer? Is your customer a prestige or a value shopper? If you want to be a retailer that services the prestige customer, then start with natural diamond. You can always have Lab Grown for those who absolutely want to spend less but is not the headline. Begin to offer Lab Grown in fashion where the sale is less emotive. Let’s find a way to bring customers back into the stores more often by offering great value and options to wardrobe more frequently in fine jewelry. Now... let’s pick a lane and go. Would love to hear your thoughts ! #labcreated #labgrown #diamonds #jewerly

How to price jewelry, here are 15 common successful pricing strategies that will drive sales and profitability to help retailers price their jewelry. Come take a look, message if you are interested💕 https://lnkd.in/djxTh9gJ #Pricing #PricingStrategy #businesstips #BusinessGrowth

In today’s digital age, the landscape of #goldjewelry sales is undergoing a significant transformation. This amazing feature written by MOHAMED DABO for Retail Insight Network delves into the insights of Alloy’s Founder Brandon Aversano on the untapped potential of online #gold jewelry sales and the unique opportunities they present. https://lnkd.in/gqEukZXp #thealloymarket #digitaltransformation #goldsales