After last year’s record number of store closures, our jeweler friends will be happy to know that the American retail is finally rebounding. Tax cuts have left more discretionary income in consumers’ wallets. Luxury retailers, such as jewelers, stand to benefit the most .
Relationships are key
Because Amazon has so changed consumers’ expectations, the brick and mortar stores that will thrive in this market are those that offer an in-person experience that no online seller can match. Jewelry stores benefit from a strong customer preference for seeing their wares in person. They solidify their advantage when their sales clerks are seen as consultants, guiding customers through matters of gemology and style to find the right fit tailored to the customer’s budget and occasion.
Stores that are strong in repair work, sizing, and appraisal add value to the customer experience that cannot easily be replicated on the web. When done well, they also position staff to step into the role of trusted advisor to the customer on all things jewelry. They build a relationship that will come to the consumer’s mind when it is time to buy.
The online juggernauts offer prices that independent stores struggle compete with partly because the online model requires less overhead, but also because they benefit from economies of scale . They use their massive market clout to demand price cuts from vendors, and pass those savings along to consumers.
One arena where independent jewelers often, but need not, cede the advantage is in precious metals refining. Pease and Curren’s highly efficient process and facility allow it to offer our smaller independent customers the same competitive pricing and returns enjoyed by the many large chains and manufacturer customers that choose us.
When an independent store sells its precious metal scrap to a cash buyer or some other middleman, it leaves value on the table. You can be sure that a large online juggernaut is not making the same mistake. Over time, these discrepancies in efficiency will inevitably lead the independent store to higher prices and lost revenue. The New York Times cautions that even during the current retail upswing, stores “that have failed to evolve are in bankruptcy or on the brink.”
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 This is unsurprising. Demand for luxury goods tends to be highly elastic that is, to change dramatically in response to shifts in pricing. Consumers must buy necessities in any market but can easily defer buying luxury goods until conditions improve.