By Abe Sherman, CEO
Sixteen Sixty Nine isn’t referring to a year. According to a recent article in JCK online, it is the number of jewelry companies that closed in 2016. During the two trade shows we attended in the past two weeks, store closings was among the topics of discussion (the mood of the country and a lack of high-end sales were others). There are a lot of nervous retailers and suppliers who don’t know how the coming years are going to shape up, having just come off of a year with very mixed results.
If there was anything resembling a pattern, it was that higher-end sales were disappointing last December. That said, overall sales were mostly good to okay. But there is a palpable mood of uncertainty among retailers and manufacturers and that was what everyone was asking us about… What’s going to be? What is our industry going to look like in 5 to 10 years?
Store closings are not a bad thing when the overall economy is fairly robust – which it has been. Growth is still occurring and markets (stock, housing) are strong and the majority of retailers who are closing are “retiring” according to the article. That leaves fewer competitors in each of your markets. This also provides an opportunity to find seasoned staff, including goldsmiths and watchmakers. But the other concern was the newsworthy uptick in online sales. Someone grabbed a hold of me the last night of the Centurion show to tell me that Amazon is our biggest headache and they are out to kill us! which may be true.
Brick and mortar retailers who remain are going to have to provide a shopping experience that customers simply won’t get online or from other stores. Retailers are also going to have to be lean and mean – partnering with fewer suppliers and really (and I mean really) managing their inventories; replenishing weekly or daily, communicating with your vendors and training your staff like crazy. Dead wood? You won’t be able to afford people who are not performing – everyone, in each department will need to understand their jobs and be very, very good at them.
You are going to have to invest. Invest in your people, in new technology, in marketing, in community events, in CRM programs, in yourself. You must differentiate from your competition – with in-store experiences, custom designs, new designers, augmented reality and competitive pricing for generic items.
There are simply too many variables to have a clear view of how our industry is going to do in the short run; political, social, technological and international. Are trade wars on the horizon? Is that a bad thing for overseas manufacturers but good for domestic manufacturers who may need to ramp up once again? We simply don’t know, just that things are changing, and fast.
Tom Friedman wrote a new book (Thank You for Being Late) that I’m in the middle of reading. In it, he talks about how fast everything is happening now. Technology, social and climate changes have all accelerated at a pace that we have not adapted to and it’s causing a great deal of uncertainty and, therefore, stress. We all feel it and many in our industry are reaching for things to help us. IF ONLY we had ecommerce or better SEO or a new Sales Manager…. Our problems would be solved. It’s not that simple.
What are you doing to adapt your business to these changing times? Take inventory of your skills to adapt to the changes in your marketplace and look for the right tools to create the best strategy for 2017.
For the full JCK article on store closings, click here