GemThoughts

The end of growth? The sale of Zales to Sterling announced this week did not come as a surprise to many.  It looks like one of the final strokes of a long term consolidation that has occurred in the mall-based jewelry field - in all of retail, actually - since the years of near-rampant expansion in the last century. What is notable about all the consolidations we have witnessed is not so much that that the stronger, more aggressive companies have slowly taken over particular channels, as that no new competitors have come up within those channels.  In mall jewelry there have been a couple of efforts, but they too have been sucked into the black hole of consolidation.  People make note of the handful of chains that have disappeared in the last few years.  But I remember making a list in the late '80s of mall chains that were bought out or absorbed, very often by Zales or Sterling.  I came up with 40 names. So is all this just an accumulation of power, or is there more to it? 

 This past Christmas might have been another indicator of how our society has changed.  For decades we have accepted that 70% of our economy is driven by consumerism.  But it now seems as if consumers across all income brackets are stepping back from impulsive buying.  People are not trying to keep up with the Jones's.  Or maybe they are, because the Jones' are changing too. Here is how the Luxury Marketing Council described an upcoming session.  "All the most current research on the changing definitions of “luxury” agrees that “luxury” is no longer about ‘stuff’ or ‘boast and brag;’ but about the experience, appreciating tradition, the savoring of the special, the bespoke, the artisanal, the unique, the precious. AND also about the memory of that experience and the ability to tell a story about it to one’s friends and families." This parallels a study finished about a year ago by American Express and the Harrison Group which predicted that huge amoun

It would be impossible to count the times we have all heard advisers tout the need for us to build a "brand" for ourselves and our companies.  The efforts to do that over the years have been intense and expensive, and largely failures. This, after all, is the Age of Advertising.  I find ads that appeared in old newspapers and magazines to be quaint.  Perhaps they are innocent.  All they seem to want to do is let you know that a new snake oil mixture is available, or some new durable boots.  Those were not ads so much as public notices. But in this Age, it is often hard to even know what is being advertised.  We see elaborate ads on TV that finally sneak in a product name at the end.  It is as if there is some shame in being so crass and commercial as to disturb our fantasies by showing a name.  Of course, these way-out ads are usually for products that aim to dip into our deepest desires and dreams.  A soap ad comes right out and says what it needs to.  Not so for super

For many years now, we have been riding the Boomer wave.  It is hard for us to recall a different age in jewelry marketing. The Boomers were born into a post-war period of great retail expansion.  We became a country driven by consumerism and acquisition.  Advertising skills were turned to sharpening the public's desire to acquire.  Two cars in every garage, replaced often with the latest models.  Suburban life became a realized dream, and the rise of credit cards meant that we did not have to wait.  We could have it all right now! Part of that was an important change in the targeting of fine jewelry.  Pre-war, jewelry, and particularly diamond jewelry, was primarily for the "upper classes", who wore their pieces for evening wear and special occasions. By the 1960's, a diamond engagement ring became a must, and we then saw the rapid development of mass-market jewelry.  Stud earrings, solitaire pendants, diamond bands, bypass rings, clusters, and more became hug

We tend to believe that things change slowly in retail.  After all, Macy's, Tiffany and Zale's have been around now for many years.  Independent stores, from the local shoe repairer, to the corner diner, to the independent jeweler, come and go, usually when a new generation opts not to enter the family business.  But, of course, it is not that simple. Many years ago, as a store closed, another came along to replace it.  There was growth as population grew, as new towns and suburbs developed and as new ranges of products came onto the market.  No need for auto dealers and electronics stores when there was little or no need for either. The explosion in retailing started in the 1950's, a period that saw the start of the Interstate Highway system, and the concurrent boom in mall construction.  Independent retailers moved from downtown to mall, discounters and catalog showrooms emerged from nowhere, local department stores and the big three cataloguers (Sears, Ward and Penn

It is easy to get a bit down on the outlook in the jewelry business.  Except for those who have managed to position themselves well at the top of the market, or those who have hit a marketing mother lode, the balance of the business is floundering.  That is understandable given that we are still fighting to get fully out of a major financial crisis.  People are nervous about jobs, getting them or losing them, and everyone knows we are in the midstream of a new age - the technological age that is rendering much of what we do obsolescent at a stunning pace. Still, much of what we see in the business has not changed, mostly because so many believe that there is little reason to think it can change.  New designs are drawn up, models made, stones picked, samples produced, a price list is printed, and presto!  We have a new "collection."  The latest "creations."  (Two words that I think have become as threadbare as an old doormat.)  For those who have really been

All through the history of the jewelry business, and especially the diamond business, the support offered by banks to suppliers has been an essential part of the industry's growth and prosperity.  This has been particularly true in the decades after WWII, a period in which there was steady expansion of the US economy and a rapid recovery and industrialization in Europe and Japan.  People were making more money, the most since before the Great Depression, and the war years had built a backlog of consumer needs that were being satisfied. De Beers played a key role in the expansion of appetite for diamonds and thereby the desire for people to own jewelry in general.  De Beers played a very important role in another way.  They acted as the market buffer, holding stocks when the economy suffered recessions, and releasing more when boom times returned. This was an excellent environment for banks.  They could lend against inventories, with De Beers protecting their backs on diamonds;

We read a great deal about the economic divide in the US and how the gap is growing.  Actually, it is a global problem, with many countries, both developed and emerging, now trying to deal with this issue.  When I think of my own experiences in various workplaces, it becomes inescapably clear that this problem has had a long arc, and is not about to change. Simply put, a 200 year development of technologies is now reaching warp speed, and much of it is aimed at eliminating the need for people to perform fairly routine and repetitive chores.  The assembly line now has a few supervisors.  We are now watching the process move on a very fast track in China, India and elsewhere in Asia and the Americas.  It is as if we are observing our own industrial development in double time. Just imagine a world that has 7 billion people, 6 billion of them of working age, but there are only 4 billion jobs.  Make no mistake, we are all in the same labor pool.  Education is improving the skills of h

Man-made diamonds (MMD's) have been around for quite a while now.  It has been a constant subject of discussion from the outset, ever since the technologies have evolved from production of industrial qualities.  GE and Sumitomo developed industrial production decades ago, and their productions have been important for a wide variety of applications, all of them completely free of controversy. That changed as methods for producing gem qualities first appeared in Russia.  HPHT (high pressure, high temperature) equipment was used for both improving certain qualities of diamonds, and for the production of new diamonds, a more lengthy and difficult process.  Somewhat later, CVD (chemical vapor deposition) developed, a quite different process that "grows" diamonds by depositing carbon atoms onto a diamond seed. In recent years, both processes have been used to expand the production of diamonds, often in concert.  CVD diamonds are often subjected to HPHT treatment to enhance

I took a shot last year at the 'top 10 trends' for 2013.   So I am taking another shot this year.  But I thought I would do it as 'a trend a day' for the next ten days. We continue to see the gem and jewelry business as a whole changing day by day.  The number of jewelry retailers and manufacturers in the US continues to slowly decline, now about a thirty year trend.  Diamond prices are volatile while colored stone prices reflect growing scarcities.  Diamond distribution still hangs onto the "sight" process, but there are more and more auctions and special sales.  Worst of all, there is no conference (no, not a trade show) where the pressing issues for all sectors of the industry are discussed openly and thoroughly. In any case, I offer my Top Ten, in no particular order.  None of these are just for 2014.  All of them have been cooking a while and will be with us for some time to come. Growth of recycling .  I remember my first road trip, a zillion year