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 hundreds of millions, and these technologists will fill the skilled labor jobs available. They will also be the basis for a growing, global market in discretionary luxury products.
The world is now realizing that incomes will boom for the relatively few, while many people will be left out in the cold as their jobs are extinguished. Our global productive efficiencies will be capable of churning far more goods than we can sell.
Top-Bottom mirror of society. Jewelry has always been the "canary in the mine." Economic conditions are reflected in how well jewelers do. Early in 2007, for example, we saw jewelers reporting an unexpected decline in sales, and we know what followed in 2008. In the mid-market and lower market, we just saw some canaries keel.
This past Christmas was clearly a case of a rising tide not raising all boats. Top end guild stores reported a great year, some saying it as their best year ever. Others say it was a difficult year, with sales and profits suffering. The distinction this year was very clear, and does not bode well for the overall health of the industry.
All retail seems to have followed the same track. Walmart seems to be hitting a wall; luxury apparel is selling very well; mid-market and low end retailers ended the year with a frantic flurry of deep discount offers; and a classic New York closeout clothing store, Loehmann's, declared bankruptcy and is closing all its stores. Two stalwarts of multi-line department stores, JC Penny and Sears, are both in real trouble. Retail is being shaken to its roots. And about half of all shoppers search for what they need on the Internet, even if they don't execute their final purchase with an Internet retailer. This has driven margins down, and it will shake out those manufacturers and retailers who do not source well and do not produce efficiently.
Some would say that a shakeout will correct the excess capacity all through the value chain, but I am not sure that will be a reliable fix. An historic problem has been that the jewelry business has low barriers of entry, which invariably leads to the market being over-stored and over-supplied. There is always someone who is totally convinced they have the next great product or just the right marketing scheme. And, once in a while that does happen, as is currently the case with Alex and Ani. But getting the right mix of product, price points, marketing and branding, message, distribution, retail location, etc, is extraordinarily tough. There is very little room for error.
Suppliers and retailers are trying every approach. Innovation - that magic word - takes exceptional talent, and maybe a good measure of luck. Niche marketing takes particularly sharp focus. Internet retailing requires patience and very hard work. We could go on.
There is some growing political awareness of the dangers inherent in a deeply divided public, and there is at least a chance of seeing more progressive solutions that may, in time, start to rebuild the middle class that for so long supported a large part of the US jewelry industry.
In the meantime 2014 will probably not bring discernible changes. We will be dealing evermore with a jewelry business that reflects a society with a growing and deepening income disparity.
Please note: If you are interested in seeing the subjects covered in these 10 days of trends, you might be interested in a full-day seminar being tentatively planned for later this year in New York. We will expand the discussion, cover other issues, and include options for the future. I would be happy to hear your thoughts. Comment here or e-mail at benj@janosconsultants.com. Thanks!
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 hundreds of millions, and these technologists will fill the skilled labor jobs available. They will also be the basis for a growing, global market in discretionary luxury products.
The world is now realizing that incomes will boom for the relatively few, while many people will be left out in the cold as their jobs are extinguished. Our global productive efficiencies will be capable of churning far more goods than we can sell.
Top-Bottom mirror of society. Jewelry has always been the "canary in the mine." Economic conditions are reflected in how well jewelers do. Early in 2007, for example, we saw jewelers reporting an unexpected decline in sales, and we know what followed in 2008. In the mid-market and lower market, we just saw some canaries keel.
This past Christmas was clearly a case of a rising tide not raising all boats. Top end guild stores reported a great year, some saying it as their best year ever. Others say it was a difficult year, with sales and profits suffering. The distinction this year was very clear, and does not bode well for the overall health of the industry.
All retail seems to have followed the same track. Walmart seems to be hitting a wall; luxury apparel is selling very well; mid-market and low end retailers ended the year with a frantic flurry of deep discount offers; and a classic New York closeout clothing store, Loehmann's, declared bankruptcy and is closing all its stores. Two stalwarts of multi-line department stores, JC Penny and Sears, are both in real trouble. Retail is being shaken to its roots. And about half of all shoppers search for what they need on the Internet, even if they don't execute their final purchase with an Internet retailer. This has driven margins down, and it will shake out those manufacturers and retailers who do not source well and do not produce efficiently.
Some would say that a shakeout will correct the excess capacity all through the value chain, but I am not sure that will be a reliable fix. An historic problem has been that the jewelry business has low barriers of entry, which invariably leads to the market being over-stored and over-supplied. There is always someone who is totally convinced they have the next great product or just the right marketing scheme. And, once in a while that does happen, as is currently the case with Alex and Ani. But getting the right mix of product, price points, marketing and branding, message, distribution, retail location, etc, is extraordinarily tough. There is very little room for error.
Suppliers and retailers are trying every approach. Innovation - that magic word - takes exceptional talent, and maybe a good measure of luck. Niche marketing takes particularly sharp focus. Internet retailing requires patience and very hard work. We could go on.
There is some growing political awareness of the dangers inherent in a deeply divided public, and there is at least a chance of seeing more progressive solutions that may, in time, start to rebuild the middle class that for so long supported a large part of the US jewelry industry.
In the meantime 2014 will probably not bring discernible changes. We will be dealing evermore with a jewelry business that reflects a society with a growing and deepening income disparity.
Please note: If you are interested in seeing the subjects covered in these 10 days of trends, you might be interested in a full-day seminar being tentatively planned for later this year in New York. We will expand the discussion, cover other issues, and include options for the future. I would be happy to hear your thoughts. Comment here or e-mail at benj@janosconsultants.com. Thanks!
Comments