ColumnistsMar 12, 2024
The PR Adviser: Closing Sales and Following UpColumnistsMay 15, 2024
Squirrel Spotting: Why Retailers Struggle to Fire Brands
Why do so many jewelers keep lines that are not selling? Peter Smith thinks the answer lies in these two behavioral principles.
Peter Smith is an industry consultant, speaker, sales trainer, and author. He can be reached via email at TheRetailSmiths@gmail.com.
Brands have been in the news of late, with Watches of Switzerland’s acquisition of the U.S. arm of Roberto Coin, and Richemont buying Italian jewelry brand Vhernier.
This follows earlier news that De Beers Group will dissolve Forevermark in the United States and other markets and relaunch it as a diamond jewelry brand in India.
And, of course, we had last year’s announcement that Rolex is acquiring Bucherer.
These developments got me thinking about a related question, and that is, why do retailers struggle to fire brands when they no longer perform for them?
You might think such decisions would always be as simple, as the numbers are either working or they’re not.
If the sales and profitability are good for business, you keep the brand. If the metrics don’t work, you fire the brand.
How complicated is that? As it turns out, it’s pretty complicated.
In the face of declining sales, reduced margins, and unhealthy inventories, retailers continue to forge ahead with brands that once were important to them but have long since ceased to enjoy favored-partner status.
They don’t like the brand enough to cheerlead for it internally or externally but still remain indifferent enough to continue to defer on separation decisions.
Psychologists have several explanations for why this happens, but the two that stand out for me are the status quo bias, and the sunk-cost fallacy.
In the first instance, the status quo bias, we know we should make a change, but the headaches associated with doing so far outweigh the benefits of pulling the plug.
In “A New Way To Think: Your Guide to Superior Management Effectiveness,” Roger Martin wrote, “In short, research into the workings of the human brain suggests that the mind loves automaticity more than just about anything else—certainly more than engaging in conscious consideration. Given a choice, it would like to do the same thing again and again.”
There is a tendency to rationalize the status quo bias as being related to habitual loyalty; we do it because we’ve always done it, it’s easy. The reality, of course, is that it is more aptly related to inertia.
We don’t want to change because doing so means a ton of work, and we’re not looking to take on more work.
Related stories will be right here …
This follows earlier news that De Beers Group will dissolve Forevermark in the United States and other markets and relaunch it as a diamond jewelry brand in India.
And, of course, we had last year’s announcement that Rolex is acquiring Bucherer.
These developments got me thinking about a related question, and that is, why do retailers struggle to fire brands when they no longer perform for them?
You might think such decisions would always be as simple, as the numbers are either working or they’re not.
If the sales and profitability are good for business, you keep the brand. If the metrics don’t work, you fire the brand.
How complicated is that? As it turns out, it’s pretty complicated.
In the face of declining sales, reduced margins, and unhealthy inventories, retailers continue to forge ahead with brands that once were important to them but have long since ceased to enjoy favored-partner status.
They don’t like the brand enough to cheerlead for it internally or externally but still remain indifferent enough to continue to defer on separation decisions.
Psychologists have several explanations for why this happens, but the two that stand out for me are the status quo bias, and the sunk-cost fallacy.
In the first instance, the status quo bias, we know we should make a change, but the headaches associated with doing so far outweigh the benefits of pulling the plug.
In “A New Way To Think: Your Guide to Superior Management Effectiveness,” Roger Martin wrote, “In short, research into the workings of the human brain suggests that the mind loves automaticity more than just about anything else—certainly more than engaging in conscious consideration. Given a choice, it would like to do the same thing again and again.”
There is a tendency to rationalize the status quo bias as being related to habitual loyalty; we do it because we’ve always done it, it’s easy. The reality, of course, is that it is more aptly related to inertia.
We don’t want to change because doing so means a ton of work, and we’re not looking to take on more work.
As for the principle of sunk-cost fallacy, that’s a very real thing and a powerful impediment to change.
We justify the years we’ve spent, the money we’ve invested in inventory, training, marketing, and even shop-in-shops.
We worry our team will struggle with change, when, in fact, they’re often well ahead of the principles of the business, as they’ve lived it on the front lines and have seen the decline in interest and/or effectiveness of the brand.
We also worry that customers we’ve sold a given brand to over the years will regret having purchased the brand from you if you choose to discard the line. Will they feel betrayed and take their business elsewhere?
Every restaurant that ever closed its doors has disappointed some diners. Every store that has ever closed had some fans. And every brand that was important at one time has customers who are collectors and repeat buyers.
The problem is, in all cases, there just weren’t enough of them. Things change and people move on. They are rarely as distraught as your worst fears may conjure.
In fact, one of the paradoxes of consumer behavior is that while it is commonly accepted that shoppers love automaticity, and automaticity often comes from brand consistency, we are also apt to seek out change.
In “Using Behavioral Science in Marketing: Drive Customer Action and Loyalty by Prompting Instinctive Responses,” Nancy Harhut wrote, “People are hardwired to notice things that are different from what surrounds them.”
It’s one of the reasons many retailers love to go to trade shows, to experience what’s new, and it is one of the reasons I believe quality physical retail stores will always be relevant.
Customers love the sense of excitement and discovery often delivered in the best retail environments.
As for those brands you need to address, my advice is, if you can’t bring yourself to completely sever ties, recalibrate your investment to align with the brand’s relevance to your business today, not what it used to be.
That means adjusting your inventory, your case space, and your training and marketing spend.
Block out the noise, including the noise inside your head, and do what’s right for your business.
Happy retailing!
More on Columnists
The Latest
SurveysJul 16, 2025
Signet Jewelers Falls Lower on NRF’s ‘Top 100’ Retailers ListThe middle class is changing its approach to buying jewelry and affordable luxury goods, the NRF said.
FinancialsJul 16, 2025
Richemont’s Jewelry Sales Up 7% in Q1It marks the third consecutive quarter of growth for Cartier, Van Cleef & Arpels, Buccellati, and Vhernier.
WatchesJul 16, 2025
The Top-Selling Rolex Models of the Last 15 Years, According to Bob’s Watches The reseller’s market trends report, based on its sales data, also shows exactly how much Rolex prices have jumped since 2010.
Brought to you by
Investing in the Next Generation of Bench JewelersThe Seymour & Evelyn Holtzman Bench Scholarship from Jewelers of America returns for a second year.
AuctionsJul 16, 2025
Christie’s To Honor Dinh Van With ExhibitionThe auction house will be hosting a retrospective paying tribute to jeweler Jean Dinh Van and his company’s 60th anniversary.
Weekly QuizJul 10, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
IndependentsJul 16, 2025
Clyde Duneier Ushers In Fourth GenerationJake Duneier and Danielle Duneier-Goldberg have stepped into the roles of CEO and president, respectively.
CollectionsJul 15, 2025
Boucheron’s New High Jewelry Calls Attention to Nature’s ImpermanenceThe “Impermanence” collection contemplates nature through the Japanese art of Ikebana (flower arranging) and philosophy of wabi-sabi.
Brought to you by
Jewelers of America is Headed to Las Vegas for JCK 2025The countdown is on for the JCK Las Vegas Show and JA is pulling out all the stops.
MajorsJul 15, 2025
James Avery Expands to 2 More StatesThe Texas-based jewelry retailer has set up shop in Tennessee and Arizona.
Events & AwardsJul 15, 2025
Neiman Marcus Vet Joins Couture as Brand Director Eric Ford will step into the role, bringing with him decades of experience.
IndependentsJul 15, 2025
Ben Bridge Jeweler Acquires Olympic ManufacturingIn addition to improved capabilities, the acquisition will allow the jeweler to offer support to other independent jewelers.
CollectionsJul 15, 2025
Guzema Debuts First Colored Gemstone JewelryThe “Celestial Blue” capsule collection campaign features Olympian Kateryna Sadurska.
MajorsJul 14, 2025
Nanis Opens First StoreThe seasonal store, located in Mykonos, Greece, offers exclusive events, personal styling, and curated experiences.
IndependentsJul 14, 2025
It’s the Summer of Love at Long’s JewelersThe New England jeweler is hosting a bridal event for the month of August.
SourcingJul 14, 2025
Ethical Gem Fair Heads to SeattleThe trade-only event will host its debut fair in the Emerald City later this month.
Events & AwardsJul 11, 2025
The Edge’s Annual Conference Returns in SeptemberIts sessions will focus on inventory strategies, staff performance, retention and acquisition, emerging market trends, and more.
CollectionsJul 11, 2025
Piece of the Week: Miseno’s ‘Arco’ EarringsFor its 10th anniversary, Miseno designed the “Arco” earrings based on the Arco Felice, an arch conceptualized in A.D. 95 in Miseno, Italy.
Policies & IssuesJul 11, 2025
James Avery to Donate $1M to Texas Hill Country Relief EffortsThe jewelry company is one of several contributing to relief efforts in the region after the recent floods.
TrendsJul 11, 2025
Kelly Osbourne’s Engagement Ring Is Sweet as HoneyInspired by fiancé Sid Wilson’s nickname for her, the white and yellow diamond ring features a unique honeycomb design.
CollectionsJul 10, 2025
Penny Preville Celebrates 5 Decades of Jewelry DesignThe brand is marking its 50th anniversary with a limited-edition bangle, high jewelry suites, new collections, and more.
IndependentsJul 10, 2025
Steven Goldfarb to Retire, Close Alvin Goldfarb JewelerGoldfarb said changes in the industry, coupled with his age and the updates needed to modernize his business, drove his decision.
MajorsJul 10, 2025
LVMH Names New Chairman, CEO of the AmericasLongtime LVMH executive Michael Burke has stepped into the role.
Events & AwardsJul 10, 2025
IAC Gold and Diamond Conference Returns to NYC Central topics of next week’s event include climate action, labor rights, artisan preservation, and value retention in producing countries.
MajorsJul 10, 2025
Hearts On Fire Appoints New Sales DirectorVickie Rokkos has joined the jewelry company as its new national sales director of North America.
SurveysJul 09, 2025
Jewelry Stays Strong as Luxury Market Slows, Bain & Co. Says Turbulence will be the new baseline for luxury as it faces its biggest potential setbacks in 15 years, a recent report said.
Supplier BulletinJul 09, 2025
JCK Unwrapped: Trends, Insights & Post-Show TipsSponsored by Rio Grande Jewelry Supply
CollectionsJul 09, 2025
Cece Jewellery’s New Fruit Jewels Celebrate Life’s SweetnessThe “For the Love of Fruits” collection features five fruit pendants, each holding a different meaning.
