Peter Smith: Is That All There Is? Have We Peaked?

I’m starting this column from Heathrow Airport in London on the back end of a terrific vacation with my better half.

In addition to serving as a much-needed break from the daily machinations of doing our respective jobs, this trip has proven to be a wonderful catalyst for reflection and perspective.

We’ve had Premier League football (my wife Sherry’s first experience of “the beautiful game” in England) at Craven Cottage, home of Fulham FC, as they took on and, unfortunately, beat my brother’s favorite team, Leicester City.

We had a marvelous day in Oxford, imagining Harry Potter villains were watching us, perched atop and within the hallowed buildings of Christ Church, which counts multiple prime ministers and esteemed other foreign leaders amongst its alum … oh and, lest I forget, the author Lewis Carroll of “Alice’s Adventures in Wonderland” fame.

I discovered that detail while enjoying high tea in the Alice Room at The Randolph Hotel and wondered aloud why the walls were adorned with cool and slightly funky oversized artwork depicting Alice and friends in their Wonderland.

We also loved a couple of trips to Portobello Road Market in Notting Hill (yes, the Hugh Grant and Julia Roberts Notting Hill).
 

On our second visit, absent the throngs of shoppers from our Saturday sojourn, we were enjoying lunch outside at a small Italian restaurant when our conversation turned to a familiar topic for us, the retail experience.

We loved the canopy of colored umbrellas we’d seen at Camden Market a couple of days earlier.

We laughed at the sight of a small Fiat car, sliced down the middle and serving (sorry for the pun) as brilliant window art in a pizza restaurant, and we had generally marveled at the assortment of fun and interesting retail theater in Soho and throughout our vacation in the Greater London area.

As we consumed the myriad sights and sounds, I was reminded of the power of fun retail experiences, and how, at its best, physical retail can be the most wonderful theater, emotionally engaging, experiential, and rewarding in and of itself.

In contemplating another fabulous year in independent retail jewelry here in the United States—as a strong August has the independents now tracking ahead of what ended up being a fantastic year in 2023—I was reminded once again that the spoils go to those who fully embrace the best of what retail can offer and execute well. 

I know of retail jewelers who are outperforming the market and, regretfully, I also know far too many who are underperforming. 

In a post-pandemic environment, where the rising tide of recent years allowed all-comers to jump aboard, the minimum requirement now is solid execution of retail fundamentals. 

In recent weeks, I’ve had two industry colleagues ask me if I thought we had peaked; if, in one instance, perhaps his business had plateaued and, in the second instance, if we as an industry have begun to see a maturation of the market in the U.S. 

In answer to the maturation of the market, I ask you to cast your memory back to 2019. 

The jewelry business had come off a phenomenal year, and we were asking ourselves how we got there and how long the ride could possibly last. Had someone told us then that we would see more than 50 percent growth in the next two or three years, we wouldn’t have believed it. 

But we did get there, and customers voted with their wallets and made it abundantly clear that jewelry and timepieces mattered, and they were glad to take discretionary dollars and spend them in jewelry stores when they couldn’t spend them elsewhere.

The abiding message of the period was that jewelry stores held great appeal to consumers, and they were happy to reward stores with bigger returns than we could ever have imagined.

As 2023 turned to 2024, the rising tide that rewarded everybody has become a lot more discerning. 

Dysfunctional retailers are being found out. We are seeing, to paraphrase Warren Buffett, who was swimming naked when the tide went out. 

It is easy to mask a multitude of sins when driving record sales. 

That condition wasn’t specific to the events of recent years (if you look closely enough, you could see it all over our industry at retail and on the supplier side), but it was magnified beyond our wildest imagination. 

It was, quite frankly, easy to believe you were a good retailer even though you were not. 

Conversations about peaking, or maturation of markets, make sense off the back of superb execution, and superb execution can be as complex as Carroll’s rabbit hole. 

What it must include, however, is an experience that excites the senses—scent, visual, sound, lighting, touch … perhaps even an old Fiat—and an attitude of “less not more” when it comes to product stories; don’t make your customers work too hard to decide what you are. 

It should include technology that enhances the customer experience, data analysis (don’t get me started on the gut-instinct merchants) and hiring the right people (you not having a plan does not mean there are no viable candidates). 

It also must surely include an ongoing training plan designed to influence consumer behavior (which does not mean loading up your sales team with so much product information that they become a danger to customers), and it should include a path to engage both career-minded employees, and those just looking for engaging work that aligns with their quality-of-life needs. 

It should offer a compensation plan that reflects an improvement over what they can earn in less-taxing environments and the chance to work in a culture built on respect for all employees, one that affords them the opportunity to do good work with good people. 

I am and will remain a staunch believer in great retail and great retailers. The numbers reflect that there are enough of them doing enough good stuff to see this remarkable journey continue for the foreseeable future. 

For retailers who have regressed from the highs of recent years, this is not the time to assign blame or look for scapegoats in your organization, but to honestly reflect on your execution, identify what needs to change, and reach out to people who can help shine a light on missed opportunities in your business. 

In short, it’s time to get busy being great.  

Happy retailing!