Other

5 modern forces that shaped the industry, part II

OtherDec 22, 2014

5 modern forces that shaped the industry, part II

In part two of a two-part series, columnist Jan Brassem examines the final three factors he says disrupted and transformed the jewelry industry over the past 35 years.  

Brassem-article.jpg
Jan Brassem is a senior partner at MainBrace Global Partners, a global jewelry advisory and & firm with offices in New York and Hong Kong. You can e-mail him at Jan@MainBraceGlobalPartners.com.

As discussed in Part I, I’d like to briefly summarize five unique industry forces (there are more, of course) that, in my view, transformed the U.S. jewelry industry from what it was in my “good old days” to what it is today. 

I’ll use my non-jewelry education, combined with 37 years of industry experience, to take look a look back through the rear window. The first two dynamics, gold price gyrations and the tech industry’s jewelry store “fly-by,” were presented in Part I

3. The industry in consolidation
We’ve all been reading about the acquisition of the Zale Corp. by Signet Jewelers. Signet now operates more than 3,600 jewelry stores under various corporate names. 

Although the Zale acquisition was one of the most publicized financial transactions, it was by no means the only one. There have been plenty of transactions recently although few are well publicized.  As a matter of fact, financial transactions in the jewelry industry are now at an all-time high.

The forms of cooperation, such as acquiring a company, merging with another, developing an alliance, etc. are endless. They are as effective a tool as brand strategy or product merchandising--just a little more complicated. 

In my day acquisitions, mergers or any “restructuring,” were not common, at least not as it is now. Jewelers have only recently started to realize that in the current climate of globalization, technological advances, segmented markets and increased competition, growth through a strategy of merger and acquisition, or other sophisticated transactions, can be faster and cheaper than organic expansion.  

Thirty years ago, sagacious jewelers usually sold their firms because they realized, after spending decades in the store, it was time to retire and enjoy the remaining years in Florida, or wherever. Usually, there were no relatives in the business, no succession. 

The one exception, if I remember correctly, was one of our customers, a progressive buying group on the West Coast. The group had 17 stores with 10 store owners/buyers. Today they have almost 120 stores, including the “old” members. 

Today’s jewelers have moved away from their comfort zone. Instead of buying diamonds and considering showroom décor--things they have been doing for years--they are trying to recognize the brain-numbing matrix curves and SWOP analysis, metric averages and implementation plans. 

As I’ve written before, today’s jewelry owner will no longer be known as a jeweler, but transformed into a sophisticated businessman. 

From my experience in working with them, the acquisition process changes these veteran jewelers into dynamic and enthusiastic strategic thinkers. Whether it’s due to these new strategies or exposure to innovative ideas, he or she now seems to have a new outlook on life itself.

4. Marketing channel pandemonium
In the “good old days,” there were only a few retail marketing channels that would carry a jewelry line. 

Some of these are no longer viable (Best Products and Service Merchandise come to mind.) Other channels, like jewelry wholesalers--also called jewelry distributors, which carried watches as well as jewelry supplies--closed their doors too. (Bernstein Biggard and Norvell Marcum were household names then.) 

Other channels such as department stores, like Macy’s, were as popular then as they are now. Ironically, even in those days, Zale Corp. was experiencing some financial distress as was J.C. Penney. Even then, Tiffany was the leader of the pack in terms of quality and elegance.  I assume in profitability too.

Now comes the exciting part. 

Enter Home Shopping Network Inc., a/k/a HSN, quickly followed by QVC and several other me-too, HSN-type operators. Their arrival showed the industry and the jewelry buyer that expensive jewelry could be shipped by mail, or FedEx, with only minimal risk of theft.   

Although it took at least 10 years to develop, the maturation and marketing sophistication of the Internet changed the jewelry industry forever. Now every retailer--jewelry and non-jewelry, large or small, domestic or international--had the ability to sell their products online as well as through their brick-and-mortar facility. Having a web site, as the saying goes, allows anyone to sell jewelry from their basement in pajamas. 

These distribution channels naturally morphed into companies that marketed via web sales only. Blue Nile, through careful sourcing and merchandising, captured a solid market share of the diamond wedding ring business. 

Today’s consumer, compared to my “what’s-a-computer?” generation, is now technologically sophisticated. Many were using computers before their first day of school. The computer became their training wheels, so to speak. They are the “Internet Generation.”

It would take a thick marketing volume detailing, with extensive U.S. and international market research, which strategies are necessary to sell to this new Internet-savvy customer amid this tumultuous distribution environment. If you haven’t designed a strategy by now, start strategizing. 

5. Global competition and opportunity
Rapid urbanization and growing wealth are helping to create new markets for jewelry in nations such as Brazil,

India, China and Russia (known as the BRIC countries, although Russia is temporarily off the list.) 

China, of course, with its 1.4 billion population and insatiable appetite for anything jewelry, is a hot market, says Lyle Rose, our firm’s senior partner in Hong Kong.  

One challenge for retailers in emerging markets is illegal imports. Another issue for American jewelry retailers in new markets is establishing brand awareness. Jewelers might need to conduct brand awareness campaigns and advertise heavily to grow in areas with a wide-open retail market environment.

There is presently a cross-border acquisition frenzy by foreign firms acquiring U.S. firms. It is felt that, in the long run, an acquisition strategy will accelerate the buyer’s market penetration and minimize the cost. For example, Boston’s Hearts on Fire was acquired by China’s largest retail jewelry firm, Chow Tai Fook.  

The best example of the escalating global activity in the jewelry industry is the growth of international jewelry trade shows. In the “good old days” there were but a handful, led by the JCK and JA New York shows in the U.S., the Baselworld show in Europe and the Hong Kong show. 

Today, there are many more all over the world, in places including the Middle East, Turkey, China and even Vietnam.  

When all is said and done, what is the prognostication for our industry, at least through 2020? 

McKinsey and Co., the foremost consulting and advisory firm in the world, writes the following: “It seems likely that the jewelry market of 2020 will be highly dynamic, truly globalized and intensely competitive.” 

Those jewelry companies that can best anticipate and capitalize on industry-changing trends--particularly the five described in these two columns--will shine brighter than the rest. 

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

Stock image of police cars with their lights on
CrimeMay 23, 2025
JSA Shares Holiday Weekend Security Tips Amid Spike in Burglaries

JSA’s Scott Guginsky provided a list of nine security measures jewelers should observe while locking up for the long weekend.

Bliss Lau Bright Ring
CollectionsMay 23, 2025
Piece of the Week: Bliss Lau’s ‘Bright’ Ring

From Lau’s “Love of a Kind” series, the engagement ring was inspired by the moon and holds a different meaning depending on how it is worn.

GIA pearl report
GradingMay 23, 2025
GIA Updates Pearl Classification System

The lab has adjusted the scale it uses for nacre grading.

antique_Vegas_2024_by_headshot_stories_9454.jpg
Brought to you by
Las Vegas Antique Jewelry & Watch Show: Showcasing the Most Collectible Merchandise from Across the Globe

Gain access to the most exclusive and coveted antique pieces from trusted dealers during Las Vegas Jewelry Week.

GCALbySarine Diamond Journey Certificate_1872x1052.jpg
Supplier BulletinMay 22, 2025
How to Put Natural Diamonds Back in the Spotlight

Sponsored by GCAL by Sarine

Weekly QuizMay 22, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
The late West Virginia jeweler David Ettinger
CrimeMay 22, 2025
NY Jeweler Sentenced in Shoving Death of Colleague at IJO Show

David Walton will serve three years’ probation after an incident in a hotel bar led to the death of West Virginia jeweler David Ettinger.

Watches of Switzerland store in Mall of America
FinancialsMay 22, 2025
Watches of Switzerland’s Full-Year U.S. Sales Climb 14%

The retailer also provided an update on how the tariffs situation in the U.S. is affecting its business.

Supplier Spotlight -Recorded-Webinar.png
Brought to you by
Watch: The Winston Red: GIA Examines the Smithsonian’s Newest Addition

Supplier Spotlight Sponsored by GIA

Jorge Adeler, Wendy Adeler, Valentina Adeler
IndependentsMay 22, 2025
Adeler Jewelers Celebrates 50 Years

The family-owned jeweler in Great Falls, Virginia, will be celebrating its golden jubilee with a year’s worth of events.

Jose Hess Design Awards 2025 Trophy
Events & AwardsMay 22, 2025
Jose Hess Design Awards Announce Judges

The nonprofit elected five judges who will decide the winners of its design competition.

MJSA 2025-2026 Buyer’s Guide
MajorsMay 22, 2025
MJSA Releases 2025-2026 Buyer’s Guide

This year’s edition includes articles on the favorite tools of notable designers, evaluating when to outsource production, and more.

Bulgari Invisible Violet Necklace and Rainbow Flow Necklace
CollectionsMay 21, 2025
Bulgari Highlights Its Colorful Past in Phenomenal ‘Polychroma’ Collection

The jeweler’s high jewelry collection features extraordinary gemstones, like a 241.06-carat emerald and the world’s fourth-largest spinel.

Industry analyst Edahn Golan
ColumnistsMay 21, 2025
Edahn’s Take: Analyzing the 2025 ‘$100 Million Supersellers’ List

In a special column for the State of the Majors, Edahn Golan breaks down what the top-performing fine jewelry sellers are doing right.

Beyoncé bolo tie necklace
MajorsMay 21, 2025
Beyoncé Dons Brilliant Earth Necklace During Cowboy Carter Tour

The bolo tie necklace is inspired by “Queen Bey” and set with a nearly 15-carat black diamond.

Gem Legacy logo
SourcingMay 21, 2025
Gem Legacy Expands Advisory Council

The nonprofit focused on mining communities in East Africa has added three new members to its advisory council.

Annie Doresca
MajorsMay 20, 2025
Annie Doresca to Lead DCA as New CEO, President

Current Diamond Council of America President and CEO Terry Chandler is set to retire in January 2026.

QVC Group logo
FinancialsMay 20, 2025
QVC Group to Voluntarily Delist from Nasdaq

The company's Series A shares will continue to trade following a reverse stock split while its Series B shares will be delisted.

National Jeweler columnist Peter Smith
ColumnistsMay 20, 2025
Peter Smith: Leading Through Change

Communicating clearly with your staff is key to navigating turbulent times, writes columnist Peter Smith.

Luis Morais Miami Beach Flagship Interior
IndependentsMay 20, 2025
Luis Morais Opens Flagship, Launches Collection Celebrating 25 Years

The “Inner Journey” collection debuted as the brand celebrated its 25th anniversary, with designs inspired by Morais’ journey.

Exterior of Tanishq Santa Clara Storefront
MajorsMay 20, 2025
Tanishq Opens Seventh U.S. Store

Tanishq is expanding its presence in the United States with a new store in Santa Clara, California, which is its largest in the country.

New Cartier store at Los Angeles airport
FinancialsMay 19, 2025
Jewelry Sales a Standout for Richemont in 2024

Sales for Richemont’s four jewelry brands increased 8 percent, while watch sales picked up toward the end of the year.

Instappraise and NAJA logos
Events & AwardsMay 19, 2025
NAJA Opens Scholarship Applications for 2025

Two scholarships are available, one for new and non-members and another for NAJA certified members.

Day’s Jeweler’s Tuscan Village Location Painting
IndependentsMay 19, 2025
Day’s Jewelers to Open Ninth Location

The retailer’s new flagship is set to open in October at the Tuscan Village development in Salem, New Hampshire.

Gemfields emeralds, rubies, sapphires
SourcingMay 19, 2025
State of Colored Stones: The Big Three in the Modern World

Sapphires, emeralds, and rubies are finding their place in a U.S. market captivated by the gemstones once referred to as “semi-precious.”

Saks on Amazon flagship window
MajorsMay 16, 2025
Saks Fifth Avenue, Amazon Partner on Luxury Online Storefront

Plus, parent company Saks Global announces plans to cut ties with up to 600 vendors.

Graphic for My Next Question webinar with guest Peter Smith
Recorded WebinarsMay 16, 2025
Watch: Physical Retail Is Not Dead

Peter Smith joined Michelle Graff to chat about the state of brick-and-mortar stores and share a few book and podcast recommendations.

Tejen Candy Bowl Torque Necklace
CollectionsMay 16, 2025
Piece of the Week: Tejen’s ‘Candy Bowl’ Torque Necklace

The necklace features a candy-colored Australian white opal in 18-karat Fairmined gold, as the brand was named a Fairmined ambassador.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy