Survey Says: Competition is Jewelers’ Biggest Challenge

SurveysNov 16, 2016

Survey Says: Competition is Jewelers’ Biggest Challenge

Whether it’s coming from the internet, the big-box store down the street or other luxury categories, competition is jewelers’ biggest challenge right now.

Competition, creating marketing that drives foot traffic and finance--meaning maintaining profit margins and managing expenses such as health care--were the top three business challenges cited by jewelers in two separate surveys conducted this year.

New York--Jewelers who recently took part in an online poll said that the No. 1 challenge they face today is competition, particularly from online and big-box retailers.

National Jeweler/Jewelers of America fielded its latest Business Pulse survey between Oct. 24 and Nov. 2 and received 211 responses.

The survey consisted of one simple question: What is the biggest challenge facing your business today?

The No. 1 answer, cited by 27 percent of respondents, was competition, particularly from online players that don’t have to charge sales tax in every state.

This, brick-and-mortar jewelers have long argued, gives them an unfair advantage considering how much consumers can save by not paying sales tax on their engagement ring. And it’s an issue that still is the subject of legislation in Washington.

“Most people like to shop by phone, internet. (We are) losing that customer experience of sitting down with people and developing a relationship.”
Survey-takers also mentioned competition from big-box stores and other luxury categories, particularly travel.

There is “a lack of interest … in fine jewelry, a lot more traveling taking money from (the consumer’s) budget,” one respondent wrote.

The second biggest challenge cited by jewelers surveyed was marketing/driving foot traffic into their stores.

This is an obstacle that also is tied to the internet, as jewelers noted the need to find a way to get people away from their computer screens and into stores, and to figure out how to market to consumers, particularly younger consumers, in the digital age.

“Most people like to shop by phone, internet,” wrote one jeweler who cited “getting customers in the door” as his or her biggest challenge. “(We are) losing that customer experience of sitting down with people and developing a relationship.”

Meanwhile, another respondent acknowledged the importance of social media but expressed hesitance about using it.

“As a longtime jeweler, we are not big social media users, and I feel that is the only path for the future. And, no, I really don’t wish to be big in social media.”

The challenge cited by the third-largest percent of survey-takers (12 percent) was finance, managing expenses such as the added costs of operating online and health care--which one respondent called a “constant worry”--while grappling with narrowing margins.

Looking Back
JA asked the same question of jewelers--what is the biggest challenge currently facing your business?--back in February. The results did not differ vastly, with the top three concerns staying the same.

Twenty-five percent of jewelers
who took the survey then cited competition as their biggest challenge, followed by marketing/driving traffic (20 percent) and finance (11 percent).

Survey takers were less concerned with staffing this time around, with only 4 percent citing it as their biggest challenge, compared with 8 percent earlier this year.

The economy also was slightly less worrisome to jewelers in October (see chart at right), although a few did mention it along with the election, which was not yet concluded at the time the survey was conducted.

“The economy has still not gotten well enough for consumer confidence to grow, especially in this election cycle,” one respondent wrote.

Others mentioned low oil prices and terrorism fears as challenges, while one survey taker said it was the “unsettled issues this election has brought (to the surface) in this country.”

Merchandising, meanwhile, apparently became more challenging as the year wore on.

Nine percent of survey-takers cited it as their biggest challenge this time around, compared with only 6 percent earlier this year, perhaps due to the pressure jewelers feel to have the right merchandise in stock as the holidays approach.

Only a couple of survey takers said their business wasn’t facing any great challenges right now, while one said their biggest problem was a challenge any retailer would be happy to have--too much growth.

“Our town is undergoing massive growth,” the respondent wrote, “so we are as well.”
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

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