44 RETAILER HALL OF FAME 2017 P rior to the publication of this issue, National Jeweler asked retailers: What are the three biggest problems confronting jewelers today? We got a lot of great answers, but the three that were men- tioned most often were shrinking margins, finding good employees and creating an experience that makes people want to come into the store. Then, we asked three past Hall of Fame inductees—Jim Rosen- heim (Class of 2011), Lauren Kulchinsky Levison (Class of 2002) and Michael Pollak (Class of 2008)—to tell us how they are confronting these issues. Here’s what these Hall of Fame-worthy retailers had to say. 1. THE PROBLEM: SHRINKING MARGINS THE SOLUTION: PRIVATE-LABEL MERCHANDISE Michael Pollak of Hyde Park Jewelers says the flattening of margins in the jewelry and watch business caused by the internet is likely to contin- ue without abatement. His solution? Stocking private-label merchandise in favor of big brands. “Jewelers, more and more, have to get into the private-label business and not get so fixated on promoting as many brands, as many of us have in the past,” he says. “One of the few places where margin can be made up is in either sourcing, manufac- turing or contracting for their own goods, rather than to focus too heavily on branded collections.” Pollak says he is not advocating for the eradication of brands en- tirely, but says that for most jewelers today, probably 50 to 75 percent of their brands are underperforming. Jewelers need to know how all their lines are performing and divert the money being spent on underperforming brands elsewhere. “That can be recapitalized into merchandise that they can obtain better margins in,” he says. 2. THE PROBLEM: FINDING GOOD EMPLOYEES THE SOLUTION: HIRE STORYTELLERS, NOT SALESPEOPLE Staff members “should be excited and passionate about the work and the environ- ment; jewelry and fashion should be their passion,” says Lauren Kulchinsky Levison of Mayfair Jewelers inWoodbury, N.Y. “They should be storytellers, not salespeople.” She suggests creative writing classes and styling workshops to teach sales team members how to talk about jewelry using the same vocabulary clients hear when they’re shopping for other daily ward- robe items. It takes the “scariness” out of buying jewelry, Levison says, and makes it more obtainable. “Of course there are times when it needs to be presented as un- obtainable as well, and that is why you need passionate people,” she says. “If they are just looking to write a ticket up for a sale, they can go work someplace else—your business is too important.” 3. THE PROBLEM: CREATING A COMPELLING IN-STORE EXPERIENCE THE SOLUTION: PUT CLIENTS FIRST “To build a good experience, I believe, you must start with setting the client’s needs first and foremost,” says Jim Rosen- heim of Tiny Jewel Box in Washington, D.C. “This, to me, is incompatible with an employee compensation package that is based on commission sales. Commission sales promote greater earnings over the needs of the client. “These sales promote the seller setting the buyer’s needs aside to increase his or her compensation.” Rosenheim says they’ve never used a commission model of compensation. Instead, Tiny Jewel Box pays its salespeople a salary and gives bonuses and raises based on a com- plex formula that includes sales but also encompasses many other areas, including teamwork and non-sales efforts. “I believe that most of us have experienced those ‘retail sharks’ who set their sights on you, the customer, and try to sell you what suits their needs as opposed to what you seek,” Rosenheim says. “I strongly believe that this type of experi- ence is precisely why so many consumers turn to the internet. They don’t have to deal with un- knowledgeable, pushy and inconsiderate sales personnel that are so prevalent at many luxury retail shops.” —Compiled by Michelle Graff PROBLEMS & SOLUTIONS wrap-up “I BELIEVE THAT MOST OF US HAVE EXPERIENCED THOSE ‘RETAIL SHARKS’ WHO SET THEIR SIGHTS ON YOU, THE CUSTOMER, AND TRY TO SELL YOU WHAT SUITS THEIR NEEDS AS OPPOSED TO WHAT YOU SEEK.” Michael Pollak Jim Rosenheim Lauren Kulchinsky Levison