b'EDAHNS TAKEBY EDAHN GOLANC omparing the current list of $100 Mil- a continued decline. This will create considerablepandemic was the growing consumer reliance on lion Supersellers to last years rankingpressure on retailers, wholesalers and manufac- online buying. Those with an online strategy in yields several insights.turers for one big reason: volume sales.place were better prepared than those fully de-All telling, each pulls back a layer that hides anGrowth in sales of lower-cost items, even ifpendent on face-to-face sales. Today, it is obvious issue about jewelry retail, and every one of themmargins remain intact, requires vendors to sellthat developing an online presence is essential. is worth paying attention to.many more jewelry items just to maintain revenue.According to the clich, only the strong sur-First, let me point out that these figures areA volume game is always tricky. An analysis ofvive. But how can we define strong? for 2019 so they do not reflect the impact ofa typical S&P 1500 company shows that raisingRelying on volume sales without increasing COVID-19. Those total figures will be down sharp- the price by 1 percent at constant volumes gen- prices, sitting at declining traffic locations, not uti-ly, and there will be considerably fewer companieserates an 8 percent increase in operating profits.lizing an agile strategy that includes a war chest, on the $100 Million Supersellers list next year.This is three times greater than the impact of a 1and remaining offline is not part of being strong. With that note out of the way, lets look at thepercent increase in volume.Strong is not just the opposite of the above, 2019 figures.Here is why: Increasing volume sales requireshowever. It is also thinking outside the box. As the data in this report shows, it was not a veryan increase in variable costs. Every so often, fixedOne option is to rely on data analytics. (Full good year for jewelry sales in the United States.costs will rise too if, for example, a larger salesdisclosure: Analyzing data is what my research Collectively, the 38 companies on this yearsstaff is needed.company and I do.)list sold an estimated $26.56 billion worth ofIts a tough battle to win. Retailers seekingData analysis will inform a business owner if their jewelry and watches, a 3.4 percent year-over-yearmiddle- and lower-middle-class consumers oftencosts are reasonable or if they are paying more decline that is a warning sign.lose out, as the American retail landscape shows.than their competitors for the same product, The jewelry industry shrank in 2019, hurtingThe financial pains of Sears, JC Penney, Nordstrom,which items are generating better returns due to everyone in the pipeline: miners, manufacturers,Lord & Taylor and many more highlight this.faster turnover as well as timing of sales, when to and retailers.Along with the decline in sales, the number ofreduce prices or inventory, when to speculate and American consumers spent less on jewelry.specialty retailers on the Supersellers list declinedwhen to wait.Thus, once we are out of the grip of the pan- while the number of non-jewelers remained steady.With data analytics, companies make better demic, the industry will need to find out how toLooking at the macro trends, it is clear thatdecisions, faster. It encourages them to be more improve sales.the volume game is not easily sustainable. Moreinnovative in their approach and more daring in Underlining the decline in sales by the leadingimportantly, although it may feel like this is beingtheir decisions. They try more and achieve more, companies, the specialty jewelers on our list,forced upon jewelry stores, transitioning into ain a calculated and sound way. companies like Signet and Tiffany that specializevolume seller is not a sound process for growth.This is why a tough 2019 was not lost on the in fine jewelry, sold 10.3 percent less than in theindustry. previous year.Coping With COVID-19 Stakeholders that initiated swift action in Non-specialty retailers, companies like CostcoAll of this begs the question, how preparedresponse to the decline in demand were better and Walmart that sell a wide range of merchan- were jewelry retailers for the current financialprepared for COVID-19. It prompted some to buy dise, sold 5.5 percent more. fallout created by the pandemic? Was it possiblethe right goods, jettison slow-moving merchandise, Specialty jewelers lost market share to otherto prepare at all?focus their efforts in areas where they excel, and let retailers again. This is an ongoing issue. The simple answer is a cautious, yes.go of activities and habits that dont serve them. The shift from jewelers to general merchan- The decline in foot traffic to malls was exacer- Despite all the turmoil, jewelry continues to disers is due, among other factors, to a loss ofbated by the pandemic, yes, but it actually startedprovide joy to consumers everywhere. interest in pricey jewelry and a decline in spend- years ago. Any retailer relying on mall presenceThe $26 billion in sales by these 38 compa-ing per item.(Signet, anyone?) is facing a decline in traffic.nies proves there is a way to make a living in this The average price of a piece of jewelry sold atAnother form of preparedness is a war chest.business.Walmart and on Amazon was less than $100. TheIn the midstream, with its thin margins andThe trick is to be attentive to consumer tastes, same was true for JC Penney and Costco. Theseviolent fluctuations, a cash reserve is a given.and to support and develop this with high-quality retailers are four of the five biggest jewelry sellersBecause 2019 was such a difficult year, manymarketing and a continuing desire to learn how to among the general merchandisers.manufacturers reduced their dependency on bankoperate a more profitable business. The American consumer is interested mainlyfinancing to reduce costs and improve flexibility. in lower-cost jewelry, the kind that needs to lastWhen business shutdowns started, many reducedEdahn Golan is a Tel Aviv-based researcher and only a season.activities but were able to cover unavoidable costswriter specializing in the fine jewelry industry. He Not surprisingly, the first victim of this trend isbecause they had emergency savings.compiles the financial figures for National Jewelers the diamond industry. The long-term prospect isAnother ongoing retail shift accelerated by theannual $100 Million Supersellers list. NATIONAL JEWELER 15'