Scenes from JCK 2008

[John P]

[ Scenes from JCK 2005 ]
[ Scenes from JCK 2006 ]
[ Scenes from JCK 2007 ]

Here, again, is another look at one of the jewelry industry's largest events. Every year over 3000 manufacturers and designers from the jewelry industry come to the Sands Expo to exhibit and present for over 30,000 attendees from around the world.

We're proud to welcome a new face at JCK this year; our benevolent leader from Pricescope... Andrey

 

[Dee*Jay]

Date: 5/28/2008 4:38:26 PM
Author:John Pollard

We're proud to welcome a new face at JCK this year; our benevolent leader from Pricescope... Andrey

Look at that GQ shot!

 

[WinkHPD]

Here is quite a crew from this morning. Wink, Andrey, Paul in the back row with Marte Haske, John and Garry (whom we had to stand on his feet when he got here) from Down Under in the front row.

Great debates and wonderful conversations are the order of the day.

Wink

 

[diamondseeker2006]

How fun! Wish we were there, too!!!!!!

 

[Lorelei]

Have a wonderful time everyone!

 

[John P]

It has been a busy two days of meetings. Plenty of notes - I thought I would share these from one of yesterday's sessions:


Brad Huisken was entertaining and informative. He discussed challenges salespeople face in a shrinking market. There are 32,000 independent jewelry stores and almost as many chain stores. It’s predicted that within 10 years 35% of retailers will be out of business.

Currently Wal-Mart is the #1 seller.
Costco is the #1 seller of D/FL goods.

So what are “little guys” to do?

Mr. Huisken covered ways to increase traffic, close more sales with people that do come in and raise the price of the average sale. Most of his suggestions were practical things in a store owner or individual salesperson’s sphere of control: Networking, education/training and better listening skills in particular. It was a good session with a positive message about different markets and the importance of realizing not everyone is seeking the same thing, so the salesperson’s job is to understand the client – not the other way around (also the great Steven Covey principal of "seek first to understand, then be understood" if memory serves).

Mr. Huisken had a good sense of humor that was nice and dry – to the taste of some of us in the crowd. He opened by asking if anyone knew what his name means in Dutch. Our Belgian contingent knew, of course, but allowed him to tell the audience.

Any guesses?

 

[John P]

Mr Huisken also told a few funny anecdotes which are humorous even if they are urban-jeweler legend.

*

A lady walked into ABC jewelers, angry about a very expensive watch she purchased:

Lady: The date changes at noon every day.
Salesperson: We can fix that ma’am, we’ll just adjust midnight.
Lady: I’m not coming back at midnight!

*

A large lady came in saying her ring would no longer come off her finger, insisting that it had shrunk. She knew this was so because “I wash dishes in very hot water.” It was on so tightly the jeweler told her it would have to be cut off. She asked; “Can you do it while I wait?”

*

A guy was considering two diamonds.

Guy: Why is this one more expensive?
Salesman: It’s F in color.
Guy: Well what f’in color is it?

 

[Stephanie]

Date: 5/29/2008 6:44:22 PM
Author: John Pollard
A guy was considering two diamonds.

Guy: Why is this one more expensive?
Salesman: It’s F in color.
Guy: Well what f’in color is it?

Lol! That''s hilarious.

 

[Kaleigh]

Date: 5/29/2008 6:50:19 PM
Author: Stephanie

Date: 5/29/2008 6:44:22 PM
Author: John Pollard
A guy was considering two diamonds.

Guy: Why is this one more expensive?
Salesman: It’s F in color.
Guy: Well what f’in color is it?

Lol! That''s hilarious.

Too funny. Have a wonderful time at the show. Thanks for sharing the pics with us Sir John!!!

 

[LaurenThePartier]

Date: 5/29/2008 6:44:22 PM
Author: John Pollard


A guy was considering two diamonds.

Guy: Why is this one more expensive?
Salesman: It’s F in color.
Guy: Well what f’in color is it?

HI-larious!

 

[Ellen]

Date: 5/29/2008 6:50:19 PM
Author: Stephanie

Date: 5/29/2008 6:44:22 PM
Author: John Pollard
A guy was considering two diamonds.

Guy: Why is this one more expensive?
Salesman: It’s F in color.
Guy: Well what f’in color is it?

Lol! That''s hilarious.

x 10

 

[John P]

It''s nice to be able to interact in-person. Here Garry shares new features of DiamCalc with Rob Van Beurden and Wink.

 

[John P]

Laptops and Pepsi.

 

[John P]

Ben Janowski spoke about the top 10 concerns relative to our industry. This was one of the more well-thought sessions we saw. Here is a synopsis, and my reactions (my peers may or may not share my perceptions).


10. Distribution: A declining number of stores means there are fewer opportunities for real innovations and intensified competition for case space. The deepest selections are online, not in stores, meaning that retailers will become more reliant on the web to source stones.

Thoughts: Vertical integration can definitely come at diversity’s expense, though I think the current survivors are working smarter in addition to harder. One concern with this is the further commoditization/proliferation of “sure bet” shapes – round & princess – which already have the lion’s share of the market.

9. Volatility: More large mining houses may be moving to tenders; the rationale being that in a world of tenders do they need sights? No more buffering stocks means companies will look to move goods out.

Thoughts: In a world of tenders and auctions the big dogs might try to price others out of the game. On the other side of the coin, the largest players also carry the largest debt so this may not be practical.

8. Man-Made Diamonds (MMDs): Current productions currently sell out – will demand increase? There are no issues of geo-political conflict, clarities VS1+ are less meaningful in a non-natural stone so price points are more uniform. What if DeBeers becomes aggressive in this srea? Will the public ever accept them as an option?

Thoughts: It would take a campaign even more creative than “A Diamond Is Forever” to replace natural diamonds. MMD companies are selling but I see this as a niche market, no different than people who seek an unorthodox shape or people using something other than a diamond for their nuptials. Engagement rings are about romance. Synthetics, sims and lab-grown (MMDs) are cool with some people but a disconnect for the at-large market seeking the eternal romantic symbol, long-associated with nature.

7. Supply: New exploration is down. Demand is up and exceeding current supply. Price and cash preference with the weak dollar means goods are staying overseas. Will this be incentive for the development of MMDs?

Thoughts: With Canada steadily rising and, by 2016, producing enough to equal more than a third of current global supply I don’t see a true shortage as imminent. I think the crazy escalation of prices by upstream controlling entities (while they are still in control) is a more urgent matter, as it is rapidly pricing middle America out of collection categories in larger and now common sizes.

6. Channel Conflict: With expanding internet use price pressure intensifies. Affluent customers want to know they are getting a deal. Additional margin for service is possible but in the 5% range, certainly not 15%. Internet and low-margin models are far more efficient. In-store sales will continue but with more educated consumers. Retailers fight disintermediation at their peril.

Thoughts: Same as #10.

5. Margins: Large stones are hot and the weak dollar hurts here. Mid and lower markets will have a tough year. Suppliers are driven to deal directly with the public.

Thoughts: Same as #5.

4: Competition: Other luxury products are competing. In the past diamonds have held the high ground; identified with royalty, luxury, wealth and power. New symbols of luxury with better margins, sales and promotion are out there.

Thoughts: True, which means we as diamond producers need to “brand” the romance - as well as the cut, color & clarity of what we have to offer. If we market our product as numbers-and-letters-only we lose the eternal, natural symbolism which is the intrinsic value of diamond.

3. Banking: Credit levels are too high as a result of supply-driven financing. Some companies not be renewed and cut adrift in favor of other models. Banks love the internet model with low inventories, high turnover on short margins and national or global reach.

Thoughts: The practice of memo is a huge problem. Debt is rife in this industry and memo/credit instead of cash has brought the industry to its knees in some ways.

2. Education: Too many know too little; salespeople on low salaries with long hours and poor benefits are unmotivated to learn. This undermines public confidence and embeds a distrust of jewelers. The media stays after this with seasonal stories of misrepresentation.

Thoughts: Absolutely agree on all counts. I think this should be number one.

1. Mystique: Can diamonds maintain their mystique if prices put them out of reach for more people? Perceived value is taking hits. Are we entering a post-luxury age of luxury burn-out, faux branding and sated consumers?

Thoughts: Ties into almost all the above.

 

[John P]

A further thought about memo: Many see memo as the great industry killer. How is it possible that - in a world where cash and carry has always defined the most successful - our luxury trade has been allowed to back itself into this corner?




Our archivists have been working day and night to trace the roots of memo.

Where did this all start, and how? Well, according to a joint report filed by Dr. Brillianteering and Professor RB Hoverworthington (leaders in studies of DSS and PSA), we may have an answer…

According to ancient text scrawled on briefke recovered from a Flemish shipwreck - the Memo epidemic can be traced to the jungles of Brazil some decades ago: A poor native jeweler allowed an American Marine from Idaho to tote a number of 25-cent-per-carat amethysts to show his buddies in hopes of selling them. That American was not required to pay, only to borrow the gems with the promise of cash or return (!) In the native Tupi language this practice was referred to as Winkborrow *. South American gem traders shortened it to “orrow” and upon reaching Tel Aviv Israeli traders called the practice “memo.”

This affliction spread quickly, to Antwerp, Mumbai New York and finally to the rest of the world.

No one knew, those decades ago, that the largesse of one native trader in the Brazilian rain forest would bring the industry to its knees today. Our researchers are now trying to trace the identity of the Marine from Idaho – what happened to him? Has he survived and, somehow, does he carry a gene that could lead to an immunization for our trade?

Grave issues indeed.

* A side note: Some anthropologists speculate “Wheelbarrow” gets its roots in “Winkborrow,” attributable to the vast amounts of amethyst that the mysterious American jeweler traded in his Brazilian days.

 

[gwendolyn]

REALLY interesting stuff, John, thank you for posting it! I especially love the post where you share your personal thoughts in addition to what was presented. Good stuff.

One question, though:

Date: 5/30/2008 12:53:43 PM
Author: John Pollard
5. Margins: Large stones are hot and the weak dollar hurts here. Mid and lower markets will have a tough year. Suppliers are driven to deal directly with the public.


Thoughts: Same as #5.

That is number 5, so which thoughts did you mean to put there?

 

[John P]

Date: 5/30/2008 1:09:18 PM
Author: gwendolyn

REALLY interesting stuff, John, thank you for posting it! I especially love the post where you share your personal thoughts in addition to what was presented. Good stuff.

One question, though:

Date: 5/30/2008 12:53:43 PM
Author: John Pollard
5. Margins: Large stones are hot and the weak dollar hurts here. Mid and lower markets will have a tough year. Suppliers are driven to deal directly with the public.


Thoughts: Same as #5.

That is number 5, so which thoughts did you mean to put there?

Thanks a lot Gwendolyn. Sorry about the tick (dummer-reference to the tick system that was used in Drum Corps long ago).

I meant to say "Same as #7." In short; the worry about margins to me with consumers is that middle America is quickly finding collection colors and clarities, even in common sizes, shooting out of the practical budget range. A further worry for the trade is that every stage in the pipeline is reacting, so cutting and trading houses are sucking margins out upstream even as suppliers and retailers are feeling the squeeze.

 

[Lorelei]

Good stuff Sir John, I always enjoy your Vegas bulletins!

 

[gwendolyn]

Date: 5/30/2008 1:45:45 PM
Author: John Pollard
Thanks a lot Gwendolyn. Sorry about the tick (dummer-reference to the tick system that was used in Drum Corps long ago).

Oh, did you do corps?! I was in the Cadets for 6 months and then realized I couldn't afford it.

I meant to say 'Same as #7.' In short; the worry about margins to me with consumers is that middle America is quickly finding collection colors and clarities, even in common sizes, shooting out of the practical budget range. A further worry for the trade is that every stage in the pipeline is reacting, so cutting and trading houses are sucking margins out upstream even as suppliers and retailers are feeling the squeeze.

*nods* Seems a bit like a vicious circle to me.

 

[zoebartlett]

Date: 5/29/2008 6:50:19 PM
Author: Stephanie

Date: 5/29/2008 6:44:22 PM
Author: John Pollard
A guy was considering two diamonds.

Guy: Why is this one more expensive?
Salesman: It’s F in color.
Guy: Well what f’in color is it?

Lol! That''s hilarious.

I laughed so hard I snorted!

 

[strmrdr]

I love this slide can he come to my town and hammer it into some heads?
Please!!!! Not just at Jewelery stores either!
I know a sewing shop, a tailer, a men's clothes shop and several dozen others that could use it!

 

[Skippy123]

Awesome Pics!! Thanks for sharing!

 

[Regular Guy]

Date: 5/30/2008 1:50:45 PM
Author: Lorelei
Good stuff Sir John, I always enjoy your Vegas bulletins!

Is there any question about the cause for the timing of John's uncloaking?

Thanks, John...nice work as always!

 

[John P]

Date: 5/30/2008 1:58:56 PM
Author: gwendolyn

Date: 5/30/2008 1:45:45 PM
Author: John Pollard
Thanks a lot Gwendolyn. Sorry about the tick (dummer-reference to the tick system that was used in Drum Corps long ago).

Oh, did you do corps?! I was in the Cadets for 6 months and then realized I couldn''t afford it.

Too cool Gwendolyn. I was coordinator of the Yamaha Sounds of Summer program in the 90s and instructed with a number of the other guys - Aungst and Larrivee among them. I continue to compose/instruct as time permits. Three members of the Blue Devils'' staff are standing with me at my wedding...some of my best bbq buddies are staff at BD, SCV and the Cavaliers.

BTW, when I was in high school those Cadets shows of the mid-80s were one of the things that caused me to walk a percussive path.

 

[John P]

Date: 5/29/2008 6:53:15 PM
Author: Kaleigh

Date: 5/29/2008 6:50:19 PM
Author: Stephanie

Lol! That''s hilarious.

Too funny. Have a wonderful time at the show. Thanks for sharing the pics with us Sir John!!!

Yeah that session was great - and inspired a number of stories at bar-time. Cheers to all of you and you''re welcome of course.

 

[John P]

Ok - reporting on another session:

The Platinum Guild International discussed Independent case studies from the internet and how to grow eBusiness.

Interesting points:

71% of adults use the internet, including 91% of those making $75K+ per year.

66% of internet users have purchased a product over the internet.

90% of internet users do some jewelry research online.

26% of grooms say the internet had the most influence in choosing which retailer to go to for their engagement ring purchase.

Online jewelry sales are now 7.4% of total industry sales: This is an increase of 20% compared to overall industry sales growth of 4.3% (!)

By 2010 online jewelry sales are predicted to represent 10.2% of the industry.

One of the case studies PGI reported on was Pearlman’s. The presenters discussed how the store and website features 40 designers, well-positioned for browsing and contacting the store via email. A relationship is developed online, followed by a phone call. Pearlman’s credits creative marketing, large product selection and dedication to customer service as playing a big role in their success.

Another case study, and compulsory in such a presentation, was Blue Nile. They estimate 90% of their sales are diamonds and diamond jewelry, versus a typical independent jeweler with 50% sales mix of diamonds. Their average ticket is $1450, which is nearly five times the industry average. 72% of sales are e-rings, which is more than double the typical independent. The average ticket for a diamond ring is $6200 (up from $5700) versus the industry average of $3210 for independents. They also estimate 50% of first time male shoppers become repeat customers.





One note about the four sessions related to the web at this JCK show: This case study was informative. In my opinion the others were marginally useful and in some cases gave strange information (such as internet sales being on the decline) and arguable advice (such as emphasis on imagery over education and functionality).

 

[John P]

Although we''re nerds most of the day we''re much cooler in the afternoon. Or at least, we are nerds having more fun.

Here are a couple of Belgians enjoying Vegas. Kristoff works for the company that manages Infinity''s website. Rob is the owner of Diamond House, a dealer in Antwerp.

 

[John P]

Here is Brian Gavin of Whiteflash, Andrey of PS, yours truly and Felicia, a friendly server.

 

[John P]

After a couple of rounds Garry had to ask Felicia to stop stalking Andrey (he''s such a charmer).

 

[John P]

Two cutters and a nutter!