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Jeweller - December Issue 2017

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VOICE OF THE AUSTRALIAN JEWELLERY INDUSTRY<br />

DECEMBER <strong>2017</strong><br />

Wild ride<br />

RETAIL HAS CHANGED FOREVER,<br />

ADAPT NOW TO SURVIVE<br />

Maverick<br />

+ +<br />

EXCLUSIVE ONE-TO-ONE WITH<br />

DIAMOND ‘REBEL’ MARTIN RAPAPORT<br />

X factor<br />

SCOURING THE GLOBE FOR STORE<br />

DESIGNS WITH X FACTOR


WE’RE IN THE<br />

BUSINESS OF<br />

GROWING YOUR<br />

BUSINESS.<br />

What you receive<br />

• Easily accessed advice and professional services<br />

• World class training systems + free ARA membership<br />

• Marketing and digital resource guidance<br />

• Fully customisable apps, websites, catalogues<br />

• Access to exclusive Showcase brands<br />

• Member owned jewellery focused business<br />

• Maximum supplier discounts to you the retailer<br />

• No ongoing monthly management fees<br />

What it delivers<br />

• Increased productivity<br />

• Exclusive incentives back to members<br />

• The ability to build your brand<br />

• Your identity presented professionally<br />

• Increased margins<br />

• Profits back to members<br />

• Maximised buying power<br />

• Better bottom-line results<br />

What our members have to say<br />

“Head Office provides me with everything from catalogues to marketing, technology<br />

support and so much more. They’re invaluable to my business.”<br />

Rosie Ficarra Kennedy’s Showcase <strong>Jeweller</strong>s, Swan Hill<br />

“I’ve previously been with another buying group, so I appreciate what I now receive as real, tangible<br />

benefits to my business for its future and success.”<br />

Neil Watson Watsons’ <strong>Jeweller</strong>s, Launceston<br />

“The simplicity and professionalism of being able to utilise all of Showcase’s digital and training tools perfectly<br />

suits our business and drives the results we need as a self branded multi-store operation.”<br />

Ben Duff Duffs <strong>Jeweller</strong>s, Geelong<br />

Interested? Contact us today<br />

We’re ready when you are. So if you think it’s time to get serious about where you’re going, email us today.<br />

Our team will be happy to show you how we can grow your business together.<br />

Email: enquiries@showcasejewellers.com.au<br />

www.showcasejewellers.com.au


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RETAIL HAS CHANGED FOREVER,<br />

ADAPT NOW TO SURVIVE<br />

VOICE OF THE AUSTRALIAN JEWELLERY INDUSTRY<br />

EXCLUSIVE ONE-TO-ONE WITH<br />

DIAMOND ‘REBEL’ MARTIN RAPAPORT<br />

DECEMBER <strong>2017</strong><br />

SCOURING THE GLOBE FOR STORE<br />

DESIGNS WITH X FACTOR<br />

CONTENTS<br />

DECEMBER <strong>2017</strong><br />

13/<br />

21/<br />

26/<br />

FEATURES REGULARS BUSINESS<br />

13/ DIAMOND REBEL<br />

Up close and personal with<br />

nonconformist Martin Rapaport.<br />

17/ FEELING GOOD<br />

Pandora’s David Allen shares insight<br />

on the great customer experience.<br />

7/ Editorial<br />

8/ Upfront<br />

9/ News<br />

10/ Top Products<br />

45/ Gems<br />

Colour investigation: zircon<br />

39/ Business feature<br />

David Brown discusses the merits<br />

of the morning staff meeting.<br />

41/ Selling<br />

Doug Fleener says showing outof-stock<br />

product is good practice<br />

… if done correctly.<br />

21/ NEW NORMAL<br />

In-depth analysis on the changing<br />

retail landscape and ways to adapt.<br />

26/ X FACTOR<br />

Be inspired by international store<br />

designs that ‘wow’.<br />

46/ 10 Years Ago<br />

47/ Calendar<br />

48/ My Bench<br />

50/ Soapbox<br />

Suppliers need to adjust margins,<br />

Hayley Birtles-Eades says.<br />

42/ Management<br />

Generic business advice rarely<br />

works, David Sharpe warns.<br />

43/ Marketing<br />

Dale Furtwengler proposes a peace<br />

treaty for sales and marketing.<br />

44/ Logged On<br />

Embrace staff collaboration tools<br />

this Christmas, Lilian Sue reports.<br />

Wild ride<br />

Maverick<br />

+ +<br />

X factor<br />

Front cover description:<br />

Lesedi La Rona rough diamond.<br />

Image courtesy: Graff Diamonds<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 5


EDITORIAL<br />

UNDERSTANDING THIS ROLLERCOASTER RIDE<br />

As <strong>2017</strong> draws to an end, it’s hard to recall a<br />

more eventful year for the Australian jewellery<br />

industry. It has undergone massive change<br />

and it’s difficult to know in which direction<br />

it’s headed. In fact, many would argue that<br />

the local market has experienced the greatest<br />

change on record.<br />

I am sure most readers are just waiting for this<br />

year to be over and are looking forward to the<br />

New Year period.<br />

The term ‘New Normal’ is increasingly being<br />

used as a way to define the current trading<br />

climate. It became popular following the<br />

2007-2008 global financial crisis and the<br />

aftermath of the 2008–2012 global recession,<br />

which Australia largely avoided.<br />

A huge convergence in retail has been<br />

happening for some time as businesses<br />

shift to test different models in the new<br />

digital world – online retailers are opening<br />

bricks-and-mortar stores; traditional retailers<br />

are attempting to compete with their<br />

own – albeit small – online models; and<br />

large retailers are converting physical store<br />

locations into semi-distribution hubs.<br />

The truth is the retail industry has never<br />

stopped changing; however, it’s just that<br />

right now we are perhaps in the middle of<br />

the greatest change ever experienced, in part<br />

because of the speed at which it’s occurring.<br />

What retailers need to be aware of today is<br />

that the customer ‘journey’ – the manner in<br />

which they decide to buy and then make<br />

a final purchase – has altered given there<br />

are more touch points along the route, with<br />

customers treating different channels as short<br />

stops on their way to making a final purchase.<br />

It’s complex to say the least.<br />

With this in mind, the <strong>Jeweller</strong> team decided<br />

that our <strong>December</strong> issue should take a slightly<br />

different approach by featuring a number of<br />

in-depth articles offering insight on the state<br />

of the market and how retailers can better<br />

understand the changes.<br />

David Allen, the former president of Pandora<br />

Australia and New Zealand who now heads<br />

up Pandora’s Europe, Middle East and Africa<br />

regions, has long been an advocate for<br />

defining what a great customer experience<br />

actually means. He asks, “If being obsessed<br />

with their customers is the key to success, why<br />

aren’t more retailers outrageously successful?”<br />

It’s a good question and surely the answer<br />

is simple, right? Well, no, because customer<br />

obsession is subjective, and worse, part of<br />

the problem for our industry is the average<br />

age of storeowners. Running a business 10<br />

to 20 years ago with the aim of customer<br />

satisfaction (the old term) was relatively easy<br />

because the environment was far simpler;<br />

however, with so many retail choices and<br />

channels now available, understanding<br />

customer satisfaction (experience) is hard<br />

enough – let alone trying to achieve it!<br />

Nationwide <strong>Jeweller</strong>s managing director<br />

Colin Pocklington has been tracking Australian<br />

THE RETAIL<br />

INDUSTRY HAS<br />

NEVER STOPPED<br />

CHANGING;<br />

HOWEVER, IT’S<br />

JUST THAT RIGHT<br />

NOW WE ARE<br />

PERHAPS IN<br />

THE MIDDLE OF<br />

THE GREATEST<br />

CHANGE EVER<br />

EXPERIENCED<br />

jewellery and watch sales since 1982 as a way<br />

to keep his buying group members informed.<br />

He acknowledges the ‘New Normal’ and lists<br />

five megatrends that are driving disruption<br />

not only throughout the jewellery industry<br />

but also the wider community.<br />

Pocklington believes that with less foot<br />

traffic, jewellers have to find a way to increase<br />

their hit rate for the customers that do walk<br />

through the door.<br />

Diamonds have traditionally been a large<br />

driver of jewellery store sales so this month<br />

we offer insight into the current state of<br />

the market, and who better to look inside<br />

the international diamond landscape than<br />

Martin Rapaport?<br />

I caught up with the self-described ‘maverick’<br />

for a one-on-one interview a few months ago,<br />

knowing full well that he is not backwards in<br />

coming forwards with his views, no matter<br />

how controversial they may be!<br />

For example, when discussing the topic of<br />

synthetic diamonds, Rapaport says despite<br />

their powerful marketing campaigns,<br />

synthetics are not identical to natural<br />

diamonds and consumers are being misled<br />

because there is no natural scarcity.<br />

He has a lot more to say, as you will discover,<br />

so sit back, strap yourself in and hold on tight.<br />

The rollercoaster ride has begun.<br />

Coleby Nicholson<br />

Managing Editor<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 7


UPFRONT<br />

“I first worked<br />

in my family’s<br />

jewellery business<br />

as a ‘glassy/waiter’<br />

at Christmas<br />

functions and<br />

later in the school<br />

holidays running<br />

errands and<br />

polishing.”<br />

How were you introduced to the industry?<br />

JUSTIN MCCABE,<br />

GERARD MCCABE<br />

JEWELLERS<br />

“I started my<br />

diamond business<br />

20 years ago. I<br />

was supposed to<br />

be an accountant<br />

but couldn’t turn<br />

my back on this<br />

opportunity –<br />

business was in<br />

my blood!”<br />

SHWETA KHAN,<br />

STARFIRE DIAMOND<br />

JEWELLERY<br />

“I was introduced<br />

to the industry<br />

while exploring<br />

ways to build an<br />

engagement ring<br />

for my now wife.<br />

I discovered a love<br />

for creating pieces<br />

and have never<br />

looked back.”<br />

SIMON GOODBURN,<br />

RIBS & DUST<br />

VOICE OF THE AUSTRALIAN<br />

JEWELLERY INDUSTRY<br />

jewellermagazine.com<br />

Managing Editor<br />

Coleby Nicholson<br />

Editor<br />

Emily Mobbs<br />

emily.mobbs@jewellermagazine.com<br />

Journalist<br />

Talia Paz<br />

talia.paz@gunnamattamedia.com<br />

Advertising Manager<br />

Gary Collins<br />

gary.collins@jewellermagazine.com<br />

Digital Manager<br />

Angela Han<br />

angela.han@gunnamattamedia.com<br />

BULLETIN BOARD<br />

n CHRISTMAS CHEER<br />

Consider this: teamwork makes the<br />

dream work. A successful store is only<br />

as strong as its staff and ensuring they<br />

are managed correctly during the<br />

festive season is crucial. Scheduling<br />

regular meetings that clearly state the<br />

demands of each employee should not<br />

be underestimated. A little Christmas<br />

pudding also wouldn’t go astray.<br />

n FUTURE NUPTIALS<br />

The ‘world’s first’ wedding department<br />

store has opened in London. Think of<br />

The Wedding Gallery as a one-stop<br />

venue for wedding planning, housing<br />

everything from bridal gowns, florists,<br />

beauty studios and of course jewellery.<br />

The space also reportedly offers an<br />

exclusive members-only club for the<br />

industry with meeting rooms, event<br />

spaces and networking activities.<br />

n THIRST FOR JEWELS<br />

Research suggests that people are<br />

drawn to jewellery because of water.<br />

A study published in the Journal of<br />

Consumer Psychology theorises that the<br />

preference for glossy objects – metals<br />

and diamonds – stems from “an innate<br />

preference for fresh water as a resource”.<br />

DIGITAL<br />

BRAINWAVE<br />

SHOW OF HANDS<br />

Businesses looking for more ways to engage with<br />

customers in the lead up to Christmas are in luck.<br />

Instagram has launched Polls, an interactive poll<br />

– in the form of a sticker superimposed over a<br />

photo – that allows users to ask questions and view<br />

the results. After taking a photo or video, add the poll sticker and upload to Instagram<br />

Stories; followers can immediately start voting and retailers will see real-time results.<br />

There are plenty of insights jewellers can glean from this nifty feature … rose, yellow<br />

or white gold this Christmas? Are statement earrings or a stack of bangles the trend<br />

of choice? The opportunities are endless so get polling!<br />

TOP PRODUCT<br />

Cluse’s 18-carat rose gold-plated<br />

Essentielle black crystals chain bracelet<br />

is from the brand’s new jewellery range.<br />

Distributed by Heart & Grace, the piece<br />

was the most popular product last month<br />

ranked by views at jewellermagazine.com.<br />

Production Manager<br />

& Graphic Design<br />

Jo De Bono<br />

art@gunnamattamedia.com<br />

Accounts<br />

accounts@gunnamattamedia.com<br />

Subscriptions<br />

info@jewellermagazine.com<br />

<strong>Jeweller</strong> is published by:<br />

Gunnamatta Media Pty Ltd<br />

Locked Bag 26, South Melbourne,<br />

VIC 3205 AUSTRALIA<br />

ABN 64 930 790 434<br />

Phone: +61 3 9696 7200<br />

Fax: +61 3 9696 8313<br />

info@gunnamattamedia.com<br />

Copyright: All material appearing<br />

in <strong>Jeweller</strong> is subject to copyright.<br />

Reproduction in whole or in part is<br />

strictly forbidden without prior written<br />

consent of the publisher.<br />

Gunnamatta Media Pty Ltd strives to<br />

report accurately and fairly and it is<br />

our policy to correct significant errors<br />

of fact and misleading statements in<br />

the next available issue. All statements<br />

made, although based on information<br />

believed to be reliable and accurate at<br />

the time, cannot be guaranteed and<br />

no fault or liability can be accepted<br />

for error or omission. Any comment<br />

relating to subjective opinions should<br />

be addressed to the editor.<br />

Advertising: The publisher reserves<br />

the right to omit or alter any<br />

advertisement to comply with<br />

Australian law and the advertiser<br />

agrees to indemnify the publisher for<br />

all damages or liabilities arising from<br />

the published material.<br />

8 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


NEWS<br />

NEWS<br />

Gearing up for Christmas challenges<br />

Despite tough trading, buying group heads<br />

agreed that jewellers who remained positive<br />

and implemented certain strategies during<br />

the Christmas period would place themselves<br />

in good stead for a positive outcome.<br />

Nationwide <strong>Jeweller</strong>s managing director<br />

Colin Pocklington said staff training,<br />

consumer financing and window displays<br />

that included some ‘loss leader’ pieces<br />

and visible price tickets on all items were<br />

important areas to address.<br />

“Use this time to clear as much old stock<br />

as possible, which will take the pressure off<br />

cashflow in 2018, and make room for better<br />

performing ranges,” Pocklington added.<br />

Showcase <strong>Jeweller</strong>s general manager Carson<br />

Webb said retailers needed to be aware that<br />

Christmas sales were becoming ‘flatlined’.<br />

“For most, the percentage is no longer the<br />

big 25 per cent of sales in <strong>December</strong>,” he<br />

explained. Webb said rather than discussing<br />

market challenges, the industry required a<br />

proactive approach: “We can’t change the<br />

situation; however, we can change how our<br />

stores are presented and what’s on offer to<br />

our customers and, importantly, the way in<br />

which staff engage with them.”<br />

The comments followed ABS statistics that<br />

showed a below average 1.44 per cent yearon-year<br />

retail sales increase for September.<br />

<strong>Jeweller</strong> shines in VET awards<br />

Adelaide-based jeweller Laura Pivovaroff<br />

was recently crowned Apprentice of the Year<br />

at the <strong>2017</strong> South Australian Training Awards.<br />

Pivovaroff – who works at Wishart <strong>Jeweller</strong>s<br />

and completed a jewellery manufacturing<br />

apprenticeship last year – was one of four<br />

finalists narrowed down from 22 category<br />

entrants working across the various<br />

industries that fell under the state’s vocational<br />

education and training (VET) sector.<br />

“Winning this award means that my passion<br />

and dedication was recognised within the<br />

jewellery industry as well as in the world<br />

outside of jewellery,” Pivovaroff said.<br />

The jeweller would act as an ‘ambassador’<br />

to promote the benefits of undertaking<br />

an apprenticeship in South Australia. She<br />

was also expected to represent the state in<br />

the Apprentice of the Year category at the<br />

Australian Training Awards in Canberra in<br />

late November. It had not taken place at<br />

the time of publication.<br />

Thomas <strong>Jeweller</strong>s closing all stores<br />

Thomas <strong>Jeweller</strong>s, which was established by<br />

James Thomas in 1896, has confirmed the<br />

closure of its eight stores.<br />

According to a statement by The Thomas<br />

Group in October, the chain of Thomas<br />

<strong>Jeweller</strong>s stores would cease trading in the<br />

upcoming months.<br />

The decision was said to allow the group to<br />

“refocus their attention to areas of strength<br />

and growth within their business”.<br />

The statement added that the regional store<br />

properties would be sold, while the Thomas<br />

family would retain the store in Melbourne’s<br />

Bourke Street Mall, with a new tenant to be<br />

unveiled in 2018.<br />

As previously reported by <strong>Jeweller</strong>, Thomas<br />

<strong>Jeweller</strong>s announced the closure of its<br />

Melbourne store in September <strong>2017</strong>. A<br />

company statement at the time noted that<br />

the move was part of a business rebrand that<br />

would involve a focus on regional stores.<br />

+ MORE BREAKING NEWS<br />

JEWELLERMAGAZINE.COM<br />

IN BRIEF<br />

*<br />

BEVILLES SHAKE-UP<br />

Indian company Tara Jewels will acquire<br />

a 49 per cent stake in Bevilles. The chain’s<br />

CEO, Michelle Stanton, said the Bevilles<br />

family would retain a 51 per cent stake<br />

and that the deal was expected to be<br />

finalised in the next 12 months. She added<br />

that the “strategic alliance” made between<br />

both companies in 2013 was always<br />

going to be converted into an “equity<br />

partnership” when the timing was right.<br />

*<br />

JAA FALSE STATEMENTS<br />

In October, the JAA released its Financial<br />

Statements for the year ended June 30,<br />

<strong>2017</strong>. The report, prepared for the AGM<br />

on November 15, was error-ridden despite<br />

being approved by the board and signed<br />

off by directors. At the time of publication,<br />

the JAA had removed the Financial<br />

Statements from its website, stating:<br />

“Please note the 2016-<strong>2017</strong> Financial<br />

Statements will be made available shortly.”<br />

*<br />

SUPPLIER HERALDS CHANGES<br />

Wedding ring supplier TWM Co has<br />

introduced a same-day order and<br />

return service for its ‘plain’ wedding<br />

ring range. According to TWM Co chief<br />

operating officer Roberto Ulas, the new<br />

offering was in response to the “next<br />

generation” of consumers demanding<br />

faster turnaround times.<br />

*<br />

APPRENTICE WINS TOP AWARD<br />

Georgia Piggott, a third year jewellery<br />

apprentice who works at Wallace Bishop’s<br />

head office in Brisbane, was recently<br />

awarded Southbank TAFE’s <strong>Jeweller</strong>y<br />

Apprentice of the Year award and the<br />

Queensland state medal for the regional<br />

WorldSkills Australia competition.<br />

*<br />

YELLOW DIAMOND REVIVAL<br />

POZ Minerals has secured an agreement<br />

to commence operations at its diamond<br />

mine located adjacent to the former<br />

Ellendale mine, which closed in 2015.<br />

Bulk sampling and trial mining operations<br />

at the Blina Diamond Project are expected<br />

to begin next year.<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 9


TOP PRODUCTS<br />

TOP PRODUCTS FOR <strong>2017</strong><br />

A BEVY OF NEW JEWELLERY, WATCHES, DIAMONDS AND GEMSTONES HAS PASSED JEWELLER’S DESK THIS YEAR.<br />

THE FOLLOWING IS A COMPILATION OF THE MOST POPULAR RANKED BY VIEWS AT JEWELLERMAGAZINE.COM.<br />

Thomas Sabo’s 18-carat gold-plated sterling<br />

silver earrings are from the spring/summer<br />

<strong>2017</strong> collection. Distributed by Duraflex Group<br />

Australia, the earrings were the most popular<br />

product for the month of March.<br />

Sams Group Australia’s 0.27-carat, oval cut<br />

vivid pink diamond was sourced from the Argyle<br />

diamond mine in the East Kimberley region of<br />

Western Australia. The stone was the most popular<br />

product for the month of April.<br />

Daniel Wellington’s<br />

36 mm Classic Black<br />

Cornwall timepiece<br />

comprises a black dial with<br />

rose gold-toned detailing<br />

and interchangeable NATO<br />

strap. The watch, distributed<br />

by West End Collection, was<br />

the most popular product<br />

for the month of May.<br />

Jos Von Arx’s bracelet combines leather cord<br />

and stainless steel. The ‘Flexisize’ clip allows for<br />

the piece to be resized so that one size fits all. The<br />

item, distributed by The Russell Collection, was<br />

the most popular product for the month of July.<br />

O’Neils Affiliated’s 11.33-carat blue sapphire<br />

rough is said to appeal to an increasing demand<br />

for ‘raw’ jewellery. The gemstone, part of a<br />

limited parcel of Sri Lankan rough gemstones<br />

obtained by the supplier, was the most popular<br />

product for the month of June.<br />

Worth & Douglas’ Ebony women’s<br />

collection is said to encourage wearers to be<br />

confident individuals. The range comprises<br />

black zirconium rings fashioned into various<br />

designs, and was the most popular product<br />

for the month of August.<br />

Opals Australia’s pendant<br />

featuring a light opal from<br />

Coober Pedy is set in 18-carat<br />

yellow gold and surrounded<br />

by diamonds. It was the<br />

most popular product for the<br />

month of September.<br />

Engelsrufer’s Balance pendant is<br />

adorned with symbols of the lotus<br />

flower, scales and elephant.<br />

The piece, distributed by<br />

Duraflex Group Australia,<br />

features an interchangeable<br />

sound lens and was the<br />

most popular product for<br />

the month of October.<br />

Stones & Silver’s<br />

collection of necklaces<br />

is designed to be mixed<br />

and matched for a<br />

layered look. The offering<br />

– ranging from 35 cm<br />

chokers to 100 cm chains,<br />

as well as 45-70 cm<br />

necklets, lariats and fobs<br />

– was the most popular<br />

product for the month<br />

of November.<br />

+TURN TO PAGE 8<br />

FOR THE MOST POPULAR PRODUCT<br />

FOR THE MONTH OF DECEMBER.<br />

* Top products were measured each month based on the number of unique views on jewellermagazine.com<br />

10 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


AUSTRALIAN OPAL WATCHES<br />

Instyle Watches PTY LTD<br />

02 8399 7301<br />

sales@instylewatches.com.au<br />

www.pierrecardinwatches.com.au


MARTIN RAPAPORT<br />

IMAGE COURTESY: PROSUMER DIAMONDS<br />

UP CLOSE<br />

maverick<br />

WITH THE DIAMOND<br />

MARTIN RAPAPORT IS NEVER SHORT OF WORDS WHEN IT COMES TO<br />

DIAMONDS. COLEBY NICHOLSON MET WITH THE INDUSTRY NONCONFORMIST<br />

TO DISCUSS THE CURRENT STATE OF THE INTERNATIONAL DIAMOND MARKET.<br />

artin Rapaport: most people in the industry will know the name,<br />

or at least recognise the face and signature bow tie.<br />

The founder and chairman of Rapaport Group, which publishes<br />

Rapaport magazine and operates online trading platform RapNet<br />

among other products and services, began his career in the diamond industry<br />

in 1975 as an apprentice diamond cleaver in Antwerp.<br />

His Wikipedia page notes that he has been called a ‘maverick’ within the<br />

diamond industry and probably rightly so.<br />

I met with Rapaport in July to discuss the state of the industry and his often<br />

counter-intuitive and controversial stances on various industry issues.<br />

At the time, he is quick to say that the diamond industry is in a period of<br />

large “transition”.<br />

“Overall the diamond industry has settled, it’s not expanding,” he says. “You could<br />

say the pie is shrinking and people are fighting over the little pieces of the pie.”<br />

Rapaport explains there are several reasons for this, first of which is the fact that<br />

the boom in China quieted down a few years ago.<br />

“In addition, the US market has become more picky,” he continues. “Europe is<br />

gone, and with the oil price the UAE is gone – when I say ‘gone’, I mean that<br />

these markets are not a driving force in diamond demand.”<br />

Rapaport also notes that there is some concern that recent rough sales, to the<br />

tune of about US$1.8 billion, are entering the Indian market.<br />

“There seems to be a lot of rough coming in and there is no increase in polished<br />

demand,” he says. “So there is concern that inventory levels are too high, but<br />

again, we are chatting here now in July-August, and the Christmas season is<br />

around the corner where demand, specifically in <strong>December</strong>, can be triple or at<br />

least double the demand of the rest of the year.”<br />

EVOLVING NEEDS<br />

The industry may be in holding mode but Rapaport says there is optimism<br />

about next year, as well as in the longer-term, and that many changes are taking<br />

place at the consumer end.<br />

“The US is approximately 51 per cent of the market at US$42 billion – that would<br />

be diamond jewellery with metal. Rapaport Group expects the US market to<br />

probably pick up strongly next year,” he explains.<br />

“The consumerism issue is amazing in the US. First of all, you have the<br />

Millennials, who offer a whole different type of consumer demand. The<br />

Millennials are primarily focused on three things: an experience; customisation<br />

– their ring should be a little different, but it doesn’t mean customising from<br />

scratch; and finally, extreme customer service.”<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 13


Further to this, he predicts an increasing interest in social<br />

responsibility from Milennials.<br />

“With this cultural shift in demand in the US is the emergence of<br />

what I would call the ‘we’ generation,” Rapaport explains.<br />

“Everything is community and social. So the idea that people want<br />

to know where their diamonds are coming from is going to grow,<br />

and I believe it will evolve competition.”<br />

He envisions a time when customers will shop around based on<br />

whether a retailer offers a diamond from a ‘good source’.<br />

“A guy will come up and say, ‘My diamonds have a very good source,’<br />

and I’ll go to another store and I’ll say, ‘That guy told me his diamond<br />

had a good source, what about yours?’ Consider what happened<br />

with XXX GIA certification. There was no cut grade. People didn’t<br />

ask for cut grades but now cut grades have come into the fore and<br />

everyone demands it.”<br />

MATTER OF ETHICS<br />

Rapaport, who played an integral part in the establishment of the<br />

Kimberley Process, adds that one of the biggest concerns today is<br />

the “greenwashing” utilisation of the Kimberley Process.<br />

“Companies and countries say, ‘I have a Kimberley Process certificate,<br />

and therefore I’m in compliance with the anti-money laundering or<br />

counter terrorism funding,’ and that’s simply not true,” he explains.<br />

“The industry is still lying about the efficacy of the Kimberley Process<br />

certificates relative to money laundering. I see this as a tremendous<br />

risk to industry reputation because as you see there are more<br />

terrorist attacks taking place.<br />

“I’m not accusing anyone of anything specific but I’m saying the<br />

industry is at fault, and I think those in the industry that say that the<br />

Kimberley Process protects the industry from anti-money laundering<br />

and terrorist funding are liars.”<br />

When questioned whether such an issue has any real significant<br />

impact on a retail jeweller, given consumers, particularly in Australia,<br />

rarely ask if a diamond is ethically sourced, Rapaport is unyielding<br />

that it should be a focus for everyone.<br />

“What’s the difference between a dog and a leader?” he asks. “A dog<br />

sniffs everybody else’s behind to see where to go and a leader says,<br />

‘Hold on, this is where we need to go.’ The fact that consumers don’t<br />

ask about it is not a reason for the industry to be unethical.<br />

WORTH & DOUGLAS<br />

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“Are we leaders? Are we an ethical industry? If you say to me, ‘Well,<br />

we are not really as we only have to be an ethical industry if our<br />

customers ask for it,’ that is unacceptable by Rapaport standards.<br />

Second point is, as soon as god forbid, there is a problem, then it’s<br />

not just the reputational risk but it’s the tremendous damage that<br />

would come as the governments would start looking at us. Then<br />

people will start saying what are you doing? I think it’s wise to get<br />

ahead of the curve and we should always keep a clean house before<br />

people start to complain.”<br />

Tied with the subject of ethics and transparency is the issue of ‘over-


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It’s fair to say that Rapaport went on a warpath in 2014 after banning<br />

EGL grading reports from listing on RapNet.<br />

About three years on, is Rapaport confident that grading reports are<br />

more transparent?<br />

“I think eliminating EGL was a positive step. People were not<br />

happy that we were reducing income from some people but the<br />

fundamental thing about honesty and integrity and recognising<br />

that the industry needs to maintain its reputation remains,” he says.<br />

“I think the issue of the over-grading has definitely improved<br />

because people realised that we will not support it, and when we<br />

stop supporting these kinds of grading reports, they in fact more or<br />

less shut down.”<br />

NATURAL VS SYNTHETICS<br />

Regardless, Rapaport believes that many other “problems” still exist<br />

in the industry.<br />

One of the major advancements impacting the traditional natural<br />

diamond industry is the rise of synthetics.<br />

“THE ONE GOOD THING<br />

ABOUT SYNTHETICS<br />

IS THAT IT GIVES THE<br />

NATURAL DIAMOND<br />

PRODUCERS A KICK<br />

IN THE BUTT.”<br />

MARTIN RAPAPORT<br />

Rapaport says consumer transparency is linked here too because<br />

despite the powerful marketing campaigns, synthetic diamonds<br />

are not identical to natural diamonds.<br />

“That is a fundamental problem because the consumer is being<br />

misled by thinking that synthetic diamonds are identical, when they<br />

are not identical because there is no natural scarcity,” he explains.<br />

Rapaport believes that there will never be a shortage of synthetic<br />

diamonds, stating that production is only going to increase, which<br />

will inevitably lead to a price collapse.<br />

This, he continues, presents a challenge for retailers because they<br />

could be selling a synthetic today for US$10,000 but as the cost<br />

of production falls, that stone will have a value of US$100 in 10<br />

years’ time.<br />

“If your customer came back to you, it would look as though they<br />

were dealt a bad hand,” Rapaport states. “So if retailers want to sell<br />

synthetics, they need to tell their customer that the prices of these<br />

things will probably fall significantly more than natural diamonds.”<br />

Ph: +61 3 9587 1215<br />

Email: info@stonesandsilver.com.au


MARTIN RAPAPORT<br />

While this may be true, Rapaport says the natural diamond producers are not<br />

communicating the ‘scarcity value’ in an effective way.<br />

“The one good thing about synthetics is that it gives the natural diamond<br />

producers a kick in the butt. So I think that’s excellent,” he states. “It’s high time<br />

that the diamond mining companies took responsibility for their product<br />

because essentially they are the people that claw back the profits.”<br />

However, Rapaport says the matter is complex and references a recent<br />

announcement by the Gem & <strong>Jeweller</strong>y Export Promotion Council that it<br />

would contribute US$2 million to the Diamond Producers Association – the<br />

international group backed by mining companies and developed to promote<br />

generic diamonds.<br />

“I think it’s silly to give US$2 million to the mining companies because let’s say<br />

the industry gets together and promotes natural diamonds.<br />

“Let’s say there is a lot of demand for these [natural] diamonds because of the<br />

promotion by the private sector industry [the non-mining sector]. Do you think<br />

that the rough diamond suppliers are going to lower their prices or raise their<br />

prices?” he asks.<br />

“The story of the diamond industry is, if you get up there and you do too much<br />

promotion of generic diamonds, then the diamond mining companies raise the<br />

price and what you are doing therefore is creating higher prices for yourself.”<br />

Rapaport believes that just as the industry shouldn’t be supporting synthetic<br />

diamonds if there is no wish for that support, the industry shouldn’t support<br />

generic natural diamonds unless there are assurances that the results of<br />

investments will be available to those making the investments.<br />

“Don’t plant trees if someone else eats your fruit,” he says. “If the private sector<br />

here, the non-mining sector, spends money on generic diamond promotions,<br />

and the mining companies raise the price then that’s not rational. I mean, people<br />

can throw the money away, no problem, but it’s not fair.<br />

“So if we spend money promoting it we should get the fruits of our money and<br />

we should not see increases in rough diamond prices.”<br />

Wrapping up his assessment of the current state of the diamond industry,<br />

Rapaport says this is a period of re-assessment, re-configuration and re-doing.<br />

“This doesn’t mean that there aren’t a lot of interesting changes taking place,”<br />

he concludes.<br />

Oh, and that bow tie was present, naturally. i<br />

MARTIN RAPAPORT is the founder of Rapaport Group, an international network<br />

of companies that provides a range of products and services. The Rapaport Price<br />

List is said to have revolutionised the diamond trade by providing an independent<br />

benchmark that the global diamond industry uses to standardise, compare and<br />

negotiate prices.


CUSTOMER EXPERIENCE<br />

Defining the<br />

customer<br />

great<br />

experience<br />

ALL RETAILERS WANT TO<br />

PROVIDE A ‘GREAT CUSTOMER<br />

EXPERIENCE’ BUT HOW MANY<br />

DELIVER ON IT? DAVID ALLEN<br />

OUTLINES WAYS TO ACHIEVE<br />

THE HOLY GRAIL OF RETAIL.<br />

irst of all, it is important to understand that customers – not retailers<br />

– build brands; however, if every retailer knows that being obsessed<br />

with their customer is the key to success, why aren’t more retailers<br />

outrageously successful?<br />

What is it about the ‘name above the door’?<br />

<strong>Jeweller</strong>y retailers should ask themselves: what does the customer see when<br />

they are in the store and how do they feel when they visit and leave the store?<br />

Everyone subliminally measures the experience they get when making a<br />

purchase from a store. This reaction can be categorised in three ways:<br />

1. The experience was incredible<br />

2. The experience was indifferent<br />

3. The experience was terrible<br />

Most experiences are unfortunately indifferent, and what many retailers<br />

don’t realise is that all of these retail experiences are linked to how their<br />

customer is made to feel rather than what was purchased or what they<br />

paid for the product.<br />

Many retailers today underestimate the importance of the consumer’s trust<br />

and loyalty in connection to the store’s brand, and I believe this is linked to<br />

their failings.<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 17


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This is a pretty big statement, but let me explain, and actually<br />

contrary to popular belief, it is not that difficult to understand or<br />

implement. There is no need for process manuals or endless volumes<br />

of training materials.<br />

What is needed, and this is the critical part of the recipe of a great<br />

customer experience, is of course great people.<br />

Although this sounds a little cliché, it is the one area that retailers<br />

seem to have difficulty understanding and which to manage its<br />

importance even though they would all suggest that it is a focus.<br />

The two key ingredients are great store managers and, for those<br />

retailers with multiple stores or a chain, great regional managers.<br />

There are a number of different names for the role of regional<br />

manager – area manager is another – but let’s refer to the position<br />

as a regional manager for the sake of this discussion.<br />

Many retailers talk about the importance of store managers but<br />

understand less about what makes a great store manager.<br />

Further, regional managers are rarely talked about, mentioned,<br />

nor given focus. The reality is that this role is critically important;<br />

a great regional manager can have an enormous influence on the<br />

profitability of a retail business, and a bad one can really do a lot<br />

of damage because of their influence on the store manager.<br />

GREAT STORE MANAGERS<br />

The very best store managers are those who are the best at three


CUSTOMER EXPERIENCE<br />

core competencies: selling, being a<br />

merchant and coaching.<br />

In a small footprint retail store everyone<br />

contributes, and the store manager must<br />

be the most visible person to customers.<br />

Retailers should be very wary of the store<br />

manager who does not want to be on the<br />

shop floor. Store managers should be one<br />

of the best sales people within the store day<br />

after day and week after week.<br />

In order to maximise sales, they need to<br />

understand how to utilise the real estate in<br />

their store to best present the products they<br />

are selling and they also need to be great<br />

coaches as they are responsible for a team<br />

of people and the working environment<br />

that they create for them.<br />

GREAT REGIONAL MANAGERS<br />

The very best regional managers are those<br />

who are the best at the same things that a<br />

great store manager is great at: selling, being<br />

a merchant and coaching.<br />

If they are not great at these key<br />

competence areas then how do they, or<br />

could they, set the right example for the<br />

store manager and the team to follow?<br />

How can they coach a store manager to be<br />

a better salesperson if they themselves are<br />

not a great salesperson?<br />

In addition to these three core<br />

competencies, a great regional manager<br />

needs to have strong competence in the<br />

areas of business acumen, leadership and<br />

negotiation and influence. They are, after<br />

all, responsible for a number of stores, and<br />

there is a much higher level of profit and loss<br />

accountability, stakeholder management<br />

and leadership.<br />

A great regional manager also needs to be<br />

present, genuine and effective.<br />

What does it mean to be effective? This<br />

is important as the way that a regional<br />

manager uses their time has a big impact on<br />

how empowered a store manager feels.<br />

A regional manager’s number one priority<br />

is the store manager; the centre of their<br />

focus is the store manager, while the<br />

team members in the retail store are the<br />

responsibility of the store manager.<br />

Many regional managers don’t understand<br />

this concept, which can degrade<br />

empowerment for staff members.<br />

It is the regional manager’s role to coach<br />

the store manager to manage their own<br />

team and this should include training on the<br />

recruitment of store teams.<br />

The very best regional managers work<br />

with the store manager in such areas and<br />

decisions, empowering them to choose their<br />

own people.<br />

Some regional managers don’t understand<br />

the difference between coaching and doing.<br />

The regional manager does not run the<br />

store, the store manager does.<br />

So, jewellers who have empowered great<br />

store managers and regional managers have<br />

some of the critical ingredients to a great<br />

customer experience.<br />

LOSE THE ‘WAY OF SELLING’<br />

For a great customer experience, retailers<br />

don’t need the overused ‘five step’ sales<br />

structure. In fact, retailers don’t need<br />

a selling process or a physical mystery<br />

shopping process, which is archaic because<br />

it is not real!<br />

They need to empower store managers to<br />

look after their customers. The definition<br />

of a great customer experience is individual<br />

to every store. Let the team be the best<br />

version of themselves, making sure that they<br />

understand it is okay to do so.<br />

A customer recalls a great experience<br />

because a team member was genuine in<br />

their approach, not because a team member<br />

asked an open-ended question.<br />

Empowerment, however, must be<br />

supported by knowledge otherwise it<br />

is irresponsible. It is the storeowner’s<br />

responsibility to provide the knowledge<br />

– great store managers and great regional<br />

managers need to be developed.<br />

GREAT CUSTOMER EXPERIENCE<br />

Let’s summarise the philosophy of a great<br />

customer experience:<br />

• A great customer experience is the<br />

responsibility of the entire organisation.<br />

Retailers who want to engage with<br />

customers need to engage with their<br />

team, because, as previously mentioned,<br />

what the customer is saying is directly<br />

related to how employees feel about<br />

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CUSTOMER EXPERIENCE<br />

where they work. The stores should be positioned as the beating heart<br />

of the business and store managers should be openly empowered to look<br />

after their customer. Where possible, retailers should recruit ‘their customer’<br />

so they can then sell to the customer. Employ people who love the store’s<br />

brand, or if they are unfamiliar with the store’s brand give them a reason<br />

to love the brand by treating them well. Focus should be placed in the<br />

areas of compensation, incentives, reward, recognition as well as learning<br />

and development.<br />

“WHERE POSSIBLE,<br />

RETAILERS SHOULD<br />

RECRUIT ‘THEIR<br />

CUSTOMER’ SO THEY<br />

CAN THEN SELL TO<br />

THE CUSTOMER.”<br />

• Selling skills are very important because, after all, in retail that is what<br />

retailers do – they sell. Developing a toolbox of training materials with a<br />

selection of selling tips and skills needs to be created and utilised. <strong>Jeweller</strong>s<br />

don’t need a ‘way of selling’ – the steps of the sale or a sale process –<br />

they need some practical selling advice, a great working environment<br />

and to be empowered to look after their customer. It is as simple as that.<br />

• Measure the customer experience in the right way. Measure the financial<br />

results and find a way to measure how the customer was made to feel.<br />

An important part of this is making sure that the team works within the<br />

boundaries of a small number of financial KPIs. Simplicity is key and the<br />

store’s team should be measured on a small number of financial KPIs.<br />

Providing customers with a great experience is the role of every person<br />

employed by the business. Recruit people who are passionate – or are<br />

given a reason to be passionate – about the store’s brand. Provide the team<br />

with skills and the know-how to measure the experience, as well as the<br />

financials and KPIs, and empower retail store managers to deliver a great<br />

customer experience for their customers. i<br />

DAVID ALLEN is president of Pandora’s EMEA (Europe, Middle East, Africa) region.<br />

He was appointed to this newly created position in 2015 and prior to that, was<br />

Pandora Australia and New Zealand president. Before entering the jewellery<br />

industry, Allen had extensive experience in Australian retail, having worked for<br />

companies including Pretty Girl Fashion Group, Woolworths and Colorado Group.<br />

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NEW NORMAL<br />

Prospering in the<br />

New Normal<br />

THE RETAIL LANDSCAPE HAS ALTERED FOREVER<br />

AND DRAMATIC CHANGES ARE STILL EXPECTED.<br />

COLIN POCKLINGTON REPORTS ON HOW<br />

JEWELLERS CAN BEST ADAPT TO A CHANGING<br />

MARKET IN ORDER TO SURVIVE AND THRIVE.<br />

ost readers will remember the look of happy consumers circa 2009;<br />

however, there have been less of those in the years since and this<br />

article will explain why as well as how local and international trends<br />

have come together to impact the jewellery industry.<br />

I started tracking Australian jewellery and watch sales in 1982 and Figure 1<br />

(See page 22) shows the period from 1982 to 2009.<br />

In 2002, I noticed there had been an increase in real income for the average<br />

Australian and the industry was on a path of growth. At that point there was<br />

a tremendous opportunity for jewellers to increase the sales of luxury goods,<br />

particularly diamond sales. As Figure 1 indicates, the average jeweller from about<br />

2002 onwards achieved very good growth and much of that was due to increased<br />

diamond sales.<br />

Then of course the global financial crisis (GFC) hit in 2010 and I predicted the<br />

industry would need strategies to survive in a ‘slowing’ economy. I expected that<br />

the economy would for some time be quite slow; that prediction was correct but<br />

it was also for a lot longer than I had anticipated.<br />

Tracking jewellery and watch sales after this period, Figure 2 (See page 22) shows<br />

that sales dropped slightly to about $3 billion by 2012; however, were back above<br />

$3 billion by 2016.<br />

In the financial year just ended, which is not shown in Figure 2, there will be a<br />

6-8 per cent drop in jewellery sales. Seven years of static sales, and now a drop<br />

is putting a lot of pressure on the industry.<br />

REASONS FOR THE FALL<br />

International gross domestic product (GDP) growth has halved since the GFC,<br />

which means the whole world has been affected to some extent. This is because<br />

of lower population figures, the retirement of Baby Boomers, a decline in labour<br />

force participation and the fact that technology/innovation has been primarily<br />

used to steal market share, rather than drive growth in jobs and thus not adding<br />

wealth to the world economies.<br />

When putting my analysis together in June this year, Australia had the third<br />

highest household debt to GDP, as seen in Figure 3 (See page 24). It was twice that<br />

of the G20 (20 largest economies), twice as bad as Europe and 50 per cent worse<br />

than the US. Since Figure 3 was produced, Australia has moved into second place.<br />

Unemployment rate in Australia is 5.7 per cent; however, the more important<br />

figure is that 26 per cent of people are ‘under’ employed – they’ve got part-time<br />

or casual jobs and they’re not getting the sufficient number of hours they need in<br />

a week to cover their living costs.<br />

Interest rates have been low for many years and everyone is concerned what<br />

will happen when they start to increase, which they inevitably will at some point.<br />

An interest rate increase from 4 per cent to 5 per cent might not seem much – it’s<br />

only 1 per cent – but that means a 10 per cent increase in repayments to the bank<br />

each month.<br />

Online retail sales is an influence as well, with Australian online sales in the year<br />

ended 2015/2016 being about $20 billion or representing 6.7 per cent of total<br />

retail sales.<br />

We’re also currently going through another revolution. We’ve had the agricultural<br />

revolution, the first industrial revolution, the digital revolution and now the<br />

technological – or fourth industrial – revolution. This one is affecting or disrupting<br />

almost every industry around the world and there are more changes in the years<br />

ahead with artificial intelligence, robotics, autonomous vehicles and 3D printing.<br />

The impact of 3D printing is going to be huge – many things purchased in a few<br />

years won’t require anyone to physically visit a store to make a purchase; they’ll<br />

simply download a program and print a product using their own 3D printer.<br />

Australia’s national accounts indicate that roughly 80 per cent of the average<br />

spending by population is on essentials – rent, loan repayments, food, health,<br />

power and so on. That leaves about 20 per cent for non-essentials like expensive<br />

clothing and jewellery.<br />

Now in the past four or five years, there’s been negative wage growth in real terms.<br />

Wages haven’t gone up enough and so the average person has had a 1-2 per cent<br />

decrease in their income in real terms and they’ve come from $100 down to $98 –<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 21


FIGURE 1. AUSTRALIAN JEWELLERY AND WATCH SALES 1982-2009<br />

Karl Lagerfeld <strong>Jeweller</strong>y - Just Released<br />

FIGURE 2. AUSTRALIAN JEWELLERY AND WATCH SALES 1990-2016<br />

these numbers are for the purpose of making a simple comparison in<br />

the calculations.<br />

Figure 4 (See page 24) shows that consumers still have to spend the<br />

same amount of money on essentials, which means they’re $2 short<br />

or 2 per cent short on their spending for non-essentials. In this<br />

example, the consumer’s non-essential spending falls from $20 to $18,<br />

which is a 10 per cent reduction. That small decrease in real income<br />

has a more profound effect on discretional spending.<br />

What’s currently happening is that at the same time that the cost of<br />

essentials has increased, the real income has dropped by about 1-2<br />

per cent and the amount of money spent or available to spend on<br />

non-essentials has decreased by about 15 per cent.<br />

In addition to pressures in the local economy, the consumer is also<br />

stressed because of world unrest and globalisation.<br />

FIVE MEGATRENDS<br />

This leads to the five megatrends driving the disruption and which<br />

will be in full force by 2025.<br />

The first is ‘rapid urbanisation’ – 60 per cent of the world’s population<br />

will live in one of 60 ‘mega cities’ around the world by 2025, including<br />

Sydney, Melbourne and Brisbane.<br />

Exclusively Distributed by<br />

At the same time there will be 80 billion communication devices in<br />

the world and it’s said that the average person will own as many as<br />

five, which means that shopping is going to be influenced even more<br />

by digital means than it is now – welcome to the ‘digital age’.<br />

‘Resource scarcity’ is another megatrend, where energy prices will<br />

PH +613 95 533 777 | MOB 027 309 2039<br />

info@westendcollection.com.au | www.westendcollection.com.au


NEW NORMAL<br />

increase. There will be a ‘shift in economic<br />

power’ as India will be the next country to<br />

grow rapidly with the third largest GDP. Asia<br />

and Africa will also expand rapidly.<br />

A ‘demographic change’ is at play as well.<br />

People will live longer and have fewer<br />

children. A few years ago in Australia, there<br />

were four employees for every retiree but<br />

by 2050 there is going to be 1.5 employees<br />

per retiree.<br />

Globalisation has brought challenges and<br />

opportunities. While reduced transportation<br />

barriers and communication costs have<br />

resulted in new markets, there’s been a<br />

disruption of labour-based markets – evident<br />

in the Australian car manufacturing industry,<br />

which has moved offshore.<br />

Then we come to the retail disrupters.<br />

Companies entering Australia, like Amazon<br />

and Alibaba, are agile, innovative competitors<br />

finding clever ways to launch into the market,<br />

and the jewellery industry has to do the same<br />

– it has to be smarter.<br />

Interestingly, 40 per cent of people still<br />

consider shopping a chore because of<br />

difficulty in finding a product, long checkout<br />

lines, inability to locate items and poor<br />

service. While 93 per cent still buy from bricksand-mortar<br />

stores, 7 per cent are buying<br />

online. That’s a lot of trips that people aren’t<br />

making to a shopping centre because they’ve<br />

already bought something online. This is one<br />

of the reasons why shopping centre foot<br />

traffic has been falling for the past few years<br />

and why many jewellery stores have been<br />

able to renew leases this year for equal or<br />

lower rates.<br />

Amazon issued a statement in the Sydney<br />

Morning Herald in April that stated: “We’re<br />

going to destroy the retail environment<br />

in Australia.”<br />

Before launching its operation in Australia,<br />

it’s understood that Amazon will study<br />

the market, collecting price-points on the<br />

products it will sell, and then set prices at<br />

30 per cent less.<br />

The retail giant is all about gaining market<br />

share; however, once it achieves huge<br />

worldwide market share, prices will<br />

inevitably increase.<br />

While Amazon sells jewellery in several<br />

regions, it is understood that it won’t initially<br />

introduce the category in Australia … but<br />

one has to assume it’s only a matter of time<br />

before it will.<br />

A recent jewellery search on the company’s<br />

US site showed 52,000 bracelets, 54,000 pairs<br />

of earrings, 54,000 necklaces and the list of<br />

offerings goes on. The choice is enormous<br />

and I think this retail behemoth is going to<br />

cause considerable concern for chain stores<br />

or any jewellery store selling what I call a<br />

more generic product.<br />

Now looking at the poor old jewellery store<br />

with its stressed customers.<br />

For a typical independent jewellery business<br />

profile, based on an average of the figures<br />

I’ve looked at, sales are about $500,000, with<br />

profit before tax usually averaging about 5<br />

per cent or 7 per cent of sales.<br />

If all the market changes and disrupters<br />

previously discussed affect the average<br />

store by just 10 per cent of sales, provided<br />

expenses remain the same, then it will<br />

basically break even. A 15 per cent drop in<br />

sales would put most jewellery stores at a<br />

loss. <strong>Jeweller</strong>s can’t afford to lose even 10<br />

per cent of sales; they have to find a way to<br />

maintain and possibly increase sales.<br />

A LOOK TO THE FUTURE<br />

Here is an overview of the main changes<br />

that will occur in retail.<br />

There’s going to be even more cross-border<br />

business-to-consumer commerce. According<br />

to Amazon, this business structure will<br />

increase 34 per cent in the next five years.<br />

Several years ago, there used to be<br />

manufacturers in Asia and an agent and<br />

then there was a local importer and a<br />

wholesaler and a retailer and a consumer.<br />

That’s flattening right out. More businesses<br />

producing products are trying to find ways<br />

to sell directly to consumers and cut out the<br />

middleman, and it’s only going to increase.<br />

There’s also more global competition coming:<br />

a number of global retail chains, particularly in<br />

fashion, have already entered the market but<br />

more are on their way from various industries.<br />

What many people don’t realise is that bricksand-mortar<br />

store sales are more profitable<br />

than online sales. It’s not good business sense<br />

to transfer a profitable sale from a bricks-and-


FIGURE 3. GLOBAL ANALYSIS OF HOUSEHOLD DEBT TO GDP<br />

FIGURE 4. A SMALL FALL IN REAL INCOME IMPACTS DISCRETIONAL SPENDING<br />

mortar store to an unprofitable sale, or a less profitable sale, on an<br />

online environment.<br />

As previously mentioned, the prevalence of 3D printing is going<br />

to increase.<br />

Another big factor is social proofing – social media reviews and thirdparty<br />

ratings that influence buying decisions. This is going to be much<br />

more powerful than traditional mainstream media, which reaches less<br />

than half of the people it did 10 or 15 years ago.<br />

The good news is that bricks-and-mortar stores still have a big<br />

advantage over online retailers as they can provide more effective<br />

personal advice.<br />

The opportunities for bricks-and-mortar storeowners is that they will<br />

attract a lot of customers if they can offer a really well presented store,<br />

really well trained staff and a great experience.<br />

RETAIL ‘101’ FOR TOUGH TIMES<br />

There are four areas that retailers should concentrate on during a<br />

downturn: basics and controls; costs; cash conservation; and maintain/<br />

increase sales.<br />

Let’s start with complete financial control. <strong>Jeweller</strong>s need to be very<br />

aware of their gross profit (GP) percentage rate, particularly if they have<br />

a workshop.<br />

Most costs are okay for many small businesses in this industry;


NEW NORMAL<br />

however, it’s important to make sure that<br />

particularly labour and rent are within the<br />

industry benchmarks. The average rent for a<br />

jewellery store should represent about 13.7<br />

per cent of sales. If rent is above that, which it<br />

could be if the store is at a Westfield shopping<br />

centre for example, then the business would<br />

need to spend less in advertising with labour<br />

costs being about 18-22 per cent of sales.<br />

I mentioned GP because a lot of stores have<br />

workshops (manufacturing bench) and if the<br />

storeowner has jewellers working for them<br />

or if they’re the jeweller then they need to<br />

make sure they know the workshop’s GP. The<br />

workshop needs to recover the full labour<br />

and running costs plus a wholesale margin<br />

of 25 per cent.<br />

The next point is to conserve cash. In tough<br />

times, retailers must conserve cash so always<br />

accept interest-free financing if available.<br />

Conserving cash also means managing stock<br />

even better than before. In other words, look<br />

at the stock-turn rate of the major product<br />

categories and find a way to improve them<br />

if they’re outside industry benchmarks.<br />

Once all of that is in place the focus is to<br />

maintain or better still, try and increase sales.<br />

The whole focus in tough times has to be<br />

marketing in order to maintain and increase<br />

sales. Marketing must be the focus given<br />

jewellery is an industry with a higher margin<br />

and very low stock-turn rate.<br />

ADDRESSING CHALLENGES<br />

With less foot traffic, retailers have to find<br />

a way to increase their hit rate for the<br />

customers that do visit the store. If the<br />

business is getting four sales out of 10,<br />

then it needs to increase that to five out<br />

of 10 or more.<br />

Customers are seeking custom-made<br />

merchandise, in a greater proportion<br />

to off-the-shelf product, and/or greater<br />

personalisation of products. This trend<br />

actually started about seven years ago but<br />

it’s going to increase a lot in the years ahead<br />

and jewellers have to gear themselves up to<br />

allow for more custom work.<br />

International management consultants<br />

McKinsey & Co issued this statement in<br />

April: “The future is handmade. Younger<br />

consumers are embracing handmade crafts,<br />

including jewellery, like no time since the<br />

advent of mass production. As jewellery is<br />

fundamentally a form of self-expression,<br />

the segment is ripe for bespoke disruption.”<br />

The firm studied the retail jewellery industry<br />

worldwide and that’s what they believe the<br />

sector should be embracing – the growth<br />

in handmade, designed jewellery.<br />

Reduced discretionary spending forces<br />

retailers to address what is in the cabinets<br />

and windows. <strong>Jeweller</strong>s must always carry<br />

some lower-priced items to make the stock<br />

look affordable, and thus get people in the<br />

door. This doesn’t mean lowering the price<br />

for everything or bringing in cheaper stock<br />

but it does mean finding some focal areas<br />

with lower price points to make people<br />

realise they can shop in the store.<br />

As 83 per cent of people do research online<br />

before they buy from bricks-and-mortar<br />

stores, it’s essential that every jeweller has<br />

a good website and that it’s mobile friendly.<br />

Stores also probably need to reduce their<br />

diamond jewellery inventory. The average<br />

stock-turn rate in diamonds for most people<br />

in this industry is pretty poor – it’s probably<br />

closer to 0.3 or 0.4 and it really needs to be<br />

about 0.8.<br />

Consumers have been driven by a need for<br />

convenience but they also want or appreciate<br />

a more differentiated and seamless<br />

experience offline and online.<br />

Today’s consumers want what they want,<br />

when they want it.<br />

<strong>Jeweller</strong>s will need to be so much better at<br />

whatever they do now than they were even<br />

one year ago because we are going through<br />

what I call a transformation of discretionary<br />

retail. This is not just in Australia but also<br />

around the world and everyone will have to<br />

make themselves fit.<br />

Sadly, some businesses won’t get through the<br />

next 12 to 18 months; however, those that do<br />

will probably come out the other end a lot<br />

stronger. Welcome to the New Normal. i<br />

COLIN POCKLINGTON has more than 40 years<br />

of experience in strategic and business planning<br />

in the retail jewellery industry. He is co-founder<br />

of Australia and New Zealand’s largest buying<br />

group Nationwide <strong>Jeweller</strong>s.<br />

www.collectivedesigns.com.au<br />

sales@collectivedesigns.com.au<br />

+61 (0)2 4367 3922


X FACTOR<br />

ALESSA JEWELRY ANDRÉS GALLARDO BUTANI<br />

Beauty<br />

in the details<br />

IN-STORE DESIGN IS A MAJOR INFLUENCER OF CONSUMER<br />

PURCHASING DECISIONS BUT FINDING THE RIGHT VISUAL<br />

STRATEGY ISN’T ALWAYS EASY. TALIA PAZ SCOURS THE GLOBE<br />

IN SEARCH OF JEWELLERY STORES WITH THE X FACTOR.<br />

hat are consumers seeking when they enter a jewellery store?<br />

Aside from the obvious assortment of product, consumers<br />

expect to enter an environment that reflects the attributes that<br />

the business ‘stands’ for. A combination of the look, feel and smell<br />

of a store arguably plays a large role in helping to make a customer<br />

feel comfortable and ultimately make a purchase. The word ‘experience’ is<br />

thrown around a lot but surely for good reason.<br />

Kevin Linberg, head of design at global retail design agency Sheridan & Co, says<br />

telling the business’ story in a clear and compelling way is critical to making a<br />

solid first impression.<br />

“Your brand needs to be reflected in the design and visual merchandising,”<br />

Linberg states. “A strong and inspired design language that considers the use<br />

of materials, motifs and lighting will establish what makes your brand unique<br />

and will communicate this to customers.”<br />

Sheridan & Co retail strategist Alice Bodkin believes jewellers should factor in<br />

the important role emotion plays within the consumer journey.<br />

“How does the brand want the consumer to feel? Excited, uplifted, educated?”<br />

Bodkin asks. “By reflecting upon this, the retail space can be created to achieve<br />

an emotive context that nurtures a memorable and lasting impression.”<br />

Carol Bagaric, founder of visual merchandising consultancy Carol B, has similar<br />

sentiments. “As a jewellery purchase is often made with the heart and not the<br />

mind, it is imperative that the environment within a jewellery store speaks to<br />

this type of purchasing behaviour,” Bagaric says.<br />

“Lighting, seating, ambience, store fit out, layout, graphics and signage – and<br />

staff! – should all be conducive to entertaining and indulging the customer as<br />

they make some of the biggest and most emotional purchases of their lives. It’s<br />

a special purchase and a very personal one; therefore, the store should reflect<br />

this type of environment.”<br />

On that note, <strong>Jeweller</strong> has collated some of the world’s most intriguing jewellery<br />

stores and asked those involved in the design to shed light on how it has been<br />

used to create a shopping environment that leads to sales. Not all retailers will<br />

have the budget for a major store revamp; however, there is certainly value in<br />

gaining inspiration and analysing where potential improvements could be made,<br />

even if that simply means giving the walls a fresh coat of paint.<br />

26 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


Andrés Gallardo<br />

Name: Pablo Limón<br />

Position: director of architecture,<br />

Savvy Studio<br />

Country: Spain<br />

When did the store open? The store was inaugurated in May 2014.<br />

Who is the target market and how did they influence the store design?<br />

Andrés Gallardo is quite an established and well-known jewellery designer,<br />

so the target audience was for those who wanted to explore the brand in<br />

a more intimate setting. That is the reason we combined the showroom<br />

with the workshop – we wanted to create something experimental so we<br />

decided to really focus on creating a design that is mobile and flexible.<br />

Creating modular pieces using materials such as marble and wood was a<br />

way to change the layout of the store easily and as often as desired.<br />

Alessa Jewelry<br />

Name: Alessandra Robles<br />

Position: designer and co-founder, Alessa Jewelry<br />

Country: Guatemala<br />

When did the store open? We opened our store in August 2015.<br />

With the relationship between store ambience and consumer<br />

purchasing in mind, which features in the store encourage sales? One of<br />

the main things we focused on was the use of strong materials to coincide<br />

with the bold aesthetic of the jewellery. The use of wood and marble<br />

against the jewellery is clear and to the point. The mobility and modular<br />

characteristics are a physical reflection within the store of the layers to the<br />

pieces created by Andrés. All small display pieces allow the jewellery to be<br />

displayed vertically and horizontally, creating a sense of flexibility in the<br />

way the jewellery is displayed. It is not only about displaying the jewellery<br />

but also activating the space.<br />

What is the store design’s ‘wow’ factor? The wooden boxes that<br />

can be pulled out were the key pieces for us. They are the most convivial<br />

and simple but the most impactful. They create a sense of unveiling<br />

for the customer.<br />

Who is the target market and how did they influence the store design?<br />

The Alessa woman is curious, fashionable, vibrant and modern. She is<br />

worldly and connected and looks for great design and craftsmanship.<br />

Our purpose is to offer a luxury jewellery experience through minimal,<br />

versatile and modern designs that are key influencers seen through the<br />

design of the store.<br />

With the relationship between store ambience and consumer<br />

purchasing in mind, which features in the store encourage sales?<br />

The store has an airy aesthetic with pastel tones, soft curves and geometric<br />

golden features where the consumer can shop in a cosy environment.<br />

From custom-made wood furniture and cushioned seats to the beverages<br />

and surprises that we offer – the store ambience is a balance between<br />

minimalistic and edgy, achieved through a mix of organic and natural<br />

materials. We also have a customised bamboo store scent, which is<br />

reminiscent of a journey in paradise, a journey not to be easily forgotten.<br />

What is the store design’s ‘wow’ factor? The artisanal curtain made by<br />

local women from Guatemala. Alessa loves to empower underprivileged<br />

women and helps to provide better lives for them. What this rope curtain<br />

represents is the hard and creative work of artisanal women who Alessa<br />

values, admires and supports.


Baccio <strong>Jeweller</strong>s<br />

Name: Rod Faucheux<br />

Position: director, Loopcreative Studio<br />

Country: Australia<br />

When was the renovated space completed? February 2015.<br />

Who is the target market and how did they influence the store design?<br />

There is no particular age demographic; however, the clientele shopping<br />

at Baccio come seeking pieces that are both timelessly modernistic and<br />

individualised. We needed to design a space offering a unique setting<br />

where those ideals and characteristics could be easily seen. Baccio has<br />

been in business for more than 40 years so we needed to make sure the<br />

new store design felt natural to existing clientele, whilst still inviting new<br />

shoppers to discover the brand.<br />

With the relationship between store ambience and consumer<br />

purchasing in mind, which features in the store encourage sales?<br />

Baccio specialises in bespoke jewellery and engagement rings, so it’s<br />

only natural that we should design an interior that is sensitive to what<br />

is being created inside the space. A potential consumer feels<br />

immediately confident approaching the store, viewing the beautiful<br />

jewellery-like façade, brass cantilevered counters and Italian marble<br />

flooring. The customer can immediately sense that the materials are<br />

stylish, contemporary and impeccable in quality. The store itself is a<br />

crafted, unique piece of art, just as the handmade jewellery it retails.<br />

What is the store design’s ‘wow’ factor? The shop front façade is the<br />

element that really draws you in with its dramatic, iconic and elegant<br />

appeal. The façade concept was influenced by a necklace that the owner,<br />

Mario Zamel, had in the store. We mimicked the geometric shape of the<br />

necklace throughout the steel work and suede-lined display boxes in<br />

the shop front. The metal mesh curtain layered behind the contrasting<br />

framework feels like the skin behind the necklace and warms up the<br />

visual hardness that the steel work implies.


Butani<br />

Name: Stefano Tordiglione<br />

Position: creative director, Stefano Tordiglione Design<br />

Country: Hong Kong<br />

SamsGroup.com.au<br />

ssales@samsgroup.com.au<br />

02 9290 2199<br />

When was the renovated space completed? The space was renovated in 2015.<br />

Who is the target market and how did they influence the store design? The Peninsula is one of the top<br />

luxury hotels in Hong Kong. The visitors and guests are affluent with fine taste of quality; they travel a lot<br />

and have a good understanding and exposure to luxury life. The aim is to make an elegant and high-end<br />

boutique to attract these customers.<br />

With the relationship between store ambience and consumer purchasing in mind, which features in the<br />

store encourage sales? As most of the customers are women (obviously), it was important to create a warm<br />

and welcoming space so customers could relax. The overall brown/beige colour is comfortable in leather,<br />

wood and metal. A large piece of marble is used at the façade to highlight the luxury of space. The secret of<br />

making the space comfortable also lies in the use of thick carpet – every woman knows how good it feels to<br />

walk on thick carpet after a long day of shopping.<br />

What is the store design’s ‘wow’ factor? The use of mirror and reflective materials; the shape of our boutique<br />

is narrow and long, which made the design challenging. We have incorporated mirror and mirrored-finished<br />

materials to enlarge the space.<br />

Denovo Diamonds<br />

Name: Caryll Martinez<br />

Position: creative director, Denovo Diamonds<br />

Country: Philippines<br />

When did the store open? The Denovo Diamonds flagship<br />

store opened in June 2016.<br />

Who is the target market and how did they influence the store design?<br />

Our target market is men. Specifically, men who buy jewellery for<br />

women, whether it is for proposals, weddings or anniversaries.<br />

Denovo Diamonds developed a unique store design that is sleek<br />

and architectural so that men passing by would gravitate towards<br />

our store and would not feel intimidated when they walked in.<br />

We don’t want just to sell product; we want consumers to have a<br />

memorable experience.<br />

With the relationship between store ambience and consumer<br />

purchasing in mind, which features in the store encourage<br />

sales? Denovo’s store design deviates from the natural norm<br />

of a jewellery store where one would find its staff behind glass<br />

counters. This little change allows more interaction between the<br />

customer and our jewellery consultants, making the sales process<br />

less overwhelming. There is a consultation area at the back of the store where<br />

clients can sit in privacy. We also see diamond jewellery as comparable to art in<br />

that the jewellery is displayed and laid-out in a way that resembles an art gallery,<br />

contributing to our very unique and luxurious store ambience.<br />

What is the store design’s ‘wow’ factor? The definite ‘wow’ factor in our store<br />

is the three-dimensional walls that have black glass mounting with white,<br />

triangular light boxes. These resemble the facets of a diamond and the black<br />

glass accents the white showcases to draw the consumer’s eye to the products.


X FACTOR<br />

FOR ALL PLAIN BANDS<br />

Hirsch <strong>Jeweller</strong>y<br />

Name: Lone Visby Olsen<br />

Position: co-owner, Ehlers & Visby Metal Design Studio<br />

Country: Denmark<br />

When did the store open? Hirsch <strong>Jeweller</strong>y opened its doors in<br />

September 2015. Since then, we [myself and husband and co-owner<br />

Jan Ehlers] have continued cooperating with the business whenever<br />

new needs or ideas arise. It is definitely an on-going collaboration.<br />

Who is the target market and how did they influence the store<br />

design? Hirsch <strong>Jeweller</strong>y is mainly aimed at people looking for a<br />

piece of jewellery that matters and will last forever. Customers are<br />

inspired by creative, innovative design. They demand jewellery<br />

made of honest and exclusive materials. They perceive themselves<br />

as unique, creative and interested in design and the décor should<br />

reflect this. Ehlers & Visby specialises in contemporary retail design,<br />

handmade from luxury-recycled materials, primarily consisting of<br />

naturally-patinated iron and metals with rough, textured surfaces.<br />

With the relationship between store ambience and consumer<br />

purchasing in mind, which features in the store encourage sales?<br />

Storeowner Susanne Rosenberg agrees that it is a combination of<br />

the surroundings, good service and, of course, the jewellery. If she<br />

had to choose a décor detail that encourages consumers to make a<br />

purchase, it would be the vitrine consoles that exude exclusivity and<br />

good craftsmanship.<br />

ORDER IN THE MORNING.<br />

since 1966<br />

PAY IN FULL.<br />

TWM<br />

DISPATCH SAME DAY.<br />

Co<br />

What is the store design’s ‘wow’ factor? We asked the storeowner<br />

to nominate one ‘wow’ factor and she promptly said: “The vitrine<br />

consoles and, in a sharp second-place, the new outdoor landmark<br />

sign.” It is our prime task to make bespoke furniture that the<br />

customer desires so, for our own sake and for the sake of the<br />

company, this is the furniture of which we are most proud.<br />

since 1966<br />

since 1966<br />

TWM<br />

TWM<br />

Co<br />

PROUDLY AUSTRALIAN MADE JEWELLERY & EXPERTS IN REFINING<br />

TWM<br />

since 1966<br />

Co<br />

TWM Consolidated PTY LTD<br />

03 9547 3113<br />

65 Roberts Avenue,<br />

Mulgrave, VIC, 3170<br />

Contact info@twmco.com.au<br />

www.twmco.com.au<br />

Instagram @twm_co<br />

Facebook @twmcorings<br />

Boston Offices:<br />

333 Washington St, Ste 521, Boston MA 02108, United States


Luxe by Hugh Rice<br />

Name: Lloyd Blakey<br />

Position: founder and creative director, Innovare Design<br />

Country: England<br />

When did the store open? The store was completed in October 2016.<br />

Who is the target market and how did they influence the store<br />

design? Buyers of fine jewellery and Swiss watches who are<br />

predominantly local to the East Yorkshire region. The market is<br />

discerning and demands high service levels as well as un-rushed<br />

private consultation. This drove the store layout and we opened up<br />

the space to allow for more discreet consultations and to facilitate<br />

a high-end boutique feel.<br />

With the relationship between store ambience and consumer<br />

purchasing in mind, which features in the store encourage sales?<br />

The store design needed to provide the perfect showcase for the<br />

luxury jewellery and watches on display. We opened sight lines<br />

by removing walls and accentuating the new spacious feel with a<br />

lime-washed oak herringbone plank floor bordered by a sumptuous<br />

silver-grey carpet. Lighting plays an important part in creating the<br />

right ambience – we introduced dramatic, glittering chandeliers<br />

in the entrance atrium to herald a sense of arrival. Elsewhere,<br />

delicate cut-glass pendants provide focus and intimacy over private<br />

consultation desks.<br />

What is the store design’s ‘wow’ factor? It’s difficult to extract one<br />

element as everything is designed to work together; however, with<br />

high levels of service at the heart of Hugh Rice’s success, I think<br />

the private-consultation areas are a favourite of mine – the luxury<br />

detailing, the warm light from the cut-glass pendants and the<br />

modular wall-panel display that accommodates key promotions<br />

and hero pieces all come together beautifully. i


GEMSTONE FACETING<br />

High-quality<br />

FACETING<br />

is the way of the future<br />

SPESSARTITE BY DMITRY STOLYAREVICH<br />

THE COMMERCIAL REALITIES OF GEM-CUTTING MEANS<br />

THERE IS LITTLE EMPHASIS PLACED ON HIGH-QUALITY<br />

GEMSTONE FACETING. VICTOR TUZLUKOV DISCUSSES WHY<br />

THIS IS DETRIMENTAL TO THE INDUSTRY AND ITS FUTURE.<br />

oday there are not many well-faceted gemstones on the market.<br />

Aiming to obtain as great a carat yield as possible from an<br />

irregular piece of rough, using various methods to squeeze one<br />

of several classic cuts out of the gemstone while bypassing visible<br />

inclusions at the expense of symmetry, a gem-cutter aims to give<br />

a gemstone a finished look.<br />

Since each carat is real money, gem-cutters and sellers shut their eyes to optical<br />

defects. As a result, most gemstones that leave the hands of these gem-cutters<br />

have a ‘window’ in which any objects in a gemstone become visible. The area<br />

around the window looks dark, hence it reflects the surroundings, and the angle<br />

of the side facets near the girdle is too big. Such an approach to gem-cutting<br />

has become the norm.<br />

This is curious because the main task of a gem-cutter is not to make a gemstone<br />

more beautiful with a desire to save its weight but to make it heavier with a<br />

desire to save its beauty; however, the high price of gemstones is caused not<br />

just by their rarity but mainly by their beauty – a commercial component always<br />

prevails over aesthetics.<br />

PRICING SEGMENTATION OF GEMSTONES<br />

There was a time when the status of a person was characterised by the weight<br />

of gold hanging on him or her. Sometimes, even now, simple gold jewellery is<br />

sold by weight; however, wealthy people are drawn to the refinement and the<br />

originality of the design, the harmony and beauty of jewellery, the perfection<br />

and the accuracy of its craftsmanship.<br />

There are four main price categories on the market: low-quality (mass)<br />

manufacturing, high-quality (luxury) industry, famous brands and<br />

exclusive masterpieces. Prices increase by some five to 10 times from<br />

category to category.<br />

We live in interesting times; improvements in faceting equipment enable us to<br />

make a qualitative leap in gem-cutting and advance from the level of handicrafts<br />

to art. It is no secret that each step is not easy to undertake. One of the biggest<br />

obstacles is the barrier in the public consciousness. To be precise, the step from<br />

just a ‘jewellery insert’ that will vary from a brooch or a ring to the high-level<br />

term ‘gemstone’ for which the same ring will serve as a mounting underlining<br />

its beauty and magic. In other words, the most important aim of cutting is<br />

displaying the beauty of a gemstone.<br />

In Asia, we hear about names such as Nomad, Yavorsky, Leopard Gems and<br />

so on. In Europe, masters from Idar-Oberstain traditionally set the pace and<br />

they are followed in the New World by the bright masters, among whom we<br />

find John Dyer, Michael Dyber, Jeff White, Dalan Hargrave, Tomohiro Karino<br />

and Stephen Kotlowski.<br />

32 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


Brands do not appear from nothing,<br />

especially when appearing in different<br />

parts of the world simultaneously, and their<br />

appearance reflects market tendencies.<br />

In this case, we can speak about the<br />

much higher growth of prices for wellpolished<br />

gemstones in comparison with<br />

commercially-faceted gemstones. When<br />

this price difference exceeds the cost of<br />

rough losses as a result of high-quality<br />

polishing then faceting becomes profitable.<br />

All gemstone market participants know<br />

that it is becoming more difficult to sell<br />

commercially-faceted gemstones – badly<br />

polished, to put it bluntly – and often it is<br />

becoming necessary to recut ‘barrel-shaped’<br />

gemstones that have a bulgy pavilion.<br />

You may hear the following opinion: if a<br />

gemstone is precise, symmetrical, perfect,<br />

it becomes faceless and that some small<br />

defects are necessary to bring the charm of<br />

peculiarity to a gemstone. I consider that<br />

the originality of a gemstone is a<br />

combination of material, colour, clarity,<br />

size, polishing and optical characteristics…<br />

but defects? No way. It is hard to consider<br />

a face with a squinting eye or a droopy<br />

nose charming. These are excuses for those<br />

who don’t want or cannot make highquality<br />

gemstones and those for whom it is<br />

convenient to use what the market offers.<br />

ADVANTAGES OF FACETING PROPERLY<br />

No matter how convenient it is for dealers<br />

and jewellery manufacturers to use outdated<br />

standards to justify low-quality faceting,<br />

higher prices are demanded for the bestquality<br />

faceting and there are always buyers<br />

who are ready to pay more.<br />

So what is the value of high-quality cutting?<br />

First of all, high-quality gem cutting ensures<br />

the perfect flatness of facet surfaces that<br />

increase a gemstone’s ‘fire’ due to virtual<br />

prisms formed by the facets. I have actually<br />

observed good fire even in pieces of quartz<br />

if they are faceted with high quality.<br />

Fire produces inimitable sparkle – light<br />

patches of colour different from the<br />

main colour of a gemstone – and is one<br />

of the most considerable advantages of a<br />

faceted gemstone.<br />

The second advantage that is directly bound<br />

with the first one is sharp edges between<br />

facets. When edges such as a knife blade<br />

don’t reflect light, the gemstone looks ‘wet’<br />

– each facet reflects light in its own way and<br />

the shining edges don’t attract attention.<br />

Thirdly, strict symmetry makes a gemstone<br />

more harmonious and pleasant to view.<br />

One gemstone amateur expressed it thusly,<br />

“I buy beautiful gemstones to admire and<br />

enjoy them but when I notice inaccuracy<br />

instead of happy contact with the gem,<br />

I think to myself, ‘How could a negligent<br />

gem-cutter spoil such beauty?’”<br />

Fourthly, the main colour of the gemstone<br />

is better seen when there is no window in<br />

it as the background doesn’t interfere with<br />

the perception. Finally, the fifth advantage,<br />

which may influence gemmological<br />

characteristics together with the fourth one,<br />

is the absence of a grey compound of colour<br />

appearing when light diffracts on surface<br />

defects. This factor may increase visible<br />

colour saturation up to one grade on the<br />

Gemological Institute of America (GIA) scale.<br />

IMAGE COURTESY: DMITRY STOLYAREVICH<br />

IMAGE COURTESY: SERGEY PRYANECHNIKOV


The last statement needs<br />

explanation because it is<br />

very important.<br />

IP026P-9YG<br />

IP011E-9YG<br />

GENUINE<br />

CULTURED<br />

PEARLS<br />

SAMPLE OF AUTHOR’S CERTIFICATE WITH<br />

CUT GRADING BY VICTOR TUZLUKOV<br />

Polishing leaves<br />

scratches on the surface<br />

of a facet comparable<br />

with the size of used<br />

abrasive. The density<br />

of such scratches is<br />

usually high and the<br />

surface becomes<br />

‘glossy’ when light<br />

goes away from it.<br />

The explanation is<br />

partial light diffusion<br />

reflected by the uneven surface at different angles. The more the<br />

surface is uneven, the more diffusion it produces. The surface is not<br />

lit regularly under such deflection of light waves because the dark<br />

surrounding objects are visible in the light background of reflection<br />

in some microscopic areas.<br />

I used to hear, “Who needs perfect polishing and exact meeting<br />

points? Nobody will see it anyway!” This is not correct. The human<br />

eye is a perfect optical instrument that sees many details our brains<br />

don’t realise but which influence the level of sub-consciousness<br />

to create an impression. It may happen that one of two similar<br />

gemstones would not attract attention while the second is one you<br />

would like to take in your hands and never leave. This is the way we<br />

respond to a gemstone’s harmony. Harmony and its consequence –<br />

the impression – are sufficient reasons for increasing the price.<br />

IP339R<br />

IP068NSS<br />

www.ikecho.com.au<br />

BOOSTING VALUE THROUGH BETTER CERTIFICATION<br />

Let’s look at the difference that faceting can make to a gemstone’s<br />

price. At a gemstone show, one may find wonderful pieces of citrine<br />

or amethyst for just US$2-US$3 per carat. The same size, colour<br />

and clarity gemstones faceted by John Dyer, for example, will cost<br />

US$20-US$30 per carat. If the price of the first one is close to the<br />

cost of the rough gemstone then we can subtract it from the cost<br />

of the second one and get the difference. Even if half of this amount<br />

is due to the brand name then another half is the cost of work – this<br />

is neither more nor less than triple the price of the rough! Certainly,<br />

for the very expensive gemstones, the ratio will be different but the<br />

cost of faceting will depend on the price of a gemstone – it’s the<br />

charge for responsibility and the risk of dealing with an expensive,<br />

rough gemstone.<br />

Nowadays the quality of faceting is not shown in gemstone<br />

certificates. Though GIA and other gemstone laboratories have<br />

developed systems of grading cuts, they prefer not to draw attention<br />

to it as they don’t want to reduce the appeal of the gemstone to<br />

customers. As far as I know, only the IGE (Spanish Gemological<br />

Institute) states the quality of faceting in its certificates.<br />

All of us realise that the best-quality and most-expensive gemstones<br />

that usually undergo certification are faceted and that they are of<br />

much lower quality than masterpieces by real gemstone artists.<br />

It is necessary to understand the criteria for evaluating the quality of<br />

+61 2 9266 0636 +61 2 9266 0969 enquiries@ikecho.com.au


GEMSTONE FACETING<br />

faceting. I will not explain the existing cut-grading systems as readers<br />

may know them even better than me but I would like to identify<br />

the main principle common to all of them: cut-grading systems are<br />

based on comparing items with certain characteristics accepted<br />

as standard to find deviations from the norm. Such characteristics<br />

include gemstone shape, proportions, symmetry and finish. The<br />

possible variety of faceting designs provided by the shape of the<br />

crystal or the creativity of the cutter are not taken into consideration.<br />

If we speak about unique faceting designs that have nothing to<br />

do with standard forms, another approach is needed to evaluate<br />

the quality of gem cutting. Let’s look at an example to understand<br />

this better.<br />

Some readers may be already familiar with the trend of gemcutting<br />

in which I took my first steps: ‘Philosophical stone’. Its<br />

essence is developing special, unusual faceting designs followed<br />

by explanations that become the bearers of philosophical ideas,<br />

creating a row of associations in the consciousness. A gemstone<br />

contains one or several symbols in its pattern, either in graphical or<br />

numerological format. These symbols provide the ‘key’ for opening<br />

the row of associations.<br />

There is a pattern in the ‘Drop of Compassion’ gemstone (See image<br />

below). It has the shape of a wide drop limited by spirals of the<br />

golden section from both sides. At the bottom of the gemstone,<br />

there is a triangle showing the way to the infinity, a point where<br />

the selfishness of a man disappears in the Great Compassion to all<br />

beings. Rays coming from all sides to this point support the optical<br />

perspective. From above, three descending arches symbolise three<br />

stages that a man who has chosen this way should come through<br />

one by one. These stages are common for all devotees of spirit:<br />

Cognising, Renunciation and Transformation. This is the way of<br />

Christ, the way of Buddha, the way of all teachers of humanity.<br />

We can talk more about philosophy but now let’s turn to evaluation<br />

of faceting quality by the GIA grading system. Having the<br />

qualification of GG – GIA Graduate Gemologist – I’ve attempted to<br />

do this myself. There are three criteria – brilliance, proportion and<br />

finish – and everything is clear with two of them. We’ll examine<br />

the most complicated one, consisting of numerous sub-criteria<br />

(proportions). The shape of the Drop of Compassion resembles<br />

CITRINE ‘DROP OF COMPASSION’.<br />

IMAGE COURTESY: DMITRY<br />

STOLYAREVICH<br />

SAMPLE OF MARKING BY<br />

PLASMAMARK TECHNOLOGY. IMAGE<br />

COURTESY: SERGEY PRYANECHNIKOV<br />

WWW.CUDWORTHENTERPRISES.COM


GEMSTONE FACETING<br />

143 London cct.<br />

Bailey's Corner<br />

Shop 33<br />

Bailey's Arcade<br />

Canberra. ACT, 2601<br />

a pear but how many deviations has it<br />

from a standard form? Ratio length/width,<br />

absence of table facet, position of culet,<br />

wings and bulges are a few. In short, strictly<br />

following the approach of the GIA, I had<br />

to grade proportions of this gemstone as<br />

Fair. The general grade turned out to be:<br />

Excellent – Fair – Excellent. What do you<br />

think of it?<br />

When I make my author’s certification, I use<br />

another system of cut grading that I have<br />

developed myself (See sample of certificate<br />

on page 34). It does not pretend to be the<br />

worldwide standard of tomorrow but it is an<br />

attempt to eliminate limitations in the shape<br />

of the gemstone, concentrating attention on<br />

the quality of the faceting itself. This system<br />

examines the gemstone not as a whole but<br />

mostly as a complex of separate pattern<br />

points, including facets, edges and meeting<br />

points of four or more facets.<br />

It certainly takes account of any undesirable<br />

optical effects produced by the faceting,<br />

such as ‘window’ and ‘extinction’, as well as<br />

the symmetry of facets specified by the<br />

design. The result is expressed in a 100-point<br />

scale to within the fourth decimal digit.<br />

In addition to numerical grades, I have<br />

divided faceting into quality classes: 0-60 is<br />

Commercial; 60-95 is Quality; 95-100 is Elite<br />

Class. Each class is divided into three subclasses<br />

and the highest cut quality of Elite<br />

Ideal should receive a grade of more than<br />

99 points out of 100 possible.<br />

Gem cutting of the Elite Class is almost absent<br />

on the market today. Not because there is<br />

no one who buys it but because of the high<br />

price. Most markets, including jewellery,<br />

have niches for products of different price<br />

categories that may look almost the same.<br />

The compliance of a gemstone with any one<br />

quality class may be proved by traditional<br />

methods – reports and certificates – as well<br />

as uncommon ones like marking the surface<br />

of a gemstone. This technology has been<br />

developed by our specialists recently (See<br />

image on page 35). Unlike other methods<br />

such as the ForeverMark, in which a part of<br />

the surface is graphitised by the ion beam<br />

then etched to leave a relief image, particles<br />

of plasma in our technology penetrate into<br />

the surface layer of the gemstone to leave<br />

the surface undamaged. This process simply<br />

changes the optical density locally. Therefore,<br />

the reflective index is changed and the image<br />

becomes visible when the facet reflects light<br />

from an external source. The brightness of<br />

the mark depends on the plasma activity –<br />

it may vary from visible to almost invisible,<br />

meaning it can be seen only by breathing<br />

on the surface.<br />

The weak point of certification is the<br />

impossibility of proving that a certificate<br />

belongs to a certain gemstone, especially<br />

where standard cutting is concerned.<br />

Photos in the certificates are not appropriate<br />

for identification as well as to confirm<br />

dimensions and carat weight. Hence, an<br />

almost invisible mark that does not cause<br />

any damage to the gemstone and does not<br />

influence its gemmological characteristics<br />

may become the most convenient means<br />

for identification of a certified gemstone.<br />

What is left to say in conclusion? Evolution<br />

is inexorable. We may ignore its laws or even<br />

try to move against them but we won’t<br />

withstand long in the conditions of tough<br />

competitive fighting on the developing<br />

market; however, a player of foresight<br />

takes into consideration these laws and<br />

forecasts further market trends. We live in a<br />

unique time when all faceting conditions<br />

have matured. Today there are not many<br />

well-faceted gemstones on the market but<br />

tomorrow, gemstones with the highest cutquality<br />

will occupy a market niche.<br />

I dare say that those who are brave enough<br />

to pursue quality in faceting and grading<br />

will make history. i<br />

Edited from original article courtesy of InColor.<br />

VICTOR TUZLUKOV<br />

graduated from the GIA<br />

Moscow branch with<br />

a diploma of Graduate<br />

Gemologist and has been<br />

a member of the United<br />

States Faceters Guild since 2006. Tuzlukov<br />

founded the Russian Faceters Guild in 2010<br />

and he is currently engaged in the creation<br />

of new faceting designs. He also participates<br />

in national and international faceting<br />

competitions and won the International<br />

Individual Faceting Championship in Australia<br />

in 2010 with a score of 299.17 points out of 300.<br />

www.stellatimepieces.com


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Completing my Diploma in<br />

Gemmology has benefited<br />

me as a jeweller in more<br />

ways than I ever expected.<br />

I have always had an interest<br />

in gemstones and found<br />

the course was not only<br />

informative and challenging<br />

but immensely rewarding.<br />

Studying with the GAA has also<br />

allowed me to meet like-minded<br />

people from many facets of the<br />

jewellery industry and grants me access<br />

to resources that I will continue to use<br />

throughout my professional career.<br />

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<strong>Jeweller</strong>, John Miller Design - WA<br />

Diploma in<br />

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Passionately educating the industry, gem enthusiasts<br />

and consumers about gemstones


BUSINESS<br />

THE MERITS OF A MORNING MEETING<br />

Driving a team to reach a shared goal<br />

requires owners to know what they want<br />

and what they need to do to get there.<br />

DAVID BROWN explains why a daily<br />

morning staff meeting is one of the best<br />

resources to bring to a business.<br />

Morning meetings are often one of the<br />

hardest initiatives to implement. To benefit<br />

from them, managers should always plan<br />

an agenda that details the team’s objectives<br />

for the day.<br />

Stick to the plan and lead by example –<br />

be punctual, professional, enthusiastic<br />

and always follow through on any tasks.<br />

The main role of management is to coach;<br />

to encourage staff to be better today<br />

than they were yesterday. Remind them<br />

that even the best athletes have coaches.<br />

Athletes realise that the greatest threat to<br />

their success is complacency.<br />

Set the morning meeting to commence 15<br />

minutes before store opening. That sounds<br />

short but the meeting is intended to inform,<br />

enlighten and reinforce the four attributes<br />

all top salespeople need:<br />

• An outstanding attitude<br />

• A great technique<br />

• Consistent application<br />

• A love of selling<br />

It’s also a great idea to make one meeting<br />

a week light, fun and personal.<br />

TIPS FOR A BETTER MEETING<br />

1. Review and update monthly and daily<br />

budgets – the likelihood is that the team<br />

will either be ahead of budget for the<br />

month or behind.<br />

If the daily budget has just been achieved,<br />

give praise and encouragement such as,<br />

“If we could do it yesterday, we can certainly<br />

do it today. Does everyone believe that<br />

today’s budget is achievable? Are we<br />

working on any special orders that need to<br />

be followed up? What about layby payments<br />

and repairs?”<br />

If the team is ahead of budget, project<br />

what the store is on track to achieve by the<br />

end of the month and offer an extra team<br />

incentive if they reach it. For example, say,<br />

“Our budget for the month is $50,000 but<br />

THE MAIN ROLE<br />

OF MANAGEMENT<br />

IS TO COACH;<br />

TO ENCOURAGE<br />

STAFF TO BE<br />

BETTER TODAY<br />

THAN THEY WERE<br />

YESTERDAY<br />

after 10 days we’re on track to hit $60,000. If we<br />

achieve $60,000, and we know we can because<br />

we’re already doing it, there’s an extra $1,000<br />

team bonus on offer.” At a 55 per cent margin,<br />

the business is still $4,500 better off.<br />

If the team is behind budget, discuss how<br />

many sales are needed to get back on track.<br />

Knowing this amount and discussing with staff<br />

‘how’ it is going to be reached can help teams<br />

to refocus on the sales they require.<br />

Sometimes a salesperson will ask a tricky<br />

question. To keep the meeting moving forward,<br />

managers should consider firstly if the question<br />

is relevant and secondly whether they are<br />

qualified to answer it. That is, if the question<br />

points to an issue that the business hasn’t faced<br />

since 1983, refer the question to a later date.<br />

This meeting is really about daily targets.<br />

Secondly, if management doesn’t know the<br />

answer, don’t answer. Note the question for<br />

follow-up at a later date.<br />

2. Enrol the team (selling not telling) – just<br />

as staff should aim to close a sale every time<br />

they make a sales presentation, management<br />

needs to sell the team on ideas discussed<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 39


BUSINESS<br />

during meetings. Ask staff members three<br />

questions and then ask for their 100 per<br />

cent commitment and support.<br />

• Do staff agree that this is an area in which<br />

we can all improve?<br />

• Can you see that doing this consistently<br />

will help provide a better service to<br />

customers and increase sales?<br />

• Do staff consider this to be important?<br />

• Can the business rely on staff to give total<br />

support and commitment?<br />

3. Motivation and clarity – be a positive<br />

and enthusiastic manager. Be aware of good<br />

sales from the previous day and publicly<br />

praise performance. Ask for feedback on<br />

any ‘magic moments’ and then get excited<br />

by them.<br />

Ask whether anyone felt they got a sale<br />

yesterday because of a specific company<br />

policy. Get feedback on what is working and<br />

how the team can make these policies even<br />

more powerful.<br />

4. Reinforce the basics – choose a sales<br />

technique upon which to focus. Once the<br />

team has enrolled on a particular technique,<br />

follow up with them to see that they are<br />

using that technique every single time,<br />

whether they feel like it or not. Only move<br />

to the next technique when confident that<br />

the team is at this stage.<br />

Don’t forget the little things: ensure staff see<br />

customers before customers see staff; strive<br />

to create magic moments for customers;<br />

ensure customers are always right; add value<br />

to products rather than discounting prices.<br />

Always remember that 80 per cent<br />

of customers want value for money.<br />

5. Introduce product – advise the sales<br />

team of any new items that have arrived in<br />

store since the previous day’s meeting, and<br />

where they are displayed. Discuss any price<br />

changes on fast or slow sellers.<br />

6. Review future sales – review the request<br />

sheet from the previous day, which consists<br />

of all enquiries staff received that they<br />

weren’t able to close. Choose a few items<br />

from the list and discuss them.<br />

Ask questions such as, “I see we had a lady<br />

looking at a $2,000 ring yesterday who then<br />

opted to look around instead. What do you<br />

feel was the main reason she didn’t buy<br />

from us yesterday? Does anyone think there<br />

was anything we could have done, said or<br />

offered her to help her make a decision?<br />

What are we going to do differently today<br />

as a result of what we learned yesterday?”<br />

The main reasons customers walk out<br />

without buying are usually because<br />

jewellers don’t have the right products,<br />

because customers want to shop around,<br />

because customers want to talk to their<br />

partners first or because customers don’t<br />

feel the item represents value for money.<br />

Discuss with staff what can be done to<br />

overcome these objections.<br />

7. Discuss the average sale – is the average<br />

sale for the month up or down from the<br />

budgeted average sale value? Why do staff<br />

feel this is happening? Does the team need<br />

to push higher-priced product to boost the<br />

sales average?<br />

If so, urge the team to concentrate on this<br />

by showing customers the best items in<br />

store first. Remind the team that addedvalue<br />

services are there to help. Is there<br />

anything staff can do to increase the<br />

average sale?<br />

8. Review old stock – choose an item of old<br />

product in each category, such as diamond<br />

rings, silver bracelets, gem-set rings or<br />

watches, and discuss with staff during one<br />

meeting a month why these items haven’t<br />

sold? Is there something staff can do<br />

with the items that will make them more<br />

saleable? Perhaps make it a lower setting or<br />

add a shoulder diamond to a ring to give it<br />

more appeal?<br />

For the next week, insist that every<br />

customer who comes in looking for a gold<br />

chain should be shown old stock first.<br />

Remind the team that a business can’t get<br />

new stock until old stock has sold. If this<br />

means providing a discount or meeting a<br />

customer’s price point then this might be<br />

acceptable but remind staff to discount only<br />

as a last resort.<br />

Remember to follow up by asking, “How<br />

many times did we show these items<br />

yesterday and what was the feedback?”<br />

9. Show attention to detail – a retail<br />

jewellery store is as prestigious as a five-star<br />

hotel in that shoppers expect the best. It’s a<br />

luxury shopping experience after all so staff<br />

OVERCOME THIS<br />

BY APPLYING THE<br />

MEETING ONLY<br />

TO THOSE WHO<br />

ARE WORKING<br />

ON THAT DAY<br />

AND KEEP<br />

MINUTES FOR<br />

ABSENT STAFF<br />

should be friendlier, the store should<br />

be cleaner and the product should be better<br />

than competing jewellery stores.<br />

Managers should encourage the team<br />

to display extremely high standards. This<br />

includes paying strict attention to dress<br />

standards, store cleanliness, carpets, signs,<br />

lighting and all other factors that make up<br />

first impressions. During slow times, invite<br />

team members to enter the store with ‘fresh<br />

eyes’ as a customer would. Allow them to be<br />

critical. Do they think the store measures up?<br />

Does all stock have a clean, easy-to-read<br />

ticket? Is the inventory itself clean and well<br />

lit, displayed straight in cabinets? Do staff<br />

have name badges? Do they need them?<br />

What music is playing? Is the in-store<br />

ambience perfect?<br />

10. General business – at the conclusion of<br />

each daily meeting, allocate time to deal<br />

with other general matters such as repairs<br />

and rosters.<br />

11. Manage the process – be sure to keep<br />

control of the meeting and stay focused on<br />

one issue at a time. The goal is to inform and<br />

motivate so be well prepared and don’t go<br />

over the allotted time.<br />

One of the biggest reasons managers don’t<br />

hold morning meetings is because staff<br />

often start at different times and on different<br />

days. Overcome this by applying the<br />

meeting only to those who are working on<br />

that day and keep minutes for absent staff<br />

to review and discuss as soon as they return<br />

to work.<br />

Even if only 50 per cent of staff are present,<br />

the team will benefit from the meetings.<br />

Bigger issues can be addressed in monthly<br />

meetings that all staff attend.<br />

Don’t let barriers be an excuse. Initiate<br />

regular morning meetings today. Those<br />

who have done it can testify to the benefits<br />

and it’s a habit that managers are likely to<br />

continue once initiated. i<br />

DAVID BROWN is<br />

co-founder and business<br />

mentor of Retail Edge<br />

Consultants. Learn more:<br />

retailedgeconsultants.com<br />

40 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


SELLING<br />

SELLING WHAT’S IN STOCK… OR NOT.<br />

SHOWING PRODUCT THAT ISN’T IN STOCK IS A QUICK WAY TO DISAPPOINT CUSTOMERS; HOWEVER,<br />

DOUG FLEENER SAYS IT CAN STILL BE DONE AS LONG AS SALESPEOPLE APPROACH IT IN THE RIGHT WAY.<br />

A salesperson recently asked me if selling<br />

only what the store has in stock is good<br />

service. When I asked for details, she<br />

elaborated that her manager had instructed<br />

staff that they were only to show and sell<br />

what was in the showcases and in stock.<br />

Some staff members disagreed with this<br />

policy, since the best product for the<br />

customer might be something that’s not<br />

in stock at that moment. The salesperson<br />

asked me who I thought was right.<br />

I said the manager is right; however, the<br />

staff weren’t necessarily wrong.<br />

While I do love taking both sides of an<br />

argument, there’s a reason both parties<br />

are right and wrong.<br />

OVER PROMISE, UNDER DELIVER<br />

Quick story first: while travelling some<br />

time ago, I stopped for dinner at a local<br />

restaurant where I saw homemade chicken<br />

potpie on the menu. Since that isn’t<br />

something I often see on a menu, I asked<br />

the waitress about the dish when she came<br />

to take my order.<br />

The waitress told me that the restaurant is<br />

known for its chicken potpies, which are<br />

made fresh daily, and that it is her favourite<br />

item on the menu. By then my mouth was<br />

watering so I ordered the chicken potpie<br />

with a side salad. You know what’s coming<br />

next, don’t you?<br />

Alas, the waitress then said, “I’m sorry but<br />

we’re sold out.” So here we have a waitress<br />

who had gotten a customer all excited<br />

about a dish, effectively selling it, only to<br />

then tell that customer he couldn’t have it.<br />

Talk about disappointing!<br />

This is a classic case of over-promising and<br />

under-delivering.<br />

IT HAPPENS IN RETAIL TOO<br />

The same thing often happens in retail<br />

stores when a salesperson gets customers<br />

all excited about a product only to tell them<br />

ALWAYS TELL A<br />

CUSTOMER WHEN<br />

THEY CAN PURCHASE<br />

AN OUT-OF-STOCK<br />

PRODUCT BEFORE<br />

YOU SHOW IT.<br />

THIS REDUCES<br />

DISAPPOINTMENT<br />

OUT-OF-STOCK PRODUCT – TO SHOW OR NOT?<br />

that the item is out of stock. It’s a practice<br />

that disappoints the customers and often<br />

results in missed sales opportunities.<br />

This is especially so in the digital age,<br />

known for the Millennial culture of<br />

immediacy. The Millennials have never<br />

known a world without the internet and<br />

they expect to have access to products and<br />

services 24-hours-a-day.<br />

Most of all, they believe it is their right to<br />

have what they want whenever they want<br />

and delivered the way they want it.<br />

Of course, there are always exceptions.<br />

What if the item in question is a new<br />

product or a hot seller and a store is only<br />

temporarily out-of-stock?<br />

Is it wrong to show the customer a product<br />

even though the customer can’t buy it right<br />

now? Not at all, especially if it’s done in a<br />

way that doesn’t disappoint the customer<br />

and the customer is given an opportunity<br />

to make a purchase.<br />

OUT-OF-STOCK SELLING<br />

Here are a few things to remember about<br />

showing and selling out-of-stock products:<br />

• Only show an out-of-stock product if you<br />

know it meets your customer’s needs or if<br />

he or she specifically asks for it. Something<br />

might be new or a hot seller but this<br />

doesn’t mean it’s the right product for<br />

everybody. Too often a staff member<br />

shows an out-of-stock product because<br />

it is new or they like it. Focus on what’s<br />

best for the customer.<br />

• Always tell a customer when they can<br />

purchase an out-of-stock product before<br />

you show it. This reduces disappointment.<br />

It also makes it easier to show another<br />

product or sell the out-of-stock item.<br />

One way to suggest this may be to<br />

say, “You might really like the new XYZ<br />

silver ring, which we’ll have in stock on<br />

Thursday. Let me show it to you.”<br />

• Recommend other products based on<br />

what customers like or dislike about the<br />

unavailable product – “Take a look at this<br />

ABC silver ring. It’s got many of the same<br />

features as the item you want and also<br />

has that modern style you like.”<br />

• Make purchasing out-of-stock products<br />

a great experience for customers – don’t<br />

tell them to check back next week; don’t<br />

charge for shipping; do the little things<br />

that ease a customer’s inconvenience<br />

when the right product is not in stock.<br />

• If your customer absolutely needs that<br />

product now, find it somewhere else.<br />

By doing this, you might keep the<br />

customer in the future even when losing<br />

a sale.<br />

Deciding whether to show products that<br />

are not in stock, or to not show them at<br />

all, requires a delicate balance but retailers<br />

who remember to always do what’s best<br />

for their customers will always do best for<br />

their stores. i<br />

DOUG FLEENER is<br />

president and managing<br />

partner of Sixth Star<br />

Consulting. Learn more:<br />

dougfleener.com<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 41


MANAGEMENT<br />

BUSINESS ADVICE THAT RARELY WORKS<br />

BUSINESSES SEARCHING FOR A WAY TO IMPROVE PROFITABILITY AND PERFORMANCE MUST CONSIDER MANY STRATEGIES,<br />

NOT ALL OF WHICH ARE GOING TO WORK. DAVID SHARPE REPORTS ON THE REALITIES OF SOME POPULAR BUSINESS ADVICE.<br />

There’s no shortage of people who will give<br />

you advice on how to run your business.<br />

There are coaches, mentors and strategists<br />

galore, all ready to offer their own ideas on<br />

business success. Talk is cheap, however, and<br />

even the best ideas can be difficult to put<br />

into action without the right resources. What<br />

can retailers do when it comes to introducing<br />

new strategies?<br />

Here are five examples of business advice<br />

that are easy to spout but not so easy to do.<br />

WRITE A BUSINESS PLAN<br />

Everyone says a business needs a business<br />

plan. Does it? Why exactly? Is it really<br />

worthwhile paying a consultant to write a<br />

detailed, 30-page plan so that it can sit in<br />

the top drawer?<br />

Two things are often forgotten about<br />

business plans. Firstly, for them to be<br />

effective they need a clear purpose, and<br />

secondly, to achieve that purpose, they<br />

need to be targeted to a distinct audience.<br />

If a business plan is required to attract an<br />

investor then the purpose and audience is<br />

clear but when it comes to the everyday<br />

running of a business, retailers probably<br />

don’t need to spend time and money<br />

writing a plan. Don’t misunderstand this as<br />

a suggestion that businesses don’t need<br />

to plan; planning is essential. Businesses<br />

just don’t need to do it by writing a big ol’<br />

document that no one will read.<br />

INTRODUCE A REBRAND<br />

Marketing consultants are notorious for<br />

saying businesses should rebrand to increase<br />

business. Marketing agencies love a rebrand<br />

or a brand refresh, complete with new logo<br />

and new website – that’s their business!<br />

Rebranding can certainly give a business a<br />

new look that attracts attention but does this<br />

increase sales? Only if it’s backed up by<br />

a rigorous sales regime.<br />

Sales is mainly about the hard slog of<br />

communicating with people who aren’t<br />

THE IDEA THAT<br />

THERE’S A SPECIFIC<br />

PROCESS, ONE WAY<br />

OF THINKING OR<br />

A SINGLE PRICING<br />

STRATEGY THAT<br />

WILL MAKE<br />

EVERYTHING WORK<br />

IS AN IDEA DESIGNED<br />

TO SELL BOOKS<br />

NOT ALL ADVICE MAY BE APPROPRIATE<br />

already customers. A new website can help<br />

but it doesn’t actually pick up the phone<br />

and talk to prospects, does it? Marketing<br />

and sales are different functions.<br />

BUILD CULTURE<br />

Another buzz term is ‘workplace culture’.<br />

Developing a co-operative and pleasant<br />

workplace culture, one that respects<br />

flexible ways of working and embraces<br />

co-operation, is de rigeur – everyone is<br />

trying to do it.<br />

That’s great; however, if every company has<br />

a great workplace culture then culture is no<br />

longer a differentiator for candidates. It just<br />

becomes one more factor for an employee<br />

to weigh up, no more important than salary<br />

levels, location or career prospects.<br />

In practice, businesses cannot rely on<br />

workplace culture alone to lure employees.<br />

There’s no substitute for making staff feel<br />

valued and well rewarded and no amount<br />

of casual-clothes days and free massages<br />

will replace that.<br />

BECOME A THOUGHT LEADER<br />

This one is a classic – businesses should<br />

position themselves as thought leaders<br />

in their industries but that’s easier said<br />

than done. The theory behind this is that<br />

businesses will increase their brand value<br />

if they become authorities, thus increasing<br />

their profiles and getting people interested<br />

in what they have to say.<br />

Authorities become destination businesses<br />

who can possibly even charge above the<br />

market rate for services because they’ve<br />

become premium brands.<br />

The trouble is that becoming a thought<br />

leader means creating content – lots<br />

of compelling content – regularly and<br />

consistently. It also means searching for<br />

self-promotion opportunities and that’s<br />

not for everyone. Retailers can do all of that,<br />

spending a lot of time and energy, and it<br />

still might not achieve the desired goal.<br />

Striving to be a thought leader may work<br />

for some retailers but they have to be aware<br />

of how much time, money and resources<br />

is required to get there. This time might be<br />

better spent delivering an excellent product<br />

to customers and boosting service levels.<br />

THE ‘ONE TRUE WAY’<br />

How many times have you heard, “There’s<br />

one sure-fire way to business success and<br />

this is it”? The idea that there’s a specific<br />

process, one way of thinking or a single<br />

pricing strategy that will make everything<br />

work is an idea designed to sell books.<br />

Practically speaking, business rarely works<br />

that way. Some strategies will work for some<br />

people and some strategies won’t. There’s<br />

never a one-size-fits-all solution, nor is there<br />

a fast answer.<br />

Retailers who try different strategies and<br />

measure the results should be able to plot<br />

a path that brings slow, incremental growth<br />

and it is steady growth that is much more<br />

likely to last into the long term. i<br />

DAVID SHARPE is advisory<br />

and consulting director at<br />

Generate, which specialises<br />

in creative industries. Learn<br />

more: generate.com.au<br />

42 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


MARKETING & PR<br />

WAGING WAR: MARKETING VS SALES<br />

SHOULD MARKETING BE LESS OF A FOCUS THAN SALES OR ARE THEY EQUALLY IMPORTANT TO RETAIL BUSINESSES?<br />

DALE FURTWENGLER DISCUSSES THE RELATIONSHIP BETWEEN THE TWO AND IF A PEACE TREATY CAN BE MADE.<br />

Over the years I’ve heard much commentary<br />

about the roles of marketing and sales<br />

within business. Popular sales writer Geoffrey<br />

James has written that marketing should be<br />

subordinate to sales instead of a separate<br />

function. Obviously, marketing experts<br />

disagree. War is expensive; let’s see if we<br />

can put an end to this one.<br />

THE ROLE OF MARKETING<br />

In many businesses, marketing’s role is to<br />

get the word out about the store, attracting<br />

new customers by creating front-of-mind<br />

awareness and a buzz for new offerings. Yet<br />

a simple review of profitability by customer<br />

shows that a firm strategy is required to<br />

ensure businesses see returns on their<br />

marketing expenditure. Consider the various<br />

products and services that businesses offer.<br />

Often businesses contribute their largest<br />

marketing investments – both in dollars<br />

and production capacity – towards their<br />

least profitable lines. This raises some<br />

important questions:<br />

• Are the right customers being targeted?<br />

• Are businesses touting the right offerings?<br />

• If so, how is it that retailers end up with so<br />

many low-margin customers and offerings?<br />

Market research is another role of marketing.<br />

Product innovations and improvements are<br />

often supported by, if not initiated through,<br />

research conducted by the marketing group.<br />

The question is: should this be marketing’s<br />

province exclusively?<br />

THE ROLE OF SALES<br />

The role of sales staff is, simplistically, to<br />

generate sales. Unfortunately, too many<br />

retailers operate from this very view, and,<br />

when asked, salespeople can rarely identify<br />

their ideal customers, what those customers<br />

value and what that value is worth in<br />

monetary terms.<br />

To make matters worse, the current models<br />

for sales budgeting and commission<br />

encourage sales staff to relentlessly pursue<br />

customers and to do anything they can<br />

WHEN MARKETING<br />

AND SALES ARE<br />

BOTH TARGETING<br />

THE SAME HIGHLY<br />

PROFITABLE PEOPLE<br />

AND CATEGORIES,<br />

A BUSINESS WILL<br />

GENERATE HIGHER<br />

REVENUES MORE<br />

QUICKLY AND AT<br />

PREMIUM PRICES<br />

THERE’S WEIGHT IN MARKETING AND SALES<br />

to make the sale. This occurs whether the<br />

business’ marketing is targeting the right<br />

markets or not. How can retailers stop this<br />

madness? Here are some thoughts.<br />

CROSS POLLINATION<br />

In small businesses like jewellery stores, staff<br />

often handle both marketing and sales but<br />

it’s rare that someone analyses profitability<br />

by both customer and product line/service<br />

categories. A caveat here – storeowners<br />

often calculate profit in ways that make<br />

it easy for them to report financial results<br />

under external reporting requirements.<br />

Marketing and sales people should both<br />

make sure they are comfortable that profit<br />

numbers reflect the economics of the<br />

various markets they serve.<br />

There are a few fundamentals to consider:<br />

• Why are some customers paying more for<br />

an offering?<br />

• What do they see that other customers<br />

do not?<br />

• Are the marketing messages designed to<br />

attract more of these customers?<br />

• How can this information help salespeople<br />

focus their efforts toward this market?<br />

• How can staff make marketing messages<br />

and sales scripts more congruent to<br />

increase the likelihood of sales?<br />

• What opportunities are staff seeing in<br />

the market for innovation and/or<br />

product improvement?<br />

• Are these opportunities something for<br />

which buyers are willing to pay extra?<br />

• Which offerings are languishing? Should<br />

they be invigorated or abandoned?<br />

Customers will always have stronger rapport<br />

with sales staff than with marketing staff.<br />

Sales staff have access to the shop floor<br />

to see first-hand how customers react to<br />

products. They also get the opportunity<br />

to have more candid exchanges with<br />

customers than back-office staff can have.<br />

These observations can be extremely<br />

valuable for improving their sales approach<br />

in ways that customers value.<br />

Don’t believe it? Ponder these questions:<br />

• Aren’t customers more likely to offer<br />

feedback to salespeople they like?<br />

• Aren’t salespeople more likely to<br />

share trends that they see in their<br />

customers’ preferences?<br />

• Aren’t customers more likely to let<br />

salespeople they like know when a<br />

competitor is about to release a product<br />

of value?<br />

Salespeople should be encouraged to share<br />

any language they’re using that helps close<br />

a sale or establish a relationship. Likewise,<br />

salespeople should also be encouraged to<br />

share complaints.<br />

All of this information can help shape<br />

a retailer’s marketing messages so that<br />

they resonate with their most profitable<br />

customers. When marketing and sales are<br />

both targeting the same highly profitable<br />

people and categories, a business will<br />

generate higher revenues more quickly<br />

and at premium prices. Now, how’s that<br />

for a peace treaty? i<br />

DALE FURTWENGLER is<br />

founder of Furtwengler &<br />

Associates. He is a speaker,<br />

author and consultant. Learn<br />

more: pricingforprofitbook.com<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 43


LOGGED ON<br />

TOOLS TO EASE THE CHRISTMAS RUSH<br />

THE FESTIVE SEASON IS CHAOTIC BUT THERE IS A PLETHORA OF DIGITAL STAFF COLLABORATION TOOLS TO HELP<br />

BUSINESSES STAY ORGANISED AND RUNNING SMOOTHLY THIS CHRISTMAS. LILIAN SUE REPORTS.<br />

Christmas can be a mad scramble. Every year,<br />

businesses must hire extra staff, order more<br />

inventory and ensure that each customer<br />

goes home with the perfect gift.<br />

Not only is finding staff an issue but new<br />

staff must be trained on the store systems<br />

and briefed with adequate knowledge of<br />

the products available on the shop floor.<br />

It all takes time, which is one commodity<br />

retailers rarely have during this period.<br />

That’s where software can assist, by allowing<br />

owners and managers to gain more time for<br />

their business without sacrificing productivity<br />

or profit during the busiest shopping season<br />

of the year.<br />

Online team collaboration tools help staff<br />

stay organised and well trained while they<br />

are contributing to increased business<br />

productivity. Here are three free, digital,<br />

team-collaboration-and-organisation tools<br />

that are efficient, easy to use and sure to<br />

give business owners and managers muchneeded<br />

time and breathing room during<br />

the festive season.<br />

ON THE SAME PAGE<br />

With a cloud-based collaboration platform<br />

like Same Page, business owners can sign<br />

up for free and log into their team account<br />

on their phones, laptops or tablets, increasing<br />

organisational efficiency.<br />

‘Team owners’ can directly message staff, post<br />

in team chat windows and even use video<br />

calling to host remote conferences with staff<br />

members to assist businesses with stores<br />

situated in different locations.<br />

Staff who are added as team members can<br />

easily upload diagrams and charts that show<br />

sales progress and even upload videos and<br />

photos of new jewellery and watches on<br />

the team page. Tasks can be given due<br />

dates and reminders can be assigned to<br />

relevant members, while the team task list<br />

can filter duties accordingly so they can be<br />

evenly distributed.<br />

Staff members are able to keep track of their<br />

progress with the official task tracker and<br />

calendars – both team and individual – are<br />

available so everyone is aware of deadlines,<br />

meetings and special events.<br />

HELLO, TRELLO<br />

Unique to Trello, the platform uses a cardbased<br />

system to make project management<br />

as simple as possible. Customised columns<br />

such as ‘in progress’ and ‘completed’ can be<br />

easily created on a project board to organise<br />

individual tasks. Each task is added to a<br />

column as a small card that lists individual<br />

tasks that can be assigned to different staff<br />

members. Space exists to add comments<br />

and an official deadline.<br />

Once a manager signs up for free, each<br />

team member is able to add checklists and<br />

attachments from other platforms such as<br />

Dropbox or GoogleDrive. They can also create<br />

more than one board for each project.<br />

Checklists make it easier to track progress<br />

as tasks can be crossed off once they’re<br />

completed. Each project board is also eligible<br />

for one ‘power-up’, a choice of specialised<br />

extras that have features such as allowing<br />

team members to see the tasks that haven’t<br />

received attention in more than a week,<br />

add video meetings, edit their e-newsletter<br />

campaigns or attach company surveys for<br />

other staff to complete.<br />

Trello is compatible with Mac and PC<br />

computers as well as Apple and Android<br />

mobile products.<br />

STRESS-FREE FREEDCAMP<br />

Freedcamp prides itself on being an all-inone<br />

solution for team collaboration and<br />

organisation. Business owners can have<br />

discussions with their staff in one place<br />

instead of dealing with scattered email<br />

threads and staff members can organise files<br />

in a state-of-the-art file system, backing up all<br />

information offline. Managers can also control<br />

staff rosters, tracking time on multiple staff<br />

members across multiple days.<br />

TEAM COLLABORATION TOOLS CAN REDUCE STRESS AT CHRISTMAS<br />

ONLINE TEAM<br />

COLLABORATION<br />

TOOLS HELP<br />

STAFF STAY<br />

ORGANISED AND<br />

WELL TRAINED<br />

WHILE THEY ARE<br />

CONTRIBUTING<br />

TO INCREASED<br />

BUSINESS<br />

PRODUCTIVITY<br />

Freedcamp gives staff members the option<br />

to assign tasks and set a goal by a certain date,<br />

notifying the team with progress updates as<br />

the goal moves closer as well. The software<br />

allows retailers to duplicate project templates,<br />

which increases productivity and eliminates<br />

the need to spend time and energy recreating<br />

homogenous project types.<br />

Freedcamp has unlimited storage and allows<br />

for unlimited projects. Business owners and<br />

team members can take the tool on the go<br />

through the iOS app on Apple products.<br />

With the right team collaboration and<br />

organisation tools, retailers can better manage<br />

staff tasks. The aim is to avoid drop-offs in<br />

productivity by allowing staff members to<br />

spend time on what matters: keeping their<br />

customers happy during the holiday rush and<br />

expanding business.<br />

Investing a little time and energy in the short<br />

term to find the best team collaboration tools<br />

will pay dividends in the long term and ensure<br />

the holiday rush is smoother and far jollier. i<br />

LILIAN SUE is a social media<br />

and PR strategist. She operates<br />

In Retrospect Writing Services.<br />

Learn more: inretrospect21.<br />

wordpress.com<br />

44 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


GEMS<br />

COLOUR INVESTIGATION: ZIRCON<br />

zircon’s array of colours actually results from<br />

external influence rather than from its own<br />

chemical composition.<br />

The specific cause of colour in zircon remains<br />

hotly debated and there are two popular<br />

theories in discussion: one side proposes<br />

that the presence of tetragonal centres of<br />

trivalent rare earth elements and niobium<br />

are the cause of colour; another theory<br />

suggests atomic defect centres (colour<br />

centres) created during the various stages<br />

of radioactive breakdown are what affects<br />

the absorption of colour in a zircon crystal.<br />

Although the beautiful and attractive<br />

earth tones of natural zircon occur more<br />

commonly, this gemstone is especially<br />

admired for its vivid-blue colours. Because<br />

of this high demand, vivid-blue gemstones<br />

usually command a higher price than other<br />

coloured varieties of zircon.<br />

Zircon is a mineral with certain optical<br />

properties that can rival those of a<br />

diamond. Found in a varied palette,<br />

the cause of colour in this gemstone is<br />

little known. STACEY LIM discusses two<br />

popular theories.<br />

Recognised as one of the birthstones for<br />

<strong>December</strong>, zircon is an important mineral<br />

with the oldest-known crystal grains found<br />

in Western Australia and dating back 4.4<br />

billion years.<br />

The high lustre and brilliance of colourless<br />

zircon is likened to that of diamond and<br />

gemstones have often been presented as<br />

imitation diamonds, especially in jewellery<br />

of the early 1900s.<br />

Today the popularity of zircon is somewhat<br />

diminished by its reputation as an<br />

inexpensive diamond simulant although it<br />

remains a favourite among collectors and<br />

informed consumers.<br />

Zircon is a zirconium silicate containing<br />

minute traces of radioactive elements<br />

like uranium and thorium, and rare earth<br />

elements. Because of its radioactive<br />

impurities, zircon’s crystal structure can be<br />

almost completely broken down over long<br />

periods of geological time. It is therefore<br />

said to be metamict.<br />

Zircon that has retained its original crystal<br />

structure is referred to as high zircon, and<br />

low zircon is metamict type. The low type<br />

is generally green but may also be brown,<br />

orange or yellow.<br />

High type zircons occur in a wider array of<br />

colours – yellow, orange, green, pink, red,<br />

reddish brown and blue hues – and are<br />

the gemstones typically seen in jewellery.<br />

Gemstones are mostly fashioned into round<br />

brilliant cuts to take advantage of their lustre<br />

and fire.<br />

Classified as an allochromatic gemstone,<br />

THE SPECIFIC<br />

CAUSE OF<br />

COLOUR IN<br />

ZIRCON REMAINS<br />

HOTLY DEBATED<br />

AND THERE ARE<br />

TWO POPULAR<br />

THEORIES IN<br />

DISCUSSION<br />

This piercing blue is achieved almost<br />

exclusively through heat treatment and<br />

may be slightly greenish-blue, greenish-blue<br />

or very strongly greenish-blue. The treatment<br />

is undetectable, stable and can be assumed<br />

for all blue zircons.<br />

Even though the demand for blue<br />

gemstones can be satisfied with other<br />

gemstones of comparable clarity at more<br />

affordable prices, zircon’s intense fire,<br />

high lustre and unique blue colour means<br />

it continues to reign supreme among<br />

gemstone buyers.<br />

Zircon’s unusual blue hue paired with its<br />

lustre and fire makes this gemstone an<br />

exceptional blue gemstone alternative. i<br />

STACEY LIM FGAA BA Design, is a qualified<br />

gemmologist and gemmology teacher/assistant.<br />

She is a jewellery designer, marketing manager<br />

and passionate communicator on gemmology.<br />

For information on gemstones, visit: gem.org.au<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 45


10 YEARS AGO<br />

WHAT WAS MAKING NEWS 10 YEARS AGO?<br />

A SNAPSHOT OF THE INDUSTRY EVENTS THAT MADE NEWS HEADLINES IN THE DECEMBER 2007 ISSUE OF JEWELLER.<br />

+ FUN FACT: THE ENTIRE DECEMBER 2007<br />

ISSUE WAS PRINTED IN BLACK AND WHITE.<br />

Pandora turns 25 and opens flagship store<br />

The story: While celebrating its 25th anniversary,<br />

Pandora Jewelry has opened its first Australian flagship<br />

store in Sydney.<br />

Located in the Queen Victoria Building, the store offers<br />

the full range of Pandora products, including its wildly<br />

successful charm bracelets.<br />

Hosted by the Danish Consulate, the store was<br />

inaugurated on October 31, with the Sydney Jazz<br />

Collective providing entertainment while models<br />

‘Blood rubies’<br />

boycotted<br />

The story: Following political upheaval in<br />

Myanmar, several high-profile international<br />

jewellery organisations and retailers have<br />

publicised their opposition to the purchase<br />

of Burmese gemstones. The JAA, CIBJO (the<br />

World <strong>Jeweller</strong>y Council), the International<br />

Colored Gemstone Association (ICA) and<br />

Jewelers of America (JA) have all issued<br />

statements urging members to seek<br />

written assurances from suppliers on<br />

the origins of the gems they receive and<br />

advise them to refrain from purchasing any<br />

Burmese gemstones until the process of<br />

democratic reform begins in Burma.<br />

paraded Pandora Jewelry<br />

and couture gowns. Guests<br />

were invited to preview the<br />

limited edition Anniversary<br />

Collection – each piece<br />

in the 14-carat gold ring,<br />

earring, necklace and charm<br />

suite is embellished with<br />

.25-carats of diamonds to<br />

mark the quarter-century milestone.<br />

Mobile phone jewellery designed for charity<br />

The story: <strong>Jeweller</strong> Nic Cerrone has connected<br />

with MobileMuster – the official recycling program<br />

of the mobile phone industry – to create a limitededition<br />

jewellery range from recycled mobile<br />

phone components.<br />

The men’s ring, cufflinks and necklace and women’s<br />

necklace, bracelet and earrings comprising the range<br />

contain gold yielded from 8,700 recycled mobile<br />

phones. The pieces also contain silver and copper.<br />

“Over 90 per cent of<br />

mobile phone materials are<br />

recoverable,” said Rose Read,<br />

manager, MobileMuster.<br />

Cerrone’s pieces were<br />

auctioned online from<br />

October 28 to November 12<br />

and all funds were donated<br />

to Landcare Australia.<br />

PRE-APPRENTICESHIP<br />

COURSE LAUNCHED<br />

The story: Brisbane’s Southbank<br />

Institute of Technology has launched<br />

a pre-apprenticeship short course in<br />

jewellery manufacturing designed<br />

to help the trade select suitable<br />

apprentice applicants.<br />

Implemented in response to industry<br />

requests, the course addresses a lack<br />

of public knowledge about careers<br />

paths in the industry and a shortage of<br />

trade-accredited jewellers/goldsmiths<br />

in Australia.<br />

“The course aims to give insight into<br />

a career in jewellery manufacturing,”<br />

said teacher Lee Pownall. “It allows the<br />

student to explore their aptitude and<br />

abilities for the design and creation of<br />

jewellery items.”<br />

The program is aimed at anyone<br />

interested in a career in the industry<br />

with no prior experience or knowledge.<br />

INDUSTRY NIGHT<br />

EXPERIENCES SUCCESS<br />

The story: A recent industry dinner<br />

dance has successfully reinvigorated<br />

a dialogue between various industry<br />

groups – including the <strong>Jeweller</strong>s<br />

Association of Australia (JAA),<br />

Gemmological Association of Australia<br />

(GAA) and National Council of <strong>Jeweller</strong>y<br />

Valuers (NCJV).<br />

Held on September 22 in Victoria, the<br />

event raised over $3,000 for the Make<br />

a Wish Foundation through an auction<br />

of donated jewellery and gemstone<br />

items. Importantly, it also presented a<br />

forum for communication between the<br />

industry groups. “It was acknowledged<br />

that we are all ‘in the same boat’,” coorganiser<br />

Leon Corn said, “and that we<br />

should try to pull in the same direction.”<br />

46 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


CALENDAR<br />

2018 TRADE SHOW CALENDAR<br />

NEXT YEAR’S TRADE FAIR CALENDAR IS QUICKLY FILLING UP AND JEWELLERS WOULD BE WISE TO START PLANNING.<br />

HERE IS A GUIDE TO SOME OF THE HOTTEST SHOWS TAKING PLACE LOCALLY AND INTERNATIONALLY IN 2018.<br />

TUCSON GEM,<br />

MINERAL & FOSSIL<br />

SHOWCASE<br />

January 27 – February 11<br />

Tucson, US<br />

Visit: visittucson.org/events/gem-show<br />

Described as the largest gemstone and<br />

mineral event of its kind in the world, the<br />

Tucson Gem, Mineral and Fossil Showcase<br />

is known for its museum-quality exhibits of<br />

gemstones, jewellery, minerals and fossils.<br />

BANGKOK GEMS &<br />

JEWELRY FAIR<br />

February 21–25<br />

Bangkok, Thailand<br />

Visit: bkkgems.com<br />

The biannual Bangkok Gems & Jewelry<br />

Fair has developed a reputation for being<br />

a treasure trove of coloured gemstones –<br />

many of which are supplied by local dealers.<br />

A second show in 2018 will take place in<br />

September, with dates to be announced.<br />

HONG KONG<br />

INTERNATIONAL<br />

JEWELLERY SHOW<br />

March 1–5<br />

Hong Kong<br />

Visit: m.hktdc.com/fairmob/hkjewellery-en<br />

Organised by the Hong Kong Trade<br />

Development Council, this fair focuses on<br />

finished jewellery. Next year will mark the<br />

35th edition of the trade show.<br />

BASELWORLD<br />

March 22–27<br />

Basel, Switzerland<br />

Visit: baselworld.com<br />

Baselworld is billed as the world’s<br />

largest watch and jewellery fair,<br />

attracting more than 106,000 visitors<br />

and 1,300 exhibitors in <strong>2017</strong>.<br />

The show has been shortened in<br />

2018, running for six days instead<br />

of the traditional eight days.<br />

JCK LAS VEGAS<br />

June 1–4<br />

Las Vegas, US<br />

Visit: lasvegas.jckonline.com<br />

This jewellery trade show appears to be<br />

increasing in size each year and, in addition<br />

to having a vast array of products on display,<br />

it also features several education sessions<br />

conducted by industry organisations like<br />

De Beers Group and the GIA.<br />

INDIA INTERNATIONAL<br />

JEWELLERY SHOW<br />

Date to be confirmed<br />

Mumbai, India<br />

Visit: iijs.org<br />

This year’s event is said to have attracted<br />

more than 2,200 exhibitors showcasing<br />

loose diamonds and gemstones as well<br />

as finished jewellery. The fair is organised<br />

by the Gem & <strong>Jeweller</strong>y Export Promotion<br />

Council (GJEPC) and traditionally takes<br />

place in late July.<br />

HONG KONG<br />

JEWELLERY &<br />

GEM FAIR<br />

Sept 12–16 and Sept 14–18<br />

Hong Kong<br />

Visit: exhibitions.jewellerynetasia.com/9jg<br />

The first part of the show, held from<br />

September 12–16, features loose diamonds,<br />

gemstones and pearls. The second, held<br />

from September 14–18, is for finished<br />

jewellery, packaging, tools and equipment.<br />

*Dates were correct at the time of publication<br />

25<br />

AUGUST<br />

20<br />

JUNE<br />

INTERNATIONAL JEWELLERY FAIR<br />

August 25–27<br />

Sydney, Australia<br />

Visit: jewelleryfair.com.au/2018<br />

Following the success of the IJF’s return<br />

to Darling Harbour this year, the 2018<br />

fair will again head to the International<br />

Convention Centre Sydney. Organised<br />

by Expertise Events, the IJF has<br />

cemented itself as an important event<br />

on the local industry’s calendar.<br />

<strong>December</strong> <strong>2017</strong> <strong>Jeweller</strong> 47


MY BENCH<br />

Dan Shadwick<br />

WORKS AT:<br />

Shadwick’s Fine <strong>Jeweller</strong>y<br />

AGE: 43<br />

YEARS IN TRADE: 26<br />

TRAINING: Apprenticeship<br />

in manufacturing jewellery<br />

and diamond setting<br />

FIRST JOB: Wensley’s<br />

Goldsmiths of Fremantle,<br />

under Bob Shadwick<br />

OTHER QUALIFICATIONS:<br />

Holiday extension specialist!<br />

Favourite gemstone:<br />

Tanzanite, because I like the<br />

blue/purple colour and the<br />

way diamonds can make it<br />

really pop.<br />

Favourite metal:<br />

Anything other than silver<br />

and 9-carat gold!<br />

Favourite tool:<br />

My hammer. It was<br />

my grandfather’s so it<br />

is sentimental.<br />

Best part of job:<br />

Starting with a square bar<br />

of metal and then turning it<br />

into someone’s dream piece<br />

of jewellery.<br />

Worst part of job:<br />

When people lick their<br />

finger to take off a ring and<br />

then expect you to hold out<br />

your hand to receive it with<br />

a smile on your face.<br />

Also, nose studs!<br />

Best tip from a jeweller:<br />

There is no such thing<br />

as ‘can’t’, so my father said.<br />

Best tip to a jeweller:<br />

Don’t fall in love with your<br />

bench or your peg!<br />

Love jewellery because:<br />

How many people can say<br />

their job is like a hobby?<br />

My bench is always:<br />

Immaculately organised,<br />

because it makes it easier to<br />

find stones when they flick.<br />

Favourite sporting teams:<br />

Claremont Football Club<br />

and West Coast Eagles.


SOAPBOX<br />

MARGIN CALL<br />

I’ve been in the retail industry my entire<br />

working life, both as a retailer and most<br />

recently as a supplier, and I’ve never seen<br />

the market as difficult as it is right now.<br />

It’s like being on a boat and you know the<br />

storm is coming but you really don’t have<br />

any idea how bad it is going to be.<br />

There’s no way that retailers are getting as<br />

much foot traffic as they were three or four<br />

years ago; customers are now fewer and<br />

farther between.<br />

If jewellers are to have any hope of surviving<br />

this challenging period then they need help<br />

from suppliers. Specifically, suppliers must<br />

take responsibility and provide them with<br />

increased margins.<br />

Not naming names, I think it’s imperative<br />

that the big brands look at adjusting margins<br />

in order to maximise the value of each<br />

customer that walks through the retailer’s<br />

door. Being able to maximise this customer<br />

value does not come by giving people a new<br />

product or a gift with purchase promotion.<br />

These strategies don’t work anymore<br />

because the branded product marketing<br />

that’s currently out there is heavily geared<br />

towards the online environment.<br />

Why is this the case?<br />

Well, the big brands set most of the<br />

margins online, meaning there’s little<br />

need to conduct marketing for bricks-andmortar<br />

retail.<br />

My business gives a significant mark-up for<br />

the retailer and there’s a reason we do it – it’s<br />

because I know what is required to survive<br />

in a retail environment. I’ve been there,<br />

we’ve done the retail side of it and I know it’s<br />

ridiculously hard to survive without money.<br />

If I were still in retail and wanted to ride<br />

this difficult wave then I’d need a massive<br />

margin on the products in my store, I’d need<br />

foot traffic and I’d need to get these two<br />

components to glue together.<br />

Money is the one thing that will keep<br />

retailers alive – nobody pays bills with extra<br />

product, free gifts or rebates. Only money<br />

will pay wages and rent. It’s as simple as that.<br />

Some suppliers boast about offering rebates.<br />

For example, if a retailer spends more<br />

than $5,000 then the supplier will give a<br />

percentage rebate or a favourable payment<br />

option. Well, that’s great but that also<br />

requires a retailer to spend more money.<br />

This is like saying to someone that’s<br />

drowning in the ocean, “Listen, I know you’re<br />

drowning but can you just hold this for me<br />

for a minute? I am going to rescue you later,<br />

down the track, but I need you to hold this<br />

for me now.”<br />

That’s too late – there’s no surviving that<br />

situation; the retailer has drowned.<br />

There’s also much complaining going on<br />

from suppliers about retailers not running<br />

their businesses properly, damaging the<br />

brands in store, blah, blah, blah. Are you<br />

kidding me? They’re trying to save their<br />

businesses! Retailers are the ones who<br />

are struggling to pay rents, struggling to<br />

negotiate with Westfield and other landlords<br />

who all want to get paid.<br />

Suppliers have one job on top of providing<br />

product: they must offer outstanding<br />

CAN WE PLEASE<br />

ALL BE HUMAN FOR<br />

FIVE MINUTES? CAN<br />

WE ALL RECOGNISE<br />

THAT WE HAVE A<br />

BETTER CHANCE<br />

OF SURVIVING THIS<br />

RETAIL WAR IF WE<br />

ALL JOIN HANDS?<br />

customer service in order to solve every<br />

problem their retail customers have.<br />

I think some suppliers believe that it’s not<br />

their job to do that or that retailers should<br />

feel lucky to stock their brands but this is<br />

just ridiculous.<br />

The big brands need to take it on the chin<br />

for a bit and must cut their margins if retailers<br />

are to survive. Suppliers are already making<br />

massive margins online so it’s not as though<br />

cutting margins for the retailer’s benefit<br />

would jeopardise their businesses. Anyone<br />

who claims this is talking rubbish.<br />

Many suppliers have been manufacturing<br />

for a long time so what’s stopping them<br />

from going back to their manufacturers and<br />

asking for better prices? They need to do<br />

whatever they can before it’s too late.<br />

Can we please all be human for five minutes?<br />

Can we all recognise that we have a better<br />

chance of surviving this retail war if we all<br />

join hands?<br />

Retailers don’t need to be told how to sell<br />

jewellery; they know how to sell jewellery.<br />

They need to be given larger margins –<br />

even just for the short term – to enjoy a bit<br />

of a breather.<br />

Importantly, it needs to be done now<br />

otherwise there will be no retailers left to<br />

sell to for suppliers! i<br />

Name: Hayley Birtles-Eades<br />

Business: Love Lockets<br />

Position: marketing and brand manager<br />

Location: Brisbane<br />

Years in the industry: five<br />

50 <strong>Jeweller</strong> <strong>December</strong> <strong>2017</strong>


SIGNITY (THAILAND) LTD.<br />

SWAROVSKI GEMSTONES BUSINESS<br />

SIGNITYTHAILAND.OFFICE@SWAROVSKI.COM<br />

T +66(02) 237 2040<br />

F +66(02) 237 2041<br />

SWAROVSKI-GEMSTONES.COM<br />

KARLIE KLOSS<br />

Brilliant Precision<br />

BORN FROM A TRADITION OF<br />

MASTER CRAFTSMANSHIP<br />

VISIT SWAROVSKI-GEMSTONES.COM


MERRY CHRISTMAS<br />

FROM ALL OF US<br />

pms 2935 C<br />

pms 2935 C<br />

August 25 > 27, 2018<br />

International Convention Centre Sydney, Darling Harbour<br />

Contact: Mary-Anne Brown<br />

Telephone: +61 2 9452 7513<br />

Email: maryanne.brown@expertiseevents.com.au<br />

Organised by

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