Jeweller - December 2020

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STATE OF THE INDUSTRY Buying Groups Report STRENGTH in NUMBERS Following a year of unprecedented upheaval, Jeweller revisited the four jewellery industry buying groups profiled in our March report to explore how they have adapted and supported members throughout COVID-19. It feels as if it’s every second day that we read about another retailer closing its doors. Economic and financial causes aren’t the only issues at play; Australia has also had to contend with drought, floods, fires and now the coronavirus, all of which have taken their toll on the already fragile retail industry. In March, Colin Pocklington, managing director Nationwide Jewellers – Australia and New Zealand’s largest buying group – told Jeweller, “The conservative spending of consumers continues to adversely affect the industry. Until we see real growth in incomes and an easing in cost of living, we are unlikely to see growth of sales.” Yet in the wake of the pandemic, he struck a more optimistic tone: “Obviously the last few months have been stressful for everyone – particularly our Melbourne and Victorian members and suppliers. That said, trading is very buoyant at the moment. Consumers appear to be confident, with the virus now under control. “An increasing demand for custom design continues to grow, with Australians who would normally be overseas now spending their money domestically,” he explained. That insight was echoed by Carson Webb, general manager Showcase Jewellers, who said, “Consumers have very limited travel plans and are more confident to remain local, support local businesses, and enjoy the simple things around the again. This is also true for our New Zealand members – and this is true for many retail businesses, not just jewellery.” He added, “I’d even go as far as to say this has seen the resurgence of the independent jeweller, and many would be booked out for weeks with makes and repairs.” At Australia’s newest jewellery buying group, Independent Jewellers Collective (IJC) – which launched in the first three months of the year – the pandemic had an unexpectedly unifying effect, according to CEO Josh Zarb. “The uncertainty in the early days of COVID-19 was just as hard for us a anyone, and it took hold just as we were launching IJC. What it did do, which inadvertently worked in our favour, was to pull a group of retailers together very quickly. “[Our members] formed a very tight bond from the onset, which gave us a great sense of community.” Zarb also noted an uptick in sales for members, saying, “The most pleasing thing to note throughout the last six months was just how strong regional retail trade has been and almost all of our members’ stores have been trading very strongly.” By July, IJC had surpassed its initial member target of 40 BY THE NUMBERS Buying Group Insights Buying groups offer retail jewellers a myriad of benefits, beyond supplier discounts. Group members access marketing and business strategies and support, sophisticated ordering platforms, access to exclusive products, and much more. 569 Australian jewellery retailers are buying group members 102 jewellery stores in New Zealand are part of a buying group 85.7% of buying group members are in Australia retailers and that number has held steady for the past five months. As of 1 December, IJC had 43 members operating 52 stores. Showcase Jewellers recorded a net increase of one new member, to 139 and 212 stores in Australia and 19 stores and 19 members in New Zealand, while Nationwide’s membership remained relatively stable, decreasing from 322 to 317 members, and 364 stores. Support and advice During the pandemic, Showcase Jewellers found that its existing e-commerce infrastructure paid off for members. “To be very honest, our previous strategies of our fine jewellery focus and investing in many of our digital customised platforms has proven to be exactly what we needed to support our members,” Webb explained. Communication was also a key priority: “Using our active internal communication platform has meant we’ve been able to keep membership up to date and on top of what needs to be done.” “The uncertainty in the early days of COVID-19 was just as hard for us a anyone, and it took hold just as we were launching IJC. What it did do, which inadvertently worked in our favour, was to pull a group of retailers together very quickly.” JOSH ZARB Independent Jewellers Collective At IJC, Zarb said members had embraced “the Zoom phenomenon” as interstate travel was largely prevented. “We started hosting regular IJC group Zoom meetings with all our partners [retailers] every two weeks from April and then every three weeks from June,” he told Jeweller. “During this time, we were able to share ideas and provide some leadership and updates on many issues that the industry was facing. “This has become a very effective group communication platform for us, as we invite guests to each meeting and we can record these sessions easily for everyone to refer to at a later date. These will continue into our business model moving forward,” Zarb added. At Nationwide, the focus was also on providing robust digital offering, including new platforms to replace those 52 | December 2020
COV ID-19 INSIGHT Lessons Learned Showcase Jewellers physical events which were cancelled due to international travel restrictions. “With the cancellation of the 2020 International Jewellery & Watch Fair [which was scheduled to take place in October], we brought forward the launch of our new eWarehouse in conjunction with our Virtual Pre-Christmas Expo week,” Pocklington says. “Our Expo week was a huge success for both members and suppliers, with orders placed far in excess of the 2019 fair.” Nationwide’s annual Antwerp diamondbuying trip was also shifted online to ensure members were still able to source and sell Antwerp stones in 2020. The ‘virtual buying trip’ ran from July to September and connected jewellers with diamantaires through videoconferencing, as well as providing marketing materials to promote the stones and encourage pre-orders. More broadly, the group also launched its Global Diamond Vault, which gives members access to certified diamonds from both local and overseas suppliers. In terms of communication and education, Pocklington noted that daily webinars on industry-related topics – including forecasts and marketing strategies – as well as tutorials. Proactive and positive While the buying groups acknowledged the difficulties of COVID-19, a sense of comparative optimism and positivity shone through. IJC’s Zarb noted, “The impact of coronavirus on our group has been significant, but we have been extremely fortunate that we were not as negatively impacted by this as others may have been.” At Showcase, Webb said, “Thankfully, as a group, we went into the pandemic period in very good financial shape with a brilliant six months of trade in the second half of 2019. “This provided us with excellent leverage to support all our membership throughout the period – especially those in Melbourne.” Colin Pocklington Nationwide Jewellers “The last few months have been stressful for everyone – particularly our Melbourne and Victorian members and suppliers. That said, trading is very buoyant at the moment. Consumers appear to be confident.” Carson Webb Showcase Jewellers “Our previous strategies of our fine jewellery focus and investing in many of our digital customised platforms has proven to be exactly what we needed to support our members.” Josh Zarb Independent Jewellers Collective “We started hosting regular IJC group Zoom meetings with all our partners [retailers]... During this time, we were able to share ideas and provide some leadership and updates on many issues that the industry was facing.” TABLE 1: GROUP TOTALS GROUP TOTALS AUSTRALIA As at Dec ‘20 TYPE NATIONWIDE SHOWCASE LEADING EDGE IJC TOTAL MEMBERS 317 139 70 43 569 STORES 364 184 104 52 704 Buying group figures have been adjusted from a previous report in February 2020. Members and store counts have increased overall due to Independent Jewellers Collective’s 43 members and 52 stores. GROUP TOTALS NEW ZEALAND As at Dec ‘20 TYPE NATIONWIDE SHOWCASE LEADING EDGE IJC TOTAL MEMBERS 73 19 1 0 93 STORES 80 19 3 0 102 The New Zealand market has remained relatively stable, with a decrease of four members since February. GROUP TOTALS INTERNATIONAL TYPE NATIONWIDE FIJI SHOWCASE VANUATU TOTAL MEMBERS 1 1 2 STORES 4 1 5 Members and stores outside of Australia and New Zealand Support during difficult times is perhaps the clearest benefit for retailers of joining a buying group, and this was illustrated as the pandemic raged – forcing independent retailers to modify their strategies and seek external assistance. “From late March to October, we spent considerable time supporting members with: information on how to access the various government benefits; negotiating rent relief with landlords – together with our specialist jewellery store rent consultants we helped over 200 members achieve substantial rent reductions – and finally, implementing various marketing activities to boost sales,” Pocklington said. Indeed even prior to COVID-19, unsustainable tenancy costs topped retailers’ list of concerns – something the buying groups acknowledged at the start of the year. In March, Pocklington said many of his members were already “seeking rent reductions to bring their occupancy costs 811 STORES TOTAL NUMBER 664 MEMBERS back in-line with industry benchmarks” while Webb noted that the disconnect between store revenue and retail tenancy costs had only widened over time. “When a jeweller signed a $75,000 lease, say, five years ago, that lease has now risen to around $91,000. Have the jeweller’s sales increased proportionally over that period?” “The statistics will tell you that they haven’t. And what about the legislated wage increases that they have no control over?” Webb asked in March. Declining foot traffic in shopping centres was also an escalating problem for discretionary retailers like jewellers – and that trend was accelerated by the pandemic. Charlie Davey, general manager of members and category management at Leading Edge Group Jewellers, told Jeweller in March that high tenancy costs had forced many anchor tenants to December 2020 | 53
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Page 32 and 33: CELEBRATING Local Talent LUCAS BLAC
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Page 36 and 37: BACKGROUND STATE OF THE INDUSTRY RE
Page 38 and 39: STATE OF THE INDUSTRY | Chains thro
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Page 58 and 59: BUSINESS Strategy Survival lessons
Page 60 and 61: BUSINESS Selling Six simple and eff
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Jeweller - December 2020

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