Jeweller - December 2020

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STATE OF THE INDUSTRY | Buying Groups Report QUICK NUMBERS Members’ Whereabouts leave centres, leading to a decrease in foot traffic. As noted in Jeweller’s feature ‘Seeing Eye to Eye: The Retail Rent Review’, overall retail precinct footfall declined 8.1 per cent between 2017 and 2020, while shopping centre vacancy rates reached a 20-year peak in June this year. Pocklington pointed to the number of store closures to illustrate the seriousness of the situation. “More than 300 Australian jewellery stores – representing 10 per cent of all retailers – have closed in the last four years, with the main factor being falling sales. “Without doubt, the biggest challenge has been the significant drop in jewellery industry sales over the last three to four years.” “From late March to October, we spent considerable time supporting members 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 implementing various marketing activities to boost sales” COLIN POCKLINGTON Nationwide Jewellers COVID-19 accelerated another key trend in the retail sector, which is the shift to e-commerce. According to figures from Australia Post, 12 per cent of Australian retail sales took place online in March 2020 – a new record high. “Over the past two years, I think the changing face of our consumers and their purchasing habits is something that remains challenging for many independent jewellers,” Zarb told Jeweller in March. Davey agreed: “Bricks-and-mortar retailers are suffering due to the online shopping experience. With each store closure in regional Australia comes a loss of brands and items someone once purchased. “This drives consumers online to replenish those items – encouraging online shopping in people who have traditionally shopped locally.” Lingering challenges The variety of support on offer from buying groups places independent jewellers in a strong position for the future, but the same challenges that existed pre-COVID are likely to continue – both within the jewellery category and across the retail sector. At the same time, the Australian economy is not expected to fully recover from the deep shocks of the COVID-19 for more than a year. Analysts at PriceWaterhouseCoopers (PWC) estimate overall Australian household consumption fell 8–11 per cent in 2020 and predict a recovery to “pre-COVID-19 levels towards the beginning of 2022”, with the greatest impact felt in discretionary retail categories – which includes jewellery. 33% of buying group members are in New South Wales 3% of buying group member stores are in Tasmania 12.5% of buying group members’ stores are in New Zealand 165 stores in Victoria are part of a buying group 117 buying group members are in Queensland A recent report by management consultancy McKinsey, Australia’s next normal: The cautious consumer – published in August – found that “spending cutbacks and frugal, recession-like behaviour are showing up in our data across all segments and categories, with the exception of groceries” and that temporary relief measures were “masking” consumption patterns. The PWC report Where Next For Retail and Consumer? notes that while the JobKeeper program, loan and mortgage deferrals, and other government stimulus cushioned the initial blow of COVID-19, consumer spending is expected to drop and then remain stagnant in the mid-term. “The Australian retail sector was already struggling before COVID-19. 2020 saw the collapse of some iconic Australian retailers. The expected drop in consumer spending, especially in discretionary categories, will put further pressure on the sector,” the report’s authors noted. Pocklington succinctly described the trading reality in March, telling Jeweller, “We recognised the start of these difficult trading conditions back in mid-2016 and started developing strategies, training and marketing initiatives to assist members in maintaining profitability in a declining market.” Zarb explained that there is no simple answer to solve the challenges retailers currently face. “Unfortunately, there is no one ‘magic bullet’ that will be the single solution to thrive in today’s retail climate,” he says. However, that doesn’t mean there is nothing retailers can do to improve:“If I had to get specific, I would suggest that retailers really focus on identifying who their customer is and start to ensure their marketing targets them. “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.” CARSON WEBB Showcase Jewellers “I would recommend that, if they are struggling, they reach out for assistance. All the groups offer numerous support services to assist their members.” In the new digital world, where consumers are spoilt for choice, Pocklington also advised retailers to undertake more marketing activity each month, across more channels and platforms. They should also look to offer different merchandise with different price points than their competitors, especially chain stores. He advises Nationwide members that better inventory management can also substantially improve profitability. Webb had similar advice at the start of the year, which is even more pertinent in the ‘COVID normal’ reality: “First, work your stock levels smarter. Customers are wanting ‘the same, but different’. Adjust now, or you’ll drown in stock. The average store is sitting at 38 per cent of stock value over two years old. “Secondly, a really pertinent question to ask is, ‘Why me?’ Why should 54 | December 2020
Buying Groups Report | STATE OF THE INDUSTRY SAMS GROUP AUSTRALIA TABLE 2: AUSTRALIAN TOTALS The following tables include the most recent available membership and store count data, provided by the four buying groups exclusively to Jeweller. While three buying groups experienced declines in membership over the course of 2020 – largely attributed to COVID-19 and expected retirements – new buying group Independent Jewellers Collective notably surpassed its launch target of 40 member stores. NATIONWIDE AUSTRALIA As at Dec ‘20 COMPARISON NSW VIC QLD WA SA TAS ACT NT TOTAL 2020 - MEMBERS 113 66 65 25 28 10 7 3 317 2018 - MEMBERS 108 77 67 30 33 10 8 2 335 Variance 5 -11 -2 -5 -5 0 -1 1 -18 2020 - STORES 129 81 75 26 30 11 9 3 364 2018 - STORES 127 94 82 32 34 10 12 2 393 Variance 2 -13 -7 -6 -4 1 -3 1 -29 Excludes 73 members and 80 stores in NZ and 1 member with 4 stores in Fiji THINK PINK! Access one of the largest ranges of Argyle pink diamond in Australia All of our pink diamonds are cut & polished by Argyle With Argyle TENDER STONES SINGLE STONES SHOWCASE AUSTRALIA As at Dec ‘20 COMPARISON NSW VIC QLD WA SA TAS ACT NT TOTAL 2020 - MEMBERS 53 32 37 5 4 7 0 1 139 2018 - MEMBERS 61 30 40 7 5 8 0 1 152 Variance -8 2 -3 -2 -1 -1 0 0 -13 2020 - STORES 65 42 57 7 4 8 0 1 184 2018 - STORES 76 47 63 10 5 10 0 1 212 Variance -11 -5 -6 -3 -1 -2 0 0 -28 Excludes 19 members and 19 stores in NZ and 1 member with 1 store in Vanuatu MATCHED PAIRS LEADING EDGE AUSTRALIA As at Dec ‘20 COMPARISON NSW VIC QLD WA SA TAS ACT NT TOTAL 2020 - MEMBERS 33 12 8 3 8 2 1 3 70 2018 - MEMBERS 54 23 26 9 17 3 1 2 135 Variance -21 -11 -18 -6 -9 -1 0 1 -65 2020 - STORES 33 37 12 5 11 2 1 3 104 2018 - STORES 70 52 29 10 19 3 2 10 195 Variance -37 -15 -17 -5 -8 -1 -1 -7 -91 Excludes 1 member and 3 stores in NZ CALIBRATED MELEE LINES IJC AUSTRALIA As at Dec ‘20 COMPARISON NSW VIC QLD WA SA TAS ACT NT TOTAL 2020 - MEMBERS 19 5 7 5 7 0 0 0 43 2020 - STORES 24 5 10 5 8 0 0 0 52 Started buying group early 2020 E pink@samsgroup.com.au W samsgroup.com.au P 02 9290 2199
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VOICE OF THE AUSTRALIAN JEWELLERY I
Page 6 and 7: Australian Argyle pink diamonds are
Page 8 and 9: Baumatic self-winding calibre, 40mm
Page 11 and 12: DECEMBER 2020 Contents This Month I
Page 13: Editor’s Desk Listening to the he
Page 17 and 18: Proudly distributed by 02 9417 0177
Page 19 and 20: Ethical Colombian Emeralds direct f
Page 21 and 22: Louis Vuitton purchases a second la
Page 23 and 24: Pandora launches holiday marketing
Page 25 and 26: For your free copy of the Peter W B
Page 27 and 28: INSIDE Now & Then Fairfax & Roberts
Page 30 and 31: Completing my Diploma in Gemmology
Page 32 and 33: CELEBRATING Local Talent LUCAS BLAC
Page 34 and 35: Proudly distributed by (02) 9417 01
Page 36 and 37: BACKGROUND STATE OF THE INDUSTRY RE
Page 38 and 39: STATE OF THE INDUSTRY | Chains thro
Page 46 and 47: STATE OF THE INDUSTRY Brand-Only St
Page 48 and 49: L to R: Rolex; Omega IN SUMM A RY C
Page 50 and 51: Swarovski is also interesting. Of t
Page 52 and 53: STATE OF THE INDUSTRY Buying Groups
Page 56 and 57: STATE OF THE INDUSTRY | Buying Grou
Page 58 and 59: BUSINESS Strategy Survival lessons
Page 60 and 61: BUSINESS Selling Six simple and eff
Page 62 and 63: BUSINESS Marketing & PR How to eval
Page 64 and 65: My Bench Leon Raper Australian Diam
Page 66 and 67: OPINION Soapbox There are many e-co
Page 68: Australian Argyle pink diamonds are
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Jeweller - December 2020

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